Price and Discount Schedule Analysis: A Guide for Purchasing, Marketing, Materials, and Financial Managers

Discount schedule analysis (DSA), a technique illustrated and explained in this management book, provides analytical tools for increasing profits by linking prices and discounts to management decision making. According to the authors, the most direct way for manufacturers to affect the bottom line is to reduced the prices paid for goods and services. It is possible to achieve this profit leverage effect without switching suppliers or even requiring suppliers to reduce prices. The authors show how to analyze published quantitiy discount schedules to find out how the seller sets prices and how to break schedules down into fixed and variable (cost) components. With this information, corporate buyers can exploit vendors’ price and quantity discount schedules to maximum advantage. Conversely, coorporate vendors can forestall revenue losses and undesirable side effects of discount schedules by constructing schedules according to examples in the book. Using actual price schedules, the authors analyze the ideas, theory, hazards and advantages inherent in the schedules. They examine how quantity discounts are set, whether the price-setting practices are consistent, and whether the discounts meet their stated objectives. The book explains the gray market phenomenon and how to profit from it. It shows how to evaluate the true costs of such common sweeteners as free delivery, installation and delayed payment. The authors also analyze purchasing requirements for just in time (JIT) inventory systems. The book offers valuable methodologies for both the buyer and the seller. Purchasing managers as well as managers responsible for cost accounting, marketing, sales, finance and legal areas will benefit.