Volume discount

Some restaurants and most institutions (for example, schools) have long-term contacts with suppliers, with the institutions having more layers of bureaucracy. They also usually ask for volume discounts, so the farmer will have to adjust the initial pricing accordingly. Some institutions contract out their food to caterers and this may or may not... 

Contact the manufacturer s sales representative for a specific quote to obtain a volume discount price. 

Companies make money in essentially two ways - they either increase revenue and/or reduce costs. On the revenue side, the business case for CSR is more difficult to quantify reliably, for too many factors influence a company s performance. The general economic climate, industry conditions and market demands, volume discounts to distributors to clear out inventory, and acquisitions all affect revenue, but none has anything do with a company s CSR. Similarly, with stock price, while CSR companies may be more attractive to socially responsible investors (SRI), their corporate responsibility is only one of a half dozen or more factors that influence the buying decisions of money managers and stock analysts. 

Satellite symposia usually come with fixed price tags payable to the sponsoring academic society. If the budget will not support it, then shop around almost every discipline has more than one annual meeting of interest. Furthermore, contracting for a satellite symposium at each annual meeting for the next three years can obtain a volume discount, but you should reserve the right to retail those that you have paid for, just in case you do not need them. 

PBMs have contractual relationships with retail pharmacies and share a common electronic network. Through this common network, prescription claims can be sent to a common point of collection (the PBM). Large PBM-retail networks offer customers easy access to prescriptions throughout the United States. Network relationships are less costly to PBM customers due to volume discount and greater billing/payment efficiencies (e.g., all pharmacies that contract with the PBM are part of that PBM s pharmacy network). 

Providing volume discounts and less administrative cost to the payer, by virtue of making payments to only one business, makes mail order a cost-efficient alternative. Patients are often incentivized to use mail order services with offerings of home delivery, discontinued multiple-month supplies of medication, and discounted copay-... 

Site arrangements vary. The site may be leased by the industrial gas supplier or it may be purchased outright. Utilities are most often supplied by the customer because volume discount based on a much larger usage for a refinery or petrochemical plant offers a significant savings. 

As shown in Table 1, there are many kinds of pricing decisions that a firm must make. There is the decision on the specific price to set for each product and service marketed. But this spedflc price depends on the type of customer to whom the product is sold. For example, if different customers purchase in varying quantities, should the seller offer volume discounts ... 

Since becoming more sophisticated in the past few years because of real-time optimization capabilities (determining the best tender, given pricing and volume discounts, delivery schedules, and consignee), TMS packages will continue to be connected to a company s other business systems. 

Diapers are a steady-selling item at the retail store. Yet, in the past, Procter and Gamble (P G) faced large demand swings that percolated through the supply chain. These demand swings, termed the bullwhip effect, caused increased order volatility to suppliers and plants. One reason for such volatility was the different price brackets that were offered to retailers every day. Every retailer adjusted orders to attain the lowest cost procurement price for products. In addition, they offered products with volume discounts, discounts for joint purchases, customer backhaul discounts, and so on. The net effect was that the orders, i.e., demand seen by P G, was unpredictable, even if retail demands were reasonably stable. The impact of these demand fluctuations was substantial. Additional plant... 

M.Sc. Dissertation, Industrial Engineering Department, PUC/RJ Xia W, Wu Z (2007) Suppliers selection with multiple criteria in volume discount environments. Omega 35(05) 494-504... 

Volume Discounts. So far we have treated the price on a bundle as an all-or-nothing bid. An alternative is to consider supply curves, in which the price function is explicitly specified in terms of volume discounts for each item over which a total price is constructed for a given bundle. It is useful to assume that the supply curves are additive separable that is. 

