High School

Permissible variations in quantity for fixed price supply contracts shall not exceed:
a. plus or minus 5%
b. plus or minus 10%
c. plus or minus 12%
d. plus or minus 14%

Answer :

Final answer:

The question pertains to permissible variations in quantity for fixed price supply contracts in Business, but a specific answer cannot be provided without reference to the actual contract or jurisdiction-specific procurement regulations.

Explanation:

The subject of this question is Business, particularly relating to terms of fixed price supply contracts. In the context of fixed price contracts, permissible variations in quantity typically refer to the allowed percentage by which the actual delivered quantity can diverge from the quantity specified in the contract. These limits are put in place to account for manufacturing variances and ensure both the buyer and the seller have a clear understanding of acceptable delivery amounts.

However, without a specific reference to contractual norms or a particular jurisdiction, a definite answer cannot be provided, as the permissible variation can be subject to the terms agreed upon by the parties involved in the contract or applicable procurement regulations. Businesses often have to manage variations in quantity supplied, price control, and price ceilings, as they can affect the overall market.

Final answer:

Permissible variations in the quantity for fixed price supply contracts typically stay within a small range, with plus or minus 10% being a common standard. However, the exact percentage should be verified as per specific contract terms or regulations (option b).

Explanation:

The question seeks to clarify the amount of permissible variations that can occur in the quantity for fixed price supply contracts. Fixed price supply contracts are agreements where the price for the supply of goods or services is not subject to change regardless of changes in the cost to the supplier. These contracts may allow for certain permissible variations in quantity to account for minor discrepancies in production, supply, and deliveries.

The information provided does not contain the exact percentage but usually, it is logical that such permissible variations would remain within a small range to protect the integrity of the fixed price agreement between the buyer and the seller. Therefore, a typical standard for permissible variations would be closer to plus or minus 10%.

Though the table and additional percentages provided (5% unit operations, 2% refrigerated items, etc.) are related to cost adjustments rather than permissible variations in quantity, they do illustrate the type of additional costs that can influence contracts. However, it is important to note that the exact permissible variation percentage may be detailed in the specific contract or by the regulations governing those contracts.

Hence, the answer is option b.