CIPS Exam A8 Topic 1 Question 62 Discussion

Actual exam question for CIPS's A8 exam

Question #: 62
Topic #: 1

[All A8 Questions]

In which of the following situations is a 'fixed price contract' most appropriate?

AIn highly volatile market conditions where raw material prices fluctuate at regular intervals

BWhere the supplier is unable to give an accurate estimate of materials to be used in completing the contract

CFor a contract where the work can accurately be foreseen and accurately measured

DFor the provision of a service where there are likely to be numerous changes to the service requirement.

Show Suggested Answer

Suggested Answer: A

by Joesph at Jun 29, 2024, 10:33 PM

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Gabriele

5 months ago

That's true, but in general, fixed price contracts are more suitable for projects with clear scope and deliverables.

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Eura

5 months ago

But what about option D? Sometimes services can also be accurately measured and a fixed price contract could work.

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Daisy

5 months ago

Haha, D is a trap! Changing service requirements are the opposite of what you want in a fixed-price contract. You'd be better off with a time-and-materials or cost-plus arrangement for that.

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Jesus

5 months ago

I agree, C seems to be the correct answer. A fixed-price contract provides the most certainty for both the client and the supplier when the scope of work is well-defined.

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Elouise

4 months ago

I agree, a fixed-price contract is definitely most appropriate when the work can be accurately foreseen and measured. It helps avoid any unexpected costs or disputes.

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Henriette

5 months ago

I think C is the best option too. It's important to have a clear understanding of the work to be done in order to set a fixed price.

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Marsha

6 months ago

I agree with Gabriele, fixed price contracts are best when the work is well-defined.

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Hmm, C looks like the obvious choice here. A fixed-price contract is best when the work can be accurately planned and measured. Volatility and changes in service requirements are better suited for other contract types.

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Keneth

5 months ago

Yeah, it makes sense to use a fixed price contract when the work can be accurately foreseen and measured.

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Rasheeda

5 months ago

I agree, C seems like the most appropriate choice for a fixed-price contract.

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Gabriele

6 months ago

C) For a contract where the work can accurately be foreseen and accurately measured

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CIPS Exam A8 Topic 1 Question 62 Discussion

Contribute your Thoughts:

Gabriele

Eura

Daisy

Jesus

Elouise

Henriette

Marsha

Novella

Keneth

Rasheeda

Gabriele