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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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