In March of 2010, while working for a British aircraft parts manufacturer in the finance department, you were directed by your global procurement director to construct the most financially secure-least possible variation-purchase of 50 metric tonnes (MT) of titanium scrap. Both the Russian and Chinese sources had the same price of £5.60/Kg and the freight costs have been equalised. Answer the following questions:
List the specific financial risks you can identify for each supplier. Are they different or the same?
Of each list, identify the ones that concern you most or have the greatest potential for financial disruption. Support your answer as quantitatively as you can.
Is currency fluctuation on either or both of your lists? If so, would your protection strategies be the same or different? Explain how you would protect against currency variation.