Use the Following to Answer the Questions Below

question 85

Multiple Choice

Use the following to answer the questions below.
A company is considering two suppliers for the purchase of a part needed for manufacturing. Particulars are as follows:

-Refer to the instruction above. For an annual volume of 3,000 units, which supplier should be chosen?

• A) Supplier A
• B) Supplier B
• C) Either Supplier A or Supplier B, because costs are the same for either option at 3,000 units
• D) Can't be determined with information given

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Definitions:

Incentive Fee Contract

A contract type that provides additional compensation to the contractor for exceeding performance targets.

Cost Reimbursable Contract

A contract where the buyer reimburses the contractor for all legitimate costs incurred plus an additional fee for profit.

Fixed Fee

A fixed fee is a pricing structure where a single set price is agreed upon for a service or project, regardless of the time or resources used.

Cost Reimbursable Contract

A type of contract where the buyer reimburses the seller for the seller's allowable costs, plus a fee representing the seller's profit.