A food producer has a long-term contract with a packaging supplier. The agreement renews each year unless the buyer gives notice after the annual review. Recent reviews show that the supplier has improved print quality but still misses agreed delivery windows during seasonal peaks. The buyer does not want to change suppliers immediately because qualification would be costly, but it also does not want automatic renewal to remove pressure for improvement. Which response best uses the contract mechanism?

Question

Answer

Convert the annual review into an informal discussion so that the supplier relationship is not affected by delivery disputes.

Answer

Remove the annual review from the contract because repeated review discussions can weaken supplier commitment.

Answer

Allow renewal because the supplier improved one performance area and switching would increase qualification cost.

Answer

Link renewal to a documented corrective-action period and use exit rights if agreed delivery levels are still not met.

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A food producer has a long-term contract with a packaging supplier. The agreemen...

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