We are trying to determine if it would be better for us to go with a multiple year contract for our lime requirements, rather than a single year. What are the advantages and disadvantages?
Many industries and municipalities have an annual contract for lime. One of the advantages of this type of contract is that it forces a lime user’s purchasing department to review the current market for lime in a one year cycle. Another important advantage is that it keeps all of the lime companies interested since they have an opportunity each year to go after the business. Contract Extensions: Municipalities, and some industries, will provide for annual extensions, sometimes up to three years, if both parties are in agreement. The general assumption is that holding the price for another year is always good for the organization. This is not always the case. In some instances, a lime company has recently lost a contract and needs to replace that lost tonnage. In those cases they may bid more competitively to replace the lost business. Also, the prices in the lime market do follow cyclical patterns as a result of changes in the economy, as well as the introduction of new kilns. Those in
Related Questions
- We are trying to determine if it would be better for us to go with a multiple year contract for our lime requirements, rather than a single year. What are the advantages and disadvantages?
- What are the chances that he could qualify for a 1 year post paid contract ? Actually are there ANY advantages to being post paid versus FlexPay?
- Course requirements change a little bit each year; which catalog should I use to determine exactly what I need to graduate?
