Common use of Production capability Clause in Contracts

Production capability. Supplier will ensure that it can increase or decrease production of Products in all market conditions, using the amount of any Product set forth in week 10 of the previous fiscal quarter’s Rolling Forecast as a baseline from which to increase or decrease production (“Baseline”), as follows: · Increase or decrease of thirty percent (30%) of Baseline if the increase or decrease is to be implemented within four (4) weeks; and an additional · Increase or decrease of thirty percent (30%) of Baseline if the increase or decrease is to be implemented within eight (8) weeks. Except as provided in Section 7.2 below, Supplier shall bear all costs incurred to meet Baseline increases or decreases, unless the parties otherwise agree in writing. Notwithstanding the above, this Section shall not apply to the extent Supplier is fully participating in a Cisco Lean Hub pursuant to a valid Lean VMI Agreement and is shipping Product to such Hub. For example, Supplier shall only be relieved of the flexibility requirements for those Products and those Hubs that are operating under a valid Lean VMI Agreement.