Case analysis Essay Example | Topics and Well Written Essays - 500 words - 8

Case analysis - Essay Example Since the company used to deal with more than one currency, then the exchange rate proved to be a challenge. Foreign currency rates are never constant; they fluctuate on a daily basis due to the interaction of a variety of elements that are beyond the scope of this case analysis. Delays in ordering and payment together with exchange rate fluctuations pose a significant risk for a company like Alliance that deals with more than one currency. Although it is uncertain, it could be argued that with exchange rate could fluctuate in either direction thus providing some room for profitability. The other problem that Alliance faced was the fact that they have been in operation for only three years. Some of the company is administrative and supply chain processes, such as those for equipment procurement and generation of price quotations require improvement and formalization. This can be attributed to the fact that they have only been in operation for quite a short period (Aleshaiway, 2005). The customer can participate by modifying the price quotation process in a bid to mitigate the foreign exchange risk. This policy can be implemented through a number of various ways including, changing the acceptance period (30 days) and changing the required amount of deposits to be made. A stipulation is saying that the final charges would be based on the exchange rate at the time of project completion should be included in the original contract. To add to the above strategy, a review of the internal processes related to cash management (including collection from customers and payment of suppliers), price quotations, and equipment procurement. Although there are aspects of the overall process that are dependent on schedules and operations of others such us completion of projects, there are small issues within that process that could bring about risk mitigation of exchange rates. The company