Which of the following is a valid example of costs associated with global sourcing decisions?
A) To reduce the effects of currency fluctuations retailers avoid the use of finan?cial instruments such as options and futures contracts.
B) For American retailers in the U.S.A., inventory turnover is likely to be higher when purchasing from suppliers outside the United States than from domestic suppliers.
C) The legal-political system in foreign countries should never impact the human resource management practices that retailers can use in those countries.
D) If, for example, the Indian rupee increases relative to the Canadian dollar, the cost of private-label merchan?dise produced in India and imported for sale into Canada will decrease.
E) If, for example, the Indian rupee decreases relative to the Canadian dollar, the cost of private-label merchan?dise produced in India and imported for sale into Canada will decrease.

Question

Quizplus · Accepted Answer

This statement accurately describes a cost associated with global sourcing decisions. When a foreign currency decreases in value relative to the domestic currency, the cost of importing goods from that country will decrease. This can be beneficial in terms of cost savings, but also carries the risk of currency fluctuations impacting profitability. Options A, B, and C do not accurately describe costs associated with global sourcing decisions. Option D is incorrect because if the Indian rupee increases relative to the Canadian dollar, the cost of importing private-label merchandise from India will increase, not decrease as stated in the option.

Which of the Following Is a Valid Example of Costs