Search results
Results From The WOW.Com Content Network
An important extension to the EOQ model is to accommodate quantity discounts. There are two main types of quantity discounts: (1) all-units and (2) incremental. [2] [3] Here is a numerical example: Incremental unit discount: Units 1–100 cost $30 each; Units 101–199 cost $28 each; Units 200 and up cost $26 each.
Discounts and allowances are reductions to a basic price of goods or services.. They can occur anywhere in the distribution channel, modifying either the manufacturer's list price (determined by the manufacturer and often printed on the package), the retail price (set by the retailer and often attached to the product with a sticker), or the list price (which is quoted to a potential buyer ...
By offering a quantity discount for a larger quantity the seller is able to capture some of the consumer surplus. [22] This is because diminishing marginal utility may mean the consumer would not be willing to purchase an additional unit without a discount since the marginal utility received from the good or service is no longer greater than ...
The Robinson–Patman Act (RPA) of 1936 (or Anti-Price Discrimination Act, Pub. L. No. 74-692, 49 Stat. 1526 (codified at 15 U.S.C. § 13)) is a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination. Co-sponsored by Senator Joseph T. Robinson (D - AR) and Representative Wright Patman ...
A good's price elasticity of demand ( , PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good (law of demand), but it falls more for some than for others. The price elasticity gives the percentage change in quantity demanded when there is a one percent ...
Time preferences are captured mathematically in the discount function. The higher the time preference, the higher the discount placed on returns receivable or costs payable in the future. One of the factors that may determine an individual's time preference is how long that individual has lived. An older individual may have a lower time ...
Blanket order. A blanket order, blanket purchase agreement or call-off order[1] is a purchase order which a customer places with its supplier to allow multiple delivery dates over a period of time, often negotiated to take advantage of predetermined pricing. It is normally used when there is a recurring need for expendable goods.
The economist Alex Tabarrok has argued, that the success of this promotion lies in the fact that consumers value the first unit significantly more than the second one. So compared to a seemingly equivalent "Half price off" promotion, they may only buy one item at half price, because the value they attach to the second unit is lower than even the discounted price.