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Supply Chain Management Professional (SCMP) · Question

Which contract pricing model shifts most of the risk from the buyer to the seller?

In a fixed-price contract, the seller agrees to a set price regardless of actual costs, making the seller responsible for cost overruns.

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Question: Which contract pricing model shifts most of the risk from the buyer to the seller?

Answer options: ✅ Fixed-price contract

  • Cost-plus-fixed-fee contract
  • Time and materials contract
  • Cost-plus-incentive-fee contract

Correct answer: Fixed-price contract

Explanation: In a fixed-price contract, the seller agrees to a set price regardless of actual costs, making the seller responsible for cost overruns.

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