This assignment explores the role of hedging strategies in managing price and supply chain risks within a manufacturing context. It discusses how firms can utilize hedging options to mitigate financial losses arising from price fluctuations and supply disruptions. The paper analyzes real-world examples, such as the steel price increase in 2011, to illustrate the impact of hedging on both suppliers and manufacturers. Additionally, it examines the influence of supply chain partner behavior on individual supplier hedging strategies and highlights the importance of considering factors like default risk and contract performance guarantees.