Answer to Question #261376 in Marketing for Kesha

Question

two dealers list the same brand of photo copier at different list prices with differing trade discount series. one lists it at 5,697 php. with a trade discount series of 8/8/5 and free delivery while the other lists the same copier at 6,000 php with a trade discount series of 10/5/5 and php 150 delivery charge added to the net price. which is a better deal? how much does the buyer would save to a better deal? get the net price of both dealers. 

Answer 1

It is better to buy the printer from the first distributor. This allows the buyer to save PhP442.66.

Equivalently,

For the first distributor :

Discount series 8/8/5 is equivalent to 1 –0.980.920.92) = 19.592% discount.

Hence, the total discount is 19.592% 5,679 = PhP1,112.30

Discounted price of printer = PhP5,679 – 1,112.30 = PhP4,580.84

For the second distributor:

Discount series 10/5/5 is equivalent to 1 – 0.950.950.90) =18.78% discount.

Hence, the total discount is 18.78% PhP6,000 = PhP1,126.50

Discounted price of printer = PhP6,000 – 1,26.50 = PhP4,873.50

With delivery charge of PhP150,

Final price of printer = PhP4,873.50+150 = PhP5,023.50

Therefore, the first distributor has a lesser price than the second distributor even if the second distributor makes its delivery charge for free.