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Unformatted text preview: explaining some sort of "sales by volume" deal, they may be more prone to lower their prices, however. One program that should absolutely be negotiated is program 10. If the price of program 10 was brought down from $500 to $400, then you could send your salesman to this program and reduce your costs. Meanwhile, the company that offers program 10 would get additional revenue of $400, which is greater than the price loss of $100. This trend could continue, moving price down until new revenue gained from new employee is equivalent to revenue lost from the price change. This happens to be at a price of $250, in which the 3rd party would gain $250 for the new employee but lose $250 for the original employee. These are the reasonable bounds for negotiation....
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- Spring '07
- Operations Research