By: Beroe Inc. --
07 September, 2019
Length of fixed-price contracts largely depends on the volume procured. Food & beverage companies engage in long-term contracts, and relatively smaller buyers from personal care and pharmaceutical industries are offered short-term contracts.
Contract Length |
Short Term (0–6 months) |
Mid Term (6–12 months) |
Long Term (>12 months) | ||
Supply Base |
Single Supplier |
Multiple Suppliers (2–3) |
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Supplier |
Manufacturer |
Distributor |
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Pricing Model |
Fixed Price |
Index Based |
Contract Length : Beverage makers are the largest buying segment of preservatives. Length of contract largely depends on the volume procured.
Supply Base : Buyers split their procurement volume across 2–3 suppliers to leverage on tight competition and benefit from competitive pricing.
Supplier : To reduce cost, maintain consistency in quality and to measure supplier performance, buyers generally procure from manufacturers.
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(World Instant Risk Exposure)