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What are the elements of an incentive contract

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Reference no: EM131574025

Assignment: Supply Cost Risk- Product-Based

Select a product from on a product-based firm and answer these questions regarding your selection:

• What does "cost risk" mean?
• What two elements contribute to the calculation of cost risk?
• Explain and discuss the impact of cost risk.
• Explain and discuss why firm fixed-price contracts are the greatest motivators of efficiency.
• Explain and discuss the potential danger of using a fixed price redetermination contract.
• Explain and discuss what objective the use of an incentive arrangement satisfies.
• What are the elements of an incentive contract?
• Explain and discuss the irony involved in setting cost targets.

Instructions:

• organizational structure that includes the introduction section, conclusion section, and individual sections that address each of questions noted above.

• Write a 3- to 4-page paper (page count doesn't include the required title and reference pages).

• Your paper must be properly cited and formatted APA guidlines

• Support your analysis with at least four scholarly references.

Reference no: EM131574025

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