10. What is Price Adjustment ? What is its role in Project Cost ? How to calculate it ?

Question

Accepted Answer

Price adjustment is a mechanism to account for changes in project costs. It helps in maintaining project profitability.

Price adjustment is a provision in a contract that allows for changes in project costs due to various factors such as inflation, currency fluctuations, or changes in material prices.
Its role in project cost is to ensure that the project remains financially viable and profitable despite cost fluctuations.
Price adjustment can be calculated using various methods such as fixed percentage adjustment, cost index adjustment, or formula-based adjustment.
For example, if a construction project has a price adjustment clause of 5%, and the cost of materials increases by 10%, the contract price would be adjusted by 5% to account for the increased costs.
Price adjustment is commonly used in long-term contracts or projects with uncertain cost factors.

Accepted Answer

Price adjustment is the method or formula for inflation calculation based on the indices released for the period of work done in consideration.The components ,it's weightage and base shall be as period Contracts

Accepted Answer

Price adjustment is the method or formula for inflation calculation based on the indices released for the period of work done in consideration.The components ,it's weightage and base shall be as period Contracts

10. What is Price Adjustment ? What is its role in Project Cost ? How to calculate it ?

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