When negotiating with a supplier for strategic components that have high demand variability, which of the following types of contracts would be the best for the buyer to minimize stockouts and unused inventory?
When negotiating with a supplier for strategic components that have high demand variability, which of the following types of contracts would be the best for the buyer to minimize stockouts and unused inventory?
When dealing with strategic components that have high demand variability, a buy-back contract is advantageous for the buyer because it allows the return of unsold inventory up to a certain percentage, providing a refund or credit. This reduces the risk of stockouts by enabling the buyer to order sufficient quantities while also minimizing the risk of unused inventory if demand is lower than expected.
A buy-back contract allows the buyer to return unsold inventory up to a certain percentage and receive a refund or credit. This type of agreement reduces the risk of holding excess inventory, particularly in situations where demand is unpredictable.
Buy back ??