From the course: Excel: Business Process Analysis
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Examine impact of quantity discounts
From the course: Excel: Business Process Analysis
Examine impact of quantity discounts
- [Instructor] If you have ever purchased items for a store inventory or t-shirts for a club, you know that manufacturers give discounts if you purchase large quantities of the items. In this movie I will show you how to calculate the cost of ordering, at certain minimum levels, to find the lowest overall cost to your business. As my sample file, I'll use the Quantity Discounts workbook. You can find that in the Chapter 4 folder of the Exercise Files collection. The scenario is that I'm a regular purchaser of items from a supplier and they have decided to offer me quantity discounts. The discounts are shown in the table that I have in cells D2 through G6. For any quantity up to 1,000 I pay full price. If I buy 1,000 then the price becomes $14.70, with the 2% discount. 2,500 goes to 14.25. And 5,00 and above, I pay 13.50. So the question is, what is the best quantity to buy that reduces my total cost? And that will be a factor of the Annual Product Cost, Annual Ordering Cost and Annual…
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