Flexible or Option Contracts
{"Image DocumentName": "Flexible or Option Contracts", "Image ImageDescription": "Buyer pre-pays a relatively small fraction of the product price up-front. Supplier commits to reserve capacity up to a certain level. Initial payment is the reservation price or premium. If buyer does not exercise option, the initial payment is lost. Buyer can purchase any amount of supply up to the option level by: paying an additional price (execution price or exercise price) agreed to at the time the contract is signed. Total price (reservation plus execution price) typically higher than the unit price in a long-term contract.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}