CIPS Level 4 Diploma in Procurement and Supply L4M4 Question # 87 Topic 9 Discussion
L4M4 Exam Topic 9 Question 87 Discussion:
Question #: 87
Topic #: 9
Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?
A.
yes- this means the price won't go up or down
B.
yes- this puts the risk on the supplier
C.
no- quoting in the supplier's currency increases the risk for the buyer
D.
no- quoting in the supplier's currency does not affect the risk to the buying organisation
The correct answer is 'no- quoting in the supplier's currency increases the risk for the buyer'. This questions comes up in a variety of formats in the exam. Remember; if the price is in your own currency (most examples in the exam are given in £) there is less risk than if the prices are quoted in a foreign currency. This is because exchange rates fluctuate; if the price is in £ you always know what you're paying, if it's in another currency the price can change daily depending on if the exchange rate compared to £ has gone up or down.
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit