A volume commitment is one of the most powerful (and most over-used) levers in negotiation. It only generates real savings if (a) the buyer has confidence in forecasted demand and (b) the supplier’s cost structure is genuinely volume-sensitive. Otherwise it’s a discount the supplier was going to give anyway.
Lexicon entry
Volume Commitment
A buyer pledge to purchase a minimum quantity over a period, in exchange for preferential pricing or terms from the supplier.