Alliance Design Concepts: Foreign Exchange Risk Harvard Case Solution & Analysis

Alliance Design Concepts has been providing high-quality sound systems through the installation in customer facilities like churches, schools, etc. The major cost in this audio system solution was the prices of the equipments, including amplifiers and speakers which was accounted for 60 to 80 percent of the cost. The company purchased these equipments from the U.S market in the U.S dollars (USD) but while quoting the price to customers, it first converts it into the Canadian dollars (CAD) which based on the exchange rate of the day of quotation. The company often paid its supplier after a few months by converting cash in USD and most of the time it found the change in the exchange rate which caused the significant decline in their revenues. It requires the operation managers to determine a strategy that could mitigate this risk and needed to revise the business process.

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Alliance Design Concepts: Foreign Exchange Risk

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