ops 405 – ct 6

Option 1: Cost Risk – Product-Based

Select a product from on a product-based firm and answer these questions regarding your selection:

  • What does “cost risk” mean?
  • What two elements contribute to the calculation of cost risk?
  • Explain and discuss the impact of cost risk.
  • Explain and discuss why firm fixed-price contracts are the greatest motivators of efficiency.
  • Explain and discuss the potential danger of using a fixed price redetermination contract.
  • Explain and discuss what objective the use of an incentive arrangement satisfies.
  • What are the elements of an incentive contract?
  • Explain and discuss the irony involved in setting cost targets.


  • Your essay will require an organizational structure that includes the introduction section, conclusion section, and individual sections that address each of questions noted above.
  • Write a 3- to 4-page paper (page count doesn’t include the required title and reference pages).
  • Your paper must be properly cited and formatted according to the CSU-Global Guide to Writing and APA Requirements.title and reference page. ection headers, running header, souble spaced, apa format!
  • You must support your analysis with at least four scholarly references. Sources such as Wikipedia, USA Today, Fox News, or MSNBC news do not qualify as scholarly references. The CSU-Global Library is a good place to find these sources.
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