quantity discount


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Related to quantity discount: cash discount, trade discount

Quantity Discount

A lower price per unit a company charges in exchange for the purchase of a large number of units. For example, if the usual price for a product is $5 per unit and a buyer asks to purchase 10,000 units, the company may offer a quantity discount and only charge $3 per unit. Quantity discounts exist to encourage large orders, which, while they may reduce profit margin, increase revenue and therefore raw profit.

quantity discount

a price reduction from a supplier's LIST PRICE given to buyers of products according to the quantities that they purchase. Such BULK-BUYING discounts are often termed ‘trade discounts’, and they could be based on the size of a single order or could take the form of an AGGREGATED REBATE on the volume of cumulative purchases over a period of time. Quantity discounts are used both to secure orders against competitors and by encouraging larger, less frequent orders, to reduce the supplier's order and delivery cost.
References in periodicals archive ?
Despite the general belief that quantity discounts are prevalent in the marketplace, research has shown that in many instances, consumers may in fact pay more on a per-unit basis by purchasing larger quantities of a product.
The Impact of the Quantity Discount Mechanism on the Food Retailer and the Food Processing Factory before and after Coordination.
Jiang, "Quantity discount strategy for coordinating a three level supply chain with fuzzy random demand," Journal of Shanghai Jiaotong University, vol.
Previous inventory models with quantity discounts address both all-units and incremental (marginal) quantity discounts.
Assuming the contract parameters satisfy (10), the improved revenue-sharing contract based on quantity discount policy can coordinate the three-level supply chain:
Under the above quantity discount contract, the expected profit to the seller is
Depending on the wholesaler's power, it could try (1) a suggested list price of $300, or (2) keeping the original wholesale price of $280 but offering an all-units quantity discount of $50 per unit for purchases of 100 units.
Subjects were exposed to a single product that was priced as a quantity discount, a small magnitude quantity surcharge, or a large magnitude quantity surcharge.
Only licenses issued to the exact same legal entity may be treated as "one account" for alcoholic beverage inventory sharing, quantity discount price reduction or warehouse commingling purposes.
In this paper, an improved revenue-sharing contract based on quantity discount policy is proposed to coordinate three-level supply chain when demand depends on effort.
To order additional copies of this special issue at quantity discount prices, see the ad on page 22.
The price is a reasonable $39.95 per video, with a quantity discount available.