Dow Chemical has sold SFr 25 million in chemicals to Ciba-Geigy. Payment is due in 180 days.

Spot rate: $0.7957/SFr

180-day forward rate: $0.8095/SFr

180-day U. S. dollar interest rate (annualized): 5%

180-day Swiss franc interest rate (annualized): 2%

180-day call option at $0.80/SFr: 2% premium

180-day put option at $0.80/SFr: 1% premium

a. What is the hedged value of Dow’s receivable using the forward market hedge?

b. Explain how Dow can use the money market hedge?

c. Explain the use of currency options to hedge its receivable?

1. what are the unique operational challenges to delivering fresh meals? 2. why is speed of delivery so important for delivered meals? what variety of options contribute to this performance metric? 3. how could operations management concepts be utilized to improve the performance of freshly? 4. what are your typical product delivery times? what would be required to speed these up? 5. what are your delivery batch quantities? how could you reduce batch size and reduce delivery cost simultaneously using operations management concepts?