Module 10 - Chapter 14 - Assignment - Questions 3 & 8 PDF

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Mandatory assignment...

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MGMT-6082

Domestic International Sourcing Submitted By: Neenu Suresh babu-0950275

Module 10 – Chapter 14 Contract Management Weekly Assignment 1. What are the risks to buyers associated with each of these different types of contracts – justify your answer, provide an example is possible to illustrate a. Fixed Price b. Incentive c. Cost Based A) The Buyer knows the amount of payment due to the Seller at the commencement of the Contract. The buyer's responsibility is defined that let us then conclude that the Buyer's cost probability is very less. The purchaser is unconcerned with the volume of profit at the beginning of the sale. If the job is finished within the funds received by the Buyer, the Buyer can benefit, or else the vendor would lose money. Therefore, we can conclude that the vendor is concerned with making a profit. Various contracts bring different problems to customers since a fixed price contract produces a fixed pricing method independent of external changes world. if the sale price dropped below the contract sum due to external factors associated with technological advances, competition, or raw material prices, the consumer would have experienced substantial financial losses. B) The base price of a fixed-price deal with bonuses is determined by the prevailing business condition. Following the output of a predetermined quantity of products, all parties review their price arrangements and make changes. If the organisation is willing to save money on manufacturing, the difference is shared with the suppliers. if suppliers allow a corporation to reduce the production costs, the corporation would share the savings with the suppliers. Companies may lower their manufacturing costs by rising efficiency or eliminating the products that are used in production. Buyers interested with this arrangement have the option of agreeing on the cost of the goods before they are delivered.

MGMT-6082

Domestic International Sourcing C) The cost-based arrangement involves certain contractual terms that aid in identifying the costs involved in deciding the price of goods and services. Buyers do not benefit from cost-based deals because they transfer the risk of financial liability from the seller to the customer. In general, the procured materials used in this procedure are complicated and expensive. Parties interested in purchasing should consider all their options. 2. Under what conditions are short-term contracts preferable to long-term contracts, justify your answer and provide an example. Where the creditworthiness of the retailer cannot be determined, short-term contracts are preferred. It can be seen in situations where demand is volatile and the retailer has to check out other vendors before committing to a long-term relationship. Under either case, at the time of the agreement, the customer is hesitant or suspicious of the deal. Clients are dedicated to lowering premiums and moving on from the initial meeting. Since they have a small advertising budget, believe the one to perform miracles. Consumers who do not have full confidence in the organisation and its assets from the begin.There are numerous instances, such as unfair purchasers, a higher selection of incorrect suppliers, an erratic supply number, and the supplier's opportunistic conduct. [ CITATION TYL17 \l 1033 ]

References MARINELLI, T. (2017, August 24). Contract types. Retrieved from magoosh: https://magoosh.com/pmp/pmp-contract-types-examples/...