arrangement

Materials Management (MM)

Understanding between business partners with regard to the granting of conditions (concessions that are conditional upon certain events) relating to a certain time period.

Example:

A customer and a vendor agree that the latter will pay a cumulative, end-of-period volume-based incentive rebate of 3% in the event that the customer purchases a total quantity of 100,000 pcs. of material A over a specified timeframe.