Types of Contracts in supply chain management assignment sample

Types of Contracts in supply chain management assignment sample

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SAMPLE PAPER IN APA

Supply Chain Management

Name

Institution

Supply Chain Management: Types of Contracts in supply chain management assignment sample

The five types of contracts described in the text include the cost-sharing contract, fixed price contract, the time and material contract, incentive contracts, and cost-reimbursable contract. Cost-reimbursement contract involves a case where payment is made for all allowable incurred costs as indicated in the contract while fixed price contract provides an adjustable price that may include ceiling price or target price which may change depending on the operation of the contact clauses (Part 16 – Types of Contracts, n.d.). Furthermore, the cost-sharing contract is a form of cost-reimbursement contract where the contractor does not receive any fee and is mainly suitable for research and development work. Besides, incentive contracts are used when firm fixed-price contracts are the needed supplies can be obtained at a cheaper price (Part 216 Types of Contracts, n.d.). It acts to motivate the contractor and promote efficiency in work delivery. Finally, time-and-material contract refers to a case where the contractor provides supplies and materials on the basis of specified timeframe (Part 16 – Types of Contracts, n.d.).

The key factors considered in selecting the contract type include price competition, cost and price analysis, the type and complexity of the requirements, urgency in the contract requirement and contractors’ technical capability and financial responsibilities among others. The suitability of the contract type vary depending on the prevailing conditions and the costs involved. An effective price competition results in an effective and realistic pricing. In most cases, government institutions tend to go for the fixed-price contracts. Furthermore, the uncertainties involved in a given contract performance must be assessed carefully to avoid the possibility of incurring additional and unexpected costs in the course of the contract execution. The contracts may also be combined where necessary depending on the needs of the company involved.

References

Part 16 – Types of Contracts. (n.d.). Retrieved from https://www.acquisition.gov/content/part-16-types-contracts#i1105189

Part 216 Types of Contracts. (n.d.). Retrieved from https://www.acquisition.gov/dfars/part-216-types-contracts

Summary of Types of Contracts in supply chain management assignment sample

Types of Contracts in supply chain management assignment sample

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