The supply chain contract that involves full refund for returned items as long as the quantity is below an agreed-upon threshold is called sales rebate contract.

A. True.

B. false.

B. False

Explanation:

This is false, as sales rebate is a different concept. The named contract is a quantity flexibility contract. Rebate is the discount which a buyer receives when buying a larger amount of goods. Rebate is determined by the contribution margin, as it has to be maintained to remain feasible for the seller.