Cost Risk – Service-Based

Select a service-based industry 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 as it relates to your selection.
• Explain and discuss why firm fixed price contracts are the greatest motivators of efficiency, as it relates to your selection.
• Explain and discuss the potential danger of using a fixed price redetermination contract, as it relates to your selection.
• Explain and discuss the objective that is satisfied by using an incentive arrangement.
• What are the elements of an incentive contract?
• Explain and discuss the irony involved in setting cost targets.

Instructions:

• 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  APA Requirements.
• This is an individual paper and you must adhere to CSU-Global’s Re-Using and Re-Purposing One’s Own Work guidelines.
• 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.