When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.
A) at-market pricing
B) experience-curve pricing
C) cost-plus-fixed-fee pricing
D) standard markup pricing
E) yield management pricing

Question

Quizplus · Accepted Answer

Cost-plus-fixed-fee pricing is used to cover any cost overruns by adding a fixed fee to the actual costs incurred.

When Buying Highly Technical, Few-Of-A-Kind Products Such as Hydroelectric Power