The Impact of a Euro collapse on global supply chains

A Wall Street Journal article (Dec 3, 2011) ponders the currency impact of different Euro collapse scenarios.  It suggests that Greece dropping out will cause the euro to go from its current $ 1.34 to the dollar to parity with the dollar.  But if all countries left the euro, it would drop to 85 cents to the dollar.  Given such drastic possible outcomes, how should firms adjust their production and distribution across their global supply chain ? Given the possible demand impact in Europe, should production be moved back to Europe take advantage of the lower priced euro equivalent ? How should companies hedge their capacity across the world to prepare for these possible outcomes ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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