Question

# Dav has received the following quote from a supplier of replacement ink cartridges used in laser...

Dav has received the following quote from a supplier of replacement ink cartridges used in laser jet printers:

 Quantity Unit Price 1 \$25 2 \$21 5 \$19 10 \$15 13 \$14
 Number of units/order 1 2 5 10 13 Price/unit (quoted) 0 \$25 \$21 \$19 \$15 \$14 Total price / order 0 Price difference between orders Quantity difference/order Price/unit/order quantity difference

Assignment:

Using the format illustrated in Chapter 12, calculate a quantity discount analysis for a quote using specific quantities.

What quantity should Piet order if he wants to receive the lowest incremental costs between quantities?

Other than price and discounts, what must a buyer consider when determining what quantity to purchase?

1.In this discount approach based upon the quantity, once the quantity ordered is getting high, the discount rates also goes high. so a supplier with a bulk purchase will gain a lot as he'll order in bulk. So As you'll order more of the quantity, you'll be left with lesser price to pay .

2. If he wants to receive the lowest incremental cost he should order between 6 to 10 units as incremental cost is lowest =( 15*10)-(5*19)÷5

=55/5= 11 per unit

3. Yes, Incremental cost increases after 11 units to 13 units so one will buy lesser between 6 to 10 units.

4.A buyer should determine credit periods, credit terms, fiduciary relationship, after sales services, quality of products etc.

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