Question

Mike Morgan, a sales representative for a major food service distributor of General Mill Warm Delights, wanted to encourage repeat purchases by his grocery customers. In order to accomplish this objective, Morgan offered the following discounts to his customers: a 10 percent discount for buying 1-49 cases of Warm Delights within a calendar month; the discount increases to 12 percent if 50-99 cases of Warm Delights are purchased within the same calendar month; and the discount increases to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month. What type of discount was Morgan offering his grocery customers

Answer 1

A quantity discount

Step-by-step explanation:

A quantity discount analyses

This is often regarded as a technique used to examine the gradual growth change in cost between quantities all amidst or within a supplier's price quotation.

Its characteristics

1. This simply allows buyer to verify that quantity discounts are reasonable and also buyer may be able to negotiate price improvements

2. Buyer may be able to negotiate price improvements

Quantity Discount

This is simply a token or an incentive offered to a buyer that brings about in a decline in cost per unit of goods or materials when purchased in greater numbers. It is a marketing strategies used by sellers. It is offered by sellers to entice buyers to purchase in larger quantities.