A fixed cost is a business model used when Gravelsoft provides to client full product development service. It guarantees a fixed budget for the project, regardless of the time and expense. The main advantage of a fixed price model is that it allows the client to plan and set an exact budget or services of software development company.
In Fixed Cost model, an outsource provider charges a fixed fee for the predefined deliverables. This model is mostly applicable for projects that have string constraints like a fixed scope, budget, and timeline. By running a fixed price, an outsource software development company and a client share some scope-related risks. So, a project scope should be well-defined and jointly decomposed and agreed from the early beginning, otherwise, it may impact cost and timelines. This model is best suited for small to mid-sized projects.Fixed Price model is a low-risk option for a client, as far as almost all risks are managed by outsource provider. In this model, a client shouldn't be necessarily engaged on daily basis monitoring project progress as all managerial overheads as well as risks are on provider.