What Are Some of the Disadvantages of Long-Term Supply Contracts

question 11

Essay

What are some of the disadvantages of long-term supply contracts?

---

Definitions:

EOQ

Economic Order Quantity, a formula used to determine the optimal quantity of stock to minimize total inventory costs, including holding and ordering costs.

Cost Per Order

A measure used to calculate the total cost associated with processing a single order, covering expenses from processing to shipping.

SCOR Process

A model used to evaluate and improve supply chain performance, covering key aspects such as planning, sourcing, manufacturing, delivery, and returns.

Stockout

A situation where items are unavailable in inventory, leading to potential lost sales or customer dissatisfaction.