Hedging Exchange Rate Risks

Risks associated with fluctuating exchange rates affect investment cost and investor profitability. Approximately 50% of firms in emerging markets have significant exposure to fluctuating exchange rates. Grounded in principal-agent theory (PAT), the purpose of this case study was to explore hedging strategies to mitigate risks of fluctuating exchange rates. The population comprised a census sampling of 12 bank hedgers (risk managers and controllers) in Dar es Salaam in Tanzania, East Africa. Data collection involved semistructured interviews, casual observations of the work environment, and analysis of reports including risk management, internal control, and compliance policies. Data were analyzed by coding and grouping narrative segments and significant statements into themes of participants\u27 experience in hedging exchange rate risks. Method triangulation and member checking were used to increase the trustworthiness of interpretations. Four themes emerged directly related to the PAT conceptual framework: training and skills development, management of hedging strategies and contracts, corporate governance, and benefits to management and the organization through effective compensation programs. A focus on training and skill development helped develop appropriate exchange rate hedging strategies and corporate governance improved compliance with laws, regulations, and policies. The benefits of effective hedging strategies include a reduction in cost and increase in profitability. The findings may help improve the soundness of professional hedging practices, which will increase the stability of the Tanzanian banking system

Strategi Pengadaan Dan Analisis Risiko Suplai Batubara Dengan Mempertimbangkan Fluktuasi Harga Dan Waktu Pengiriman Pemasok

Pemilihan strategi pengadaan yang tepat menyesuaikan dengan karakteristik komoditas dan kebutuhan perusahaan tentunya akan sangat membantu sebuah organisasi/perusahaan dalam menjalankan salah satu fungsi dalam supply chain dengan baik. Kesalahan perencanaan dalam penentuan strategi pengadaan dapat memberikan dampak pada efisiensi dan efektifitas proses pengadaan dalam hal waktu dan biaya serta dapat mengindarkan perusahaan dari risiko-risiko tinggi dalam proses pengadaan itu sendiri. Penelitian ini akan membahas tentang pemilihan 3 (tiga) strategi pengadaan yakni strategi pengadaan jangka panjang, strategi pengadaan jangka pendek, serta strategi campuran keduanya dengan mempertimbangkan faktor ketidakpastian berupa harga komoditas, waktu pengiriman pemasok dan kualitas yang mana ketiga faktor tersebut bersifat fluktuatif. Beberapa penelitian sebelumnya telah mempelajari strategi pengadaan dengan mempertimbangkan ketidakpastian harga dan jumlah permintaan. Penelitian ini mempertimbangkan fluktiasi variabel harga, waktu pengiriman pemasok, dan kualitas. Dalam penelitian ini, dilakukan perbandingan antara manfaat, biaya, dan risiko yang terkait dari masing – masing strategi. Penggunaan metode Simulasi Monte Carlo diharapkan dapat mewakili tingkat ketidakpastian dari ketiga variabel tersebut. Cost-Benefit Analysis (CBA) digunakan untuk menghitung aspek ekonomi dalam penentuan Net Present Value (NPV) terbaik dan analisis risiko suplai pengadaan menggunakan Risk Matrix Chart untuk menentukan strategi dengan risiko terkecil. Berdasarkan perhitungan Simulasi Monte Carlo diperoleh nilai rata – rata untuk masing – masing variabel penelitian sebagai input dalam perhitungan analisis biaya dan manfaat. Dari perhitungan Cost-Benefit Analysis (CBA) diperoleh strategi pengadaan jangka panjang 12 bulan (LT-12) sebagai strategi terbaik dengan nilai Net Present Value (NPV) yang terbesar dengan nilai Rp. 2,021,206.74. Dari perhitungan analisis risiko suplai pengadaan diperoleh strategi pengadaan campuran jangka panjang 24 bulan dan jangka pendek 3 bulan (MT-24/3) sebagai strategi terbaik dengan nilai tingkat risiko (R) yang terkecil dengan nilai 1.15. Secara keseluruhan dengan mempertimbangkan aspek manfaat (benefit) dan biaya (cost) serta analisis risiko suplai pengadaan, strategi pengadaan campuran jangka panjang 24 bulan dan jangka pendek 6 bulan (MT-24/6) adalah strategi terbaik dengan nilai akhir yakni 1.60. ======================================================================================== The selection of appropriate procurement strategy based on the characteristics of commodities and the needs of the company will certainly help an organization / company in running one of the functions in the supply chain. Good planning in the determination of procurement strategies can impact the efficiency and effectiveness of the procurement process in terms of time and cost and also can prevent companies from high risks in the procurement process itself. This research will discuss about the selection of 3 (three) procurement strategy namely long-term procurement strategy, short-term procurement strategy, and mixed strategy both by considering uncertainty factors such as commodity price, supplier delivery time and quality in which the three factors are fluctuative. Several previous studies have discussed the procurement strategy against the demand and price fluctuation / uncertainty. This study will discuss the fluctuations of price variables, supplier delivery time and quality. We compare the benefits, costs and risks associated with each strategy. The benefit/cost analysis and risk analysis will be used to obtain the recommended strategy. The use of Monte Carlo Simulation method is expected to represent the level of uncertainty of all variables. Cost-Benefit Analysis (CBA) is used to calculate the economic aspects of determining the best Net Present Value (NPV) and procurement supply risk analysis using the Risk Matrix Chart to determine the smallest risk strategy. Based on Monte Carlo Simulation calculation, the average value for each research variable as input in calculation of cost and benefit analysis. From the calculation of Cost-Benefit Analysis (CBA) obtained 12-month long-term procurement strategy (LT-12) as the best strategy with the largest Net Present Value (NPV) value is Rp. 2.021,206.74. From the calculation of procurement supply risk analysis, the 24-month long and short-term mixed procurement strategy (MT-24/3) was established as the best strategy with the smallest risk level (R) of 1.15. Taking into consideration the benefit and cost aspects as well as the procurement supply risk analysis, the 24-month and short-term mixed-term procurement strategy (MT-24/6) is the best strategy with a final value of 1.60