As part of a long-term contract, a buyer may wish to use separate service level agreements (SLAs). If the targets are not met, which of the following options would compensate the purchaser?
Service credits are financial compensations provided to the buyer when the supplier fails to meet the agreed-upon service levels outlined in the SLA. They serve as a remedy for underperformance. Service guarantees are commitments to meet certain standards, service standards define the expected level of service, and service schedules outline the timing of service delivery, but none directly compensate the buyer for service failures.
[Reference:CIPS L4M3 Commercial Contracting Study Guide, Chapter 2, Section 2.2.2 – The use of service level agreements (SLAs)., , , , ]
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