Supply Chain Management Professional (SCMP) · Question
When is a 'fixed-price contract' generally most suitable for a procurement professional?
Fixed-price contracts are best when the scope is stable and costs are predictable, as the seller bears the risk of cost overruns.
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Question: When is a 'fixed-price contract' generally most suitable for a procurement professional?
Answer options: ✅ When the scope of work is clearly defined and risks are low
- When there is significant uncertainty about project costs
- When the project duration is very long and complex
- When the supplier is new and unproven
Correct answer: When the scope of work is clearly defined and risks are low
Explanation: Fixed-price contracts are best when the scope is stable and costs are predictable, as the seller bears the risk of cost overruns.
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