The Fixed Price Contract _____

question 52

Multiple Choice

The fixed price contract _____.

• A) requires developing a clear scope of work based on good information, creating a list of highly qualified bidders, and developing a clear contract that reflects that scope of work
• B) will create lower total project costs than other forms of contracts when there are changes on the fixed price contract
• C) requires the availability of at least one or more suppliers that have the qualifications and performance history that assures the needs of the project can be met
• D) are not very effective in managing project costs.
• E) offers a predictable cost for commodities and goods and services where the scope of work is very uncertain and likely to change

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Definitions:

Occupancy Cost

The total expense incurred for occupying a physical space, including rent, utilities, taxes, and maintenance.

Cycle Inventory

The portion of inventory that a business holds to meet its regular sales demand during a specific period.

Space Cost

Expenses related to the physical space required for operations, such as warehousing or retail locations.

Handling Cost

The expenses involved in moving, storing, and managing goods, including labor, materials, and overhead.