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Different Strategies for Protecting Cross-Border Costs
Companies take different approaches when modeling cross-border location decisions.
How can companies build in a buffer to account for the other factors you mention (inflation, currency exchange rates, etc.)?
 

Matt Jackson, Strategic Consulting, Jones Lang LaSalle
When projecting the costs in a location, decisions need to be made concerning how to model exchange rates (spot rate with hedging versus forward projection), and inflation (increases in cost for labor, utilities, transportation, and other spending). We have observed that companies take different approaches to account for such items when modeling the financial impact of a new investment. While each approach has its strengths and weaknesses, applying any approach is generally acceptable when performed in concert with sensitivity analysis modeling. Countries with an exchange rate pegged to the U.S. dollar have more predictable results over time compared to countries with floating currencies.
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About the Author

Matt Jackson, Strategic Consulting, Jones Lang LaSalle
Matt Jackson has 15 years experience assisting corporations with the global configuration and optimization of corporate operations to achieve revenue, margin, and innovation objectives. He has conducted projects in more than 25 countries around the world.

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