Supply Chain Management Professional (SCMP) · Question
Which type of contract is generally preferred by buyers when the scope of work is well-defined and risks are low?
Fixed-price contracts offer the buyer cost certainty when the scope is clear, making them preferred in low-risk scenarios.
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Question: Which type of contract is generally preferred by buyers when the scope of work is well-defined and risks are low?
Answer options: ✅ Fixed-price contract
- Cost-plus contract
- Time and materials contract
- Incentive contract
Correct answer: Fixed-price contract
Explanation: Fixed-price contracts offer the buyer cost certainty when the scope is clear, making them preferred in low-risk scenarios.
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