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The cost of oil is very important in projecting manufacturing, transportation, and production costs of a...

The cost of oil is very important in projecting manufacturing, transportation, and production costs of a company. How would you propose reducing reliance on variable oil prices to improve financial forecasting?

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Answer #1

Lower oil prices helps reduce the cost of living. As fall in oil prices should cause a reduction in transport and fuel cost for a firm. As oil os the most traded commodity and is globally transported cost, it can cause inflation and can lead to higher rate of economic growth. However with low oil prices all goods will become cheaper due to lower transportation costs. Oil imports will be benefited from the falling oil prices as the value of their oip imports will drop.

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