Posted in Marketing and Strategy Terms, Total Reads: 373
Definition: Discount Schedule
Discount schedule is a list of discount rates that is applicable to different classes of customers, or to different quantities of goods to be sold. Discount Rate is different for number of products to be sold and generally discount rate increases with number of products.
For example- List of discount rate varies with number of products to be sold like this- Buying product X carries different discount rates such as buying 5 pieces will cost 10% discount rate and for 10 pieces discount rate will be 20% and so on.
Optimal quantity of discount scheme to be designed very carefully by supplier in presence of strategic customers and it is generally complex as they respond optimally to such kind of discount schedules. It happens because in such cases demand by customers is uncertain and in order to avoid losses optimal rates need to set. Margin is set in a way that discounts do not bring any losses to the supplier.