If a supplier signs an agreement with a customer that states $350 000 in savings will be earned by the customer over the next 18 months in an exchange for a ten-fold increase in the customer's share of supplies ordered by the customer, the two parties will have participated in what is called
A) consultative selling.
B) risk and gain sharing.
C) solution selling.
D) demand shifting.
E) strategic alignment.

Question

Quizplus · Accepted Answer

The agreement between the supplier and customer involves both parties sharing the risks and gains of the increased supplies ordered by the customer. The promise of $350,000 in savings for the customer is the potential gain, and the supplier's ten-fold increase in supplies is the risk they are taking on to achieve that gain. This is an example of risk and gain sharing. The other options do not accurately describe the nature of the agreement between the two parties.

If a Supplier Signs an Agreement with a Customer That