INVENTORY RISK MANAGEMENT Sample Clauses
The Inventory Risk Management clause defines how responsibility and liability for inventory are allocated between parties in a contract. Typically, this clause outlines which party bears the risk of loss, damage, or obsolescence of goods while they are in storage, transit, or awaiting sale. For example, it may specify that the supplier retains risk until delivery to the buyer’s warehouse, after which the buyer assumes responsibility. The core function of this clause is to clearly assign risk, thereby preventing disputes and ensuring both parties understand their obligations regarding inventory throughout the supply chain process.
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INVENTORY RISK MANAGEMENT. 8.1 End-Of-Life Inventory Support. SSCI will notify McDATA as parts reach End-Of-Life, through a supplier of SSCI declaring the End-Of-Life of its parts. SSCI will use best commercial efforts to locate and qualify a reasonable alternative to replace the End-Of-Life parts and/or components. If mutually agreed, SSCI will execute an End-Of-Life buy of such End-Of-Life parts or components on McDATA’s behalf. SSCI will continue to manage the End-Of-Life McDATA inventory for a mutually agreed upon term. SSCI shall use best commercial efforts to mitigate McDATA’s liability for carrying costs by requesting that its suppliers hold such inventory. SSCI shall provide to McDATA, on a monthly basis, a summary report of on-hand and projected End-Of-Life liabilities. SSCI must use best efforts to contractually require critical and sole source suppliers to provide [***] [***] notice of End-Of-Life and ensure continuity of supply during this period, including a final End-Of-Life buy at the end of the notice period.
INVENTORY RISK MANAGEMENT. 10 8.1 Lead Time Expectations....................................................
INVENTORY RISK MANAGEMENT. 8.1 Lead Time Expectations. SUPPLIER shall actively work with its suppliers to continually reduce component and in-house process lead times. Additionally, SUPPLIER will provide a tracking report on component lead times on a [***]basis. Such report will reflect the number of part numbers with lead time in [***] ([***])[***] increments.
8.2 Non-cancelable Non-returnable (NCNR) Rules for Components. Non-cancelable non-returnable (“NCNR”) is hereby defined as any component that is unique to McDATA’s Products and/or cannot be returned to the supplier or utilized by SUPPLIER on other customer programs. On a [***]basis, SUPPLIER agrees to notify McDATA in writing of any components that are considered to be NCNR and for which SUPPLIER intends to hold McDATA liable for payment to SUPPLIER, and McDATA will provide written acceptance of such liability within [***] ([***])[***][***]. Due to the dynamic nature of NCNR components, SUPPLIER may experience changes in NCNR designation that were not disclosed in writing. In such event, if material liability is created due to a forecast change by McDATA, SUPPLIER will provide backup data to justify the NCNR liability. McDATA may choose to use a letter of intent to provide a blanket authorization for low dollar NCNR items. Notwithstanding the above, McDATA must agree in writing to the components that constitute NCNR for which it may be liable for. SUPPLIER shall provide McDATA a monthly report of NCNR products.
8.3 End-of-life Inventory Support. SUPPLIER will notify McDATA as parts reach end-of-life, through a supplier of SUPPLIER declaring the end-of-life of its parts. SUPPLIER will use reasonable commercial efforts to locate and qualify a reasonable alternative to replace the end-of-life parts and/or components. If mutually agreed, SUPPLIER will execute an end-of-life buy of such end-of-life parts or components on McDATA’s behalf. SUPPLIER will continue to manage the end-of-life McDATA inventory for a mutually agreed upon term. SUPPLIER shall use reasonable commercial efforts to mitigate McDATA’s liability for carrying costs by requesting that its suppliers hold such inventory. SUPPLIER shall provide to McDATA, on a monthly basis, a summary report of on-hand and projected end-of-life liabilities.
INVENTORY RISK MANAGEMENT