I have written this article to provide a completely different perspective to the Contract Types. This article discusses mathematics and formulas behind different Contract Types. The article also defines some of the basic terms used in Procurement Management.
Let us first discuss some basic definitions of Procurement Management.
The total amount of money that is paid or promised to be paid by the Buyer to the Seller.
Deemed, Estimated or Actual Expenditure incurred by the Performing Organization (usually spoken in the context of the Seller).
Profit, reward or compensation earned or deemed to be earned by the Seller.
The amount of money per Unit that is paid or promised to be paid by the Buyer to the Seller.
Praveen Malik, PMP is a certified Project Management Professional (PMP®) with a rich 20+ years of experience. He is a leading Project Management Instructor and Consultant. He regularly conducts Project Management workshops in India & abroad.