drawbacks to this method. In addition, brokers’ and agents’ fees, increased costs associated with physical distribution (the extra logistics involved can add as much as 10 to 15 per cent to the per unit cost of the product and the need for additional inventory buffers can add an additional 5 to 10 per cent to the per unit cost), paper work concerns and cash flow issues (i.e. letter of credit costs and cost of capital) are considerations for the procurement manager. Also, two other risks can wipe out any profit that might result in dealing in this international environment: exchange rate fluctuations and political risks inherent with the foreign supplier.