. Discuss conditions under which an outsourcing vendor prefers a fixed price (FP) contract versus a time & material (T&M) contract?

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Questions:
1. Outsourcing for innovation is always challenging. Was the client aware of the challenges of outsourcing for innovation? Identify several innovation risks discussed in the case. What steps did the client take to minimize the risks involved in this type of outsourcing? Should the client take additional steps to minimize this risk?
2. Discuss conditions under which an outsourcing vendor prefers a fixed price (FP) contract versus a time & material (T&M) contract? Was the decision of Sasken to sign the FP contract for this project correct? Give specific examples from the case to justify your arguments.
3. Consider this question from the client’s perspective, too. Was the FP contract the right decision for the client? Give specific examples from the case to justify your arguments.
4. Why did the client choose Sasken Technologies to develop the satellite phone? Do you think these were the correct criteria?

 

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