Alliance Design Concepts, audio system solutions provider, has been providing the customer high-quality sound systems. A major cost, around 60 to 80 percent, in the installation of this system was the price of equipments, including amplifiers, speakers etc, because these equipments were purchased in U.S dollars (USD) from the United States.
However, the prices of these equipments were converted in Canadian dollars (CAD) by the company for its customers. The quotation of cost based on the exchange rate of the day. This conversion had the direct impact on sale margin, as the company converted its cash in USD to pay its supplier after months later from the date of purchasing. It needed by the operation manager that either to change the business process or to devise a strategy that could reduce this risk. The author, Ryan Orchard, has the affiliation with MacEwan University.
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