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Aspects Of Supply Chain Management

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Aspects of Supply Chain Management
Introduction
The basic reason for negotiating a contract is to reduce risk, and establish who bears the cost of the risk incurred. Identifying the responsibility of the parties and avoiding finger pointing when a business operation goes bad. Perkins (2008), in studying risk and reward contracts states that risk and reward contracts are highly specialized, and require careful and creative management to create. In constructing a risk and reward contract they take extra time and effort, but if designed and written properly, a risk and reward contract can provide benefits that can more than compensate for the additional effort. A well-designed risk and reward contract can be a motivating factor to suppliers, using a system of incentives and penalties to achieve desired results. During this paper we will briefly analyses the risk and reward factors involved when creating a contract. The onset of globalization has both altered and redirected the way a business organization does business, both domestically and internationally. One of the key areas in which globalization has changed business is in how these changes affected the legal aspects of business in contracts and negotiations. According to Wisma (2008),"NAFTA, Free Trade Agreements, Import/Export laws, and European Union policies have spurred the creation of a worldwide network of suppliers, vendors, and partnering institutions that spans nations and continents. Companies are changing the

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