Question

decision point: ordering light bulbs
you have hired an international agent and are ramping up production in your u.s. facility to keep up with the orders the agent has obtained. you receive an email from your purchasing manager.
from: m. gomez
subject: order
we need to place a large order for bulbs for our solar kits. as you know, we import these bulbs from japan. i have been watching the exchange rate between the u.s. dollar and the japanese yen very carefully. the current exchange rate is $1 to 106.94 yen. however, sources tell me that the exchange rate is expected to be $1 to 115 yen very soon. do you want me to place the order now or wait until the exchange rate changes?
please advise how you want me to proceed.
select an option from the choices below and click submit.
wait and place the order when the exchange rate changes.
place the order now.

Explanation:

To determine the best option, we analyze the exchange rate impact. Currently, \$1 = 106.94 yen, and it's expected to become \$1 = 115 yen. If we wait, each dollar will buy more yen, reducing the cost of imported bulbs (since we pay in yen, more yen per dollar means fewer dollars needed for the same yen amount). Waiting to place the order when the exchange rate changes (favors the dollar) is financially beneficial as it lowers the cost of purchasing from Japan.

Answer:

Wait and place the order when the exchange rate changes.