Supply Chain Risk Management

Financial Risk • 123

formal review or discussion takes place when a review is triggered. is

bandwidth represents normal risk that the parties are willing to accept.

If, however, the relative currency values move outside the accepted band-

width, a formal currency review is triggered. At that point various actions

might be agreed to by the parties, including currency risk sharing or pos-

sibly even the termination of the contract.

Regardless of the approach used to manage currency risk, it is recom-

mended that supply chain professionals work with their counterparts in

nance before engaging in any activities that take the supply chain profes-

sio ...