Question: why do i agree with this response Tariffs, Currency Risk, and Operational Flexibility International operations must contend with both political and economic risks. Tariffs can
why do i agree with this response Tariffs, Currency Risk, and Operational Flexibility International operations must contend with both political and economic risks. Tariffs can increase the cost of cross-border trade, prompting companies to establish facilities within key markets to reduce exposure. Currency fluctuations also influence supply chain decisions, particularly when exchange rate shifts affect the cost of raw materials or labor. Firms with geographically distributed production capabilities can move sourcing or manufacturing to regions with favorable economic conditions. These practices enhance financial agility and reduce the impact of unforeseen policy or market changes. Flexibility in global supply chain design is a strategic asset that mitigates risk while creating opportunities for cost savings and efficiency. In addition, companies often engage in operational hedging strategies such as dual sourcing, nearshoring, and dynamic supplier switching to further insulate against financial volatility. Trade agreements, geopolitical stability, and local regulatory environments are also carefully evaluated to ensure compliance and long-term viability. Some firms leverage joint ventures or strategic partnerships in foreign markets to gain local expertise while sharing risk. Furthermore, digital tools such as blockchain, supply chain visibility platforms, and real-time exchange rate tracking empower companies to monitor and adapt to global economic shifts with gre
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
