In what production process are materials and intermediate parts sensitive to the real exchange due to the fluctuations currency values?

Question

Quizplus · Accepted Answer

Materials and intermediate parts are typically sourced from different countries, which means that their prices are often denominated in foreign currencies. Fluctuations in currency values can lead to significant differences in the cost of these inputs, which can affect the profitability of the production process. As a result, input sourcing decisions are frequently sensitive to exchange rate movements.

In What Production Process Are Materials and Intermediate Parts Sensitive