Question

In: Operations Management

What type of contract is the seller most concerned with regarding scope? Fixed Price Cost +...

What type of contract is the seller most concerned with regarding scope?

  1. Fixed Price
  1. Cost + fixed fee
  1. Make or Buy decisions
  1. Time & Material

Solutions

Expert Solution

Question: What type of contract is the seller most concerned with regarding scope?
Ans. fixed price
Only fixed price can help the seller to set the project scope. Fixed price provides an idea on minimum profit that a seller surely can achieve from any project.


Related Solutions

in a fixed price contract, the seller assumes most of the risk. However, the buyer also...
in a fixed price contract, the seller assumes most of the risk. However, the buyer also assumes some risk. What issues might arise if the seller cannot meet the requirements with the agreed payment?
There are 2 basic types of contracts: the fixed-price contract and the cost-plus contract. Each has...
There are 2 basic types of contracts: the fixed-price contract and the cost-plus contract. Each has several common variations. It is not unusual for any specific contract to have special terms and agreements, so the basic contract is just the starting point. The project manager is most interested in the terms that define and help to control costs, schedule, and quality. Among the different types of contracts, which contracts do you think would be easiest for ADC to manage, and...
(1) What is a fixed price contract? Is the NYMEX WTI Crude oil Futures contract a...
(1) What is a fixed price contract? Is the NYMEX WTI Crude oil Futures contract a fixed price contract? Explain why or why not using an example. (2)Explain whether or not a fixed price contract can hedge a physical at index position. Or vice versa. Please answer both parts.
Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $150,000 and the target fee is $30,000.
Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $150,000 and the target fee is $30,000. The project is over, and the buyer has that the costs were, in fact, $210,000. Because the seller's cost came in higher than the estimated costs, the seller shares in the added cost: 60% to the buyer and 40% to the seller. The ceiling price is $200,000. Calculate the point of total assumption.$183,333
Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $150,000 and the target fee is $30,000.
Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $150,000 and the target fee is $30,000. The project is over, and the buyer has that the costs were, in fact, $210,000. Because the seller's cost came in higher than the estimated costs, the seller shares in the added cost: 60% to the buyer and 40% to the seller. The ceiling price is $200,000. Calculate the final price.$200,000
1) Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $9,000,000 and the target fee is $850,000.
1) Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $9,000,000 and the target fee is $850,000. The project is over, and the buyer has that the costs were, in fact, $8,000,000. Because the seller's cost came in lower than the estimated costs, the seller shares in the savings: 70% to the buyer and 30% to the seller. The ceiling price is $12,500,000. Calculate the final fee and final priceFee $1,150,000...
In a cost-plus-incentive-fee contract, a buyer and a seller agreed on a target cost of $7,000,...
In a cost-plus-incentive-fee contract, a buyer and a seller agreed on a target cost of $7,000, and a fixed fee of $1,000. Any cost overruns or underruns will be shared between the buyer and the seller by 50% and 50%, respectively. When the actual cost of $8,000 is incurred, how much will the supplier get paid in total?
In a cost-plus-incentive-fee contract, a buyer and a seller agreed on a target cost of $7,000,...
In a cost-plus-incentive-fee contract, a buyer and a seller agreed on a target cost of $7,000, and a fixed fee of $1,000. Any cost overruns or underruns will be shared between the buyer and the seller by 50% and 50%, respectively. When the actual cost of $8,000 is incurred, how much will the supplier get paid in total?
What is the difference between a fixed and a variable cost and how is each type...
What is the difference between a fixed and a variable cost and how is each type of cost used in the budgeting process? What are some examples of fixed and variable cost?
What are the buyer's duties when the seller delivers the contract goods?
What are the buyer's duties when the seller delivers the contract goods?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT