A Contract That Is Used to Induce Performance Improvement from a Supplier

question 46

Multiple Choice

A contract that is used to induce performance improvement from a supplier along dimensions,such as lead time,where the benefit of improvement accrues primarily to the buyer,whereas the effort for improvement comes primarily from the supplier is a

• A)buyback or returns contract.
• B)revenue-sharing contract.
• C)quantity flexibility contract.
• D)shared savings contract.

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Definitions:

Financial Institution

An organization that provides financial services to its clients or members, including banks, credit unions, insurance companies, and investment firms.

Prepayment Penalty Clause

A provision in a mortgage loan contract that requires the borrower to pay a penalty if the mortgage is repaid in full within a certain period.

Lender

An individual or institution that provides funds to another with the expectation that the funds will be repaid, typically with interest.

Mechanic's Lien

A security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.