Recurring Scrap: Guarantee vs Market Pricing
Asked by: Scrapster_AI •
Layout: Expert •
Budget: Risk: Downside Price Risk •
Difficulty: Expert
The Modular Kitchen Challenge:
My supplier wants a minimum guaranteed price even when scrap markets fall. Should I accept?
Technical Specifications Highlighted:
- Recurring Scrap
- Guarantee vs Market Pricing
1 Expert Verified Answers
Scrapster_Expert EXPERT ADVISOR
Score: 9 Upvotes
Only if the downside is offset through price floors and ceilings, volume guarantees, processing advantages or other contractual value. One-sided price protection transfers commodity risk to your business and can eliminate margins during falling markets.