Davenport et al [32] have studied the use of reverse multi-unit auctions with volume discounts in a procurement setting. Winner determination formulations are provided in Section 3.2.2, where we also discuss the introduction of business rules as side constraints, which is an important consideration in practical electronic markets. A combinatorial auction is used for single units (lot) of multiple items, with all-or-nothing bids are allowed and nonlinear prices are used to feedback information. Volume discount auctions are also used, when multiple units of multiple items are being procured and for the restricted case of bids that are separable across items. Another consideration in procurement auctions is that the outcome should be such that the final prices should be profitable for both the buyer and the suppliers, i.e. a win-win outcome. The competitive equilibrium property can be used to operationalize this notion of achieving a win-win outcome [32]. 

Even without the benefit of detailed economic analysis, one can infer that modes like pipeline, water, and rail have relatively large terminal/accessorial costs that air and truck via LTL have less substantial terminal costs and that truckload (TL), as a point-to-point service, has essentially no terminal costs. Greater levels of fixed costs for the carrier create a stronger incentive for the carrier to offer per-shipment volume discounts on its services, due to its desire to achieve the "economies of flow" discussed earlier. Not only does this have a direct impact on the relative cost of fhese modes, but it also has implications for the relative lead times of freighf fransif modes, as shown in Figure 4.3,... 

The horizontal cooperation that was initiated in the 1990s allowed small and medium supermarket stores to secure large purchases to achieve higher volumes, discounts, and improved purchasing... 

Fast quotes — call for today s specials. Volume discounts available. 

Terms costs are affected by net payment terms and any volume discounts. 

PRICING FOR COORDINATION In many instances, suitable pricing schemes can help coordinate the supply chain. A manufactmer can use lot-size-based quantity discounts to achieve coordination for commodity products if the manufacturer has large fixed costs associated with each lot (see Chapter 11 for a detailed discussion). For products for which a firm has market power, a manufacturer can use two-part tariffs and volume discounts to help achieve coordination (see Chapter 11 for a detailed discussion). Given demand uncertainty, manufactmers can use buyback, revenue-sharing, and quantity flexibility contracts to spur retailers to provide levels of... 

Several such pricing schemes can be designed. One such schane is for the manufacturer to charge a wholesale price of Q = 4 per bottle (this is the same wholesale price that is optimal when the two stages are not coordinated) for annual sales below =120,000 units, and to charge Cr = 3.50 (any value between 3.00 and 3.50 will work) if sales reach 120,(X)0 or more (see worksheet Volume Discount). It is then optimal for DO to order 120,000 units in the year and price them at p = 4 per bottle to the customers (to ensure that they are all sold). The total profit earned by DO (360,000 — 60,000p) X (p — Cg) = 60,000. The total profit earned by the manufacturer is 120,000 "X (Cr — 2) = 180,000 when Cr = 3.50. The total supply chain profit is 240,000, which is higher than the 180,000 that the supply chain earned when actions were not coordinated. 

A key distinction between lot-size-based and volume discounts is that lot-size discounts are based on the quantity purchased per lot, not the rate of purchase. Volume discounts, in contrast, are based on the rate of purchase or volume purchased on average per specified time period (say, a month, quarter, or year). Lot-size-based discounts tend to raise the cycle inventory in the supply chain by encouraging retailers to increase the size of each lot. Volume-based discounts, in contrast, are compatible with small lots that reduce cycle inventory. Lot-size-based discounts make sense only when the manufacturer incurs high fixed cost per order. In all other instances, it is better to have volume-based discounts. 

To get the quantity discount, DO may order 10,000 bottles over the last week even though it expects to sell only 3,000. hi this case, cycle inventory in the supply chain goes up in spite of the fact that there is no lot-size-based quantity discount. The situation in which orders peak toward the end of a financial horizon is referred to as the hockey stick phenomenon because demand increases dramatically toward the end of a period, similar to the way a hockey stick bends upward toward its end This phenomenon has been observed in many industries. One possible solution is to base the volume discounts on a rolhng horizon. For example, each week the manufacturer may offer DO the volume discount based on sales over the past 12 weeks. Such a rolling horizon dampens the hockey stick phenomenon by making each week the last week in some 12-week horizon. 

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