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Subscribe to our channel and press the bell icon for more videos. To create a contract, go to logistics material management purchasing and outline agreements. There are two tools vendors use to negotiate with customers: contracts and scheduling agreements. Contracts are the primary tool, while scheduling agreements are used in specific industries. Focus on contracts in this chapter. Create a contract with vendor 4001 for 50,000 pounds of coffee at $9 per pound. Select the agreement type to proceed.