Should John consider the foreign exchange rates?

John Browne, a junior buyer for a corporation, is analyzing the global supply market before undertaking negotiations and is wondering whether foreign exchange rates are important to factor into his research.

Should John consider the foreign exchange rates?
A . No, as they only affect the bank’s interest rates for loans
B . Yes, only if the organization can handle foreign currencies in their accounts
C . Yes, as they can affect profit and turnover
D . No, exchange rates only apply to the national economy

View Answer

Answer: C

Explanation:

Foreign exchange rates impact import costs, profit margins, and overall turnover when transactions are conducted in foreign currencies. Understanding these fluctuations allows buyers to anticipate changes in purchasing costs, supporting informed decision-making, as highlighted in CIPS guidance on global procurement considerations.