When Buying Highly Technical, Few-Of-A-Kind Products Such as Hydroelectric Power

question 231

Multiple Choice

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.

• A) at-market pricing
• B) experience-curve pricing
• C) cost-plus-fixed-fee pricing
• D) standard markup pricing
• E) yield management pricing

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Definitions:

SST

Often refers to the Total Sum of Squares, which is a measure used in statistical analysis to quantify the variation within a set of observations.

Linear Regression

A statistical method that models the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.

F Test

A statistical test used to determine whether there are significant differences between the variances of two or more groups.

T Test

A statistical test used to determine if there is a significant difference between the means of two groups, which may be related in certain features.