5.1 TRADE DISCOUNTS

5.1 TRADE DISCOUNTS - N = L D or Net price = List price (1...

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5.1 TRADE DISCOUNTS MERCHANDISING CHAIN : markup & markup & trade discounts trade discounts markdown for sale price Manufacturers Distributors Wholesalers Retailers Consumers (make product) (distribute product) ( sell product ) (buy product) to consumer Trade discounts are offered by manufacturers and wholesalers and distributors and retailers to each other in order to easily make pricing changes on products. Trade discounts are applied to the list price of the goods. A) SINGLE TRADE DISCOUNTS Discount = discount rate x List price D = d x L Net price = List price - Discount
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Unformatted text preview: N = L D or Net price = List price (1 - discount rate) N = L(1 - d) B) SERIES OF TRADE DISCOUNTS More than one trade discount may be given off the list price. Do not add the discount rates together ! Net price = List price (1 - discount rate 1 ) (1 - discount rate 2 ) (1 - discount rate 3 ) etc. N = L(1 d 1 )(1 d 2 )(1 d 3 ) etc. C) SINGLE EQUIVALENT RATE OF DISCOUNT This is the single trade discount that is the same as a series of trade discounts Single equivalent rate of discount = Discount = (List price Net price) List price List price...
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This note was uploaded on 04/04/2012 for the course MATH 1052 taught by Professor Kit during the Winter '12 term at Fanshawe.

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