Foreign Exchange


An international marketer needs to transact financial transfers across nation lines in order to close deals. The financial transfers from one country to another are made through the medium of foreign exchange.

Foreign exchange is the monetary mechanism by which transactions involving two or more currencies take place. Transacting foreign exchange deals presents two problems. First, each country has its own methods and procedures for effecting foreign exchanges—usually developed by its central bank. The transactions themselves take place through the banking system. Thus, both the methods and procedures of the central bank and commercial banking constraints must be thoroughly understood and followed to compete a foreign exchange transaction.

The second problem involves the fluctuation of  the rates of exchange. Fluctuations in exchange rates are based on the supply and demand of different currencies. The rate of exchange between two countries can fluctuate from day to day. This produces a great deal of uncertainty since a business person cannot know the exact value of foreign obligations and claims.

To appreciate fully the complexities of foreign exchange, a few terms must be understood. Their understanding also will provide a historical perspective on the making of payments across national boundaries. The terms are gold standard, gold exchange standard, gold bullion standard, inconvertible currencies, and hard and soft currencies.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Managing Cash and Near Cash


Cash and near cash (interest-bearing assets easily converted to cash) are needed to conduct day-to-day business operations like paying employees and meeting emergencies. How much of these assets managers need depends on how well they have done their financial planning, how many other current assets the firm holds, and the range of normal business fluctuations.

Cash itself pays no interest. So the financial manager must be careful to (1) speed up collection of monies due; (2) conserve funds; and (3) place idle cash in interest-bearing assets (near cash) until it is needed.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Key Objectives of Logestics Strategy


  1. To optimize customer Service

The logistics system will provide products and information to customers in a way that equals or exceeds the stated requirements of each individual customer.

  1. To minimize the cost of supply chain operations

The logistics system will be structured and operated with a view to minimizing:

  • The fixed assets employed in supply chain activities;
  • The operating costs of the chain;
  • The inventory held within the chain.

Cost minimization will, however, be set within the context of achieving specified customer service targets.

  1. To maximize the flexibility of supply chain

The logistics system will be designed to permit Tallent Engineering to respond with maximum flexibility to:

  • Customers’ short-term operational fluctuations in demand;
  • Longer-term strategic changes in demand either from existing customers (e.g. new models) or the wider market place (e.g., new customers/new product groups).

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Good Management


Good planning and good management are probably the best protection against most of the other risks. Price fluctuations of any normal retail inventory may be upward or downward. Good management will keep itself informed of price trends. Study of population trends and business activity will warn merchants early if their location is losing its value. Good accounting records and study of operations against a budget will warn of any developing adverse trends.

 To handle the risks of dishonest employees, good management will provide devices such as internal security guards and signal systems for detecting pilferers. A reputation for prosecuting pilferers and training all employees to be alert to the problem will help to reduce pilferage. Tags in merchandise which act of alarms at the entrance unless removed by the sales person are now common. These methods are often expensive but necessary. Personnel policies will provide means of checking employees whose honesty is questioned. Inspection of employees of checkout time is being used by manufacturing firms, some airlines, and other type of firms. It is recommended for wholsalers and retailers when losses in this area are deemed a high risk. Fidelty bonds may be purchased to protect the firm from losses by dishonest employees.

 The risk of financial hardship can best be coped with by proper financial planning and financial management. This common risk has caused the downfall of many firms which otherwise had a most profitable future. Over and above good planning along the lines, watching the key financial ratios in the financial statements, the cash adequacy rule, and investment in receivables, and having a cash flow statement are devices to protect against this risk. Having a good performance record for honesty and fair dealing will help the business secure financial help when it is needed.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Customer Attrition and Retention


Attrition is the key indicator in measuring the success of any retention and customer service strategy. It is a monthly performance indicator that should be acted upon sooner rather than later.

Relationship attrition is the number of customers who do not renew their relationship in any one-month, expressed as a percentage of the number of customers at the start of the month.

Each organization will have its own means of measurement that relates to its management systems, but as long as this is consistent, it is only the fluctuations that are relevant.

The measure of relationship retention is an important indicator of how effective your organization is in meeting the desires of your customers. In sone instances, the rate at which people stop attending on a regular basis or fail to renew their relationship can be very high.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight