APICS Certified Supply Chain Professional (CSCP) — Question 431

The ultimate goal of a supply contract is to achieve which of the following outcomes?

Answer options

• A. Minimize the risk of stockouts for the buyer.
• B. Reduce the risk of excess inventory for the supplier.
• C. Share risk and increase profits for both entities.
• D. Decrease quality issues and product returns.

Correct answer: C

Explanation

The correct answer is C because the ultimate aim of a supply contract is to foster a mutually beneficial relationship that enhances profitability and shares risks between the buyer and supplier. Options A, B, and D focus on individual risks or issues rather than the collaborative goal of maximizing benefits for both parties.