Procurement - EBS (MOSC)

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Take-or-pay Contract

edited May 14, 2015 10:03AM in Procurement - EBS (MOSC) 2 commentsAnswered

Hi,

Has anyone come across a 'Take-or-pay' type of contract requirement and mapped it in Oracle? If yes, please share your experience.

A take-or-pay contract is a rule structuring negotiations between companies and their suppliers. With this kind of contract, the company either takes the product from the supplier or pays the supplier a penalty. For any product the company takes, they agree to pay the supplier a certain price, say $50 a ton. Furthermore, up to an agreed-upon ceiling, the company has to pay the supplier even for products they do not take. This “penalty” price is lower, say $40 a ton.

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