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Chain discounts are a popular pricing strategy used by retailers to incentivize customers to purchase multiple items from their store. This type of discount can be beneficial for both retailers and customers, as it can help increase store sales and customer loyalty, and help customers save money.
A chain discount is a series of trade discount percentages or their total. For example, if a list price (catalog price) denotes $100 and is subject to a 40-15-15 discount to dealers, the total or chain discount is $56.65 (i.e., $100-40% = $60, $60-15% = $51, $51-15% = $43.35. $100 – $43.35 = $56.65.). [1]
Chain discount refers to a pricing strategy where multiple discounts are applied successively to a product or service. For instance, if a customer purchases three products, a 10% discount will be applied to the first item, 15% to the second, and 20% to the third.
Chain Discounts Definition and Calculation. Chain discounts consist of multiple successive trade discounts applied in sequence. To find the net price equivalent rate, multiply the complements of each discount. For example, for discounts of 20%, 15%, and 10%, the complements are 80%, 85%, and 90%. Calculation:
7 wrz 2022 · EDLP can also result in more predictable consumer demand and therefore fewer stocking and supply-chain problems. High-low pricing strategies generally result in lower variable costs, since promotional retailers can sell more products by offering discounts.
What are Economies of Scale? Economies of scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between the per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost.
27 cze 2024 · The law of supply and demand combines two fundamental economic principles that describe how changes in the price of a resource, commodity, or product affect its supply and demand.
