SR
ENExample situation: A Three-Year Fixed-Price Supplier Contract
Question
“Our main supplier offers a three-year contract with a fixed price 6% below the current one, but with a minimum annual purchase of 500,000 euros. Until now we bought as needed. Should we sign?”
What to question
How much did we actually buy in the last three years? What happens to the minimum if our demand falls? What does the contract say if the supplier does not deliver?
How the depth changes
Focused → broader → deepest
Four perspectives quickly separate a saving from an obligation: how much the 6% saving is worth per year against the risk of the minimum, how much we…
Five additional perspectives question the assumption that a stable price is always useful, model a downside where our purchases fall by 30% while the…
Six additional perspectives test total cost across demand and price scenarios, negotiating a lower minimum or a sliding scale, a second supplier as a…
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