Question

If you want to give a vendor an incentive to complete work early, which type of contract would you use?Select an answer:a. fixed priceb. time and materialsc. retainerd. cost plus

Answer 1

a. fixed price

Step-by-step explanation:

a. fixed price contract:

The vendor will be paid a fixed payment regardless his time spending. Thus the vendor will try to complete work as soon as possible, then he can receive his payment/ incentive for completed work.

b. time and materials contract:

The vendor will be paid based on time spent and material used. This contracts are normally used in construction.

c. retainer contract:

The vendor will be paid in advance for professional work to be specified later.

d. cost plus contract:

The vendor will be paid for all of its expenses, plus additional margin for its profit.