Subject category:
Production and Operations Management
Published by:
Ivey Publishing
Version: 2002-03-26
Length: 14 pages
Data source: Field research
Abstract
After a substantial devaluation in the value of the Mexican currency, a major automaker attempts to reduce the price it is paying to a Mexican based supplier. The supplier (Ventramex) is put in a difficult position because a large portion of its costs is based in US dollars. The company must decide how to respond to the automaker while considering options that would increase the proportion of its costs that are based in Mexican pesos.
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Abstract
After a substantial devaluation in the value of the Mexican currency, a major automaker attempts to reduce the price it is paying to a Mexican based supplier. The supplier (Ventramex) is put in a difficult position because a large portion of its costs is based in US dollars. The company must decide how to respond to the automaker while considering options that would increase the proportion of its costs that are based in Mexican pesos.