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ANANTATECH HUB

Worked scenario

Supplying at last year's rate to a customer who never renegotiated

A rate contract without an expiry date in the system is a permanent discount granted by inattention.

3 min read

A rate is agreed with a regular buyer for six months. Six months pass. Orders continue to be priced at the agreed rate because that is what the system holds and nobody was reminded.

Input costs move; the contract does not

In a trade where cement and steel move with the market, a stale contract rate becomes loss-making without anyone deciding anything.

Expiry has to interrupt something

A validity date that is recorded and never enforced achieves nothing. The expiry must actually stop the old rate being applied, or the renegotiation will keep being deferred.

Margin per customer, at current cost

Not at the cost when the contract was signed. Suppliers reviewing this frequently find their largest customers are their least profitable, which is a defensible position only if it is a decision.

What changes

  • Rate contracts holding an explicit validity period
  • Expiry surfaced before it lapses, not after
  • Supply at contract rates blocked once expired
  • Margin per customer visible against current cost

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