#Immediacy on speech making

It is assumed that you are offered a discount of 2 per ...

It is assumed that you are offered a discount of 2 per cent for payment within 14 days of invoice date, i.e.

approximately % month after delivery. Monthly payment = £14,000 - £120,000 x 2/100. = £14,000 £140 = £11,960 Interest saving = £12,000 x 15/100 x 0.5/12 = £112. CASE 4 DISCOUNT FOR BULK DELIVERY Once again practices vary in different trades but you should be able to adapt the calculation method to your needs. It is assumed that, you are offered a discount of 5 per cent for delivery in lots of £15,000, with payment one month after date of delivery.

Payment = £15,000 - £15,000 x 5/100. = £15,000 £1450 = £14,750 Interest saving = £15,000 x 15/100 x 1/12 = £165 After one month, you pay £14,750. But you would only pay £12,000 under the base case, so there is an outstanding overdraft of £12,750 £162.50 = £12,687 for which interest has to be paid during the second month.

Interest payable = £12,687 x 15/100 x 1/12 = £133. At the end of the second month, you would again pay £12,000 under the base case, so the outstanding overdraft is now £12,687 £12,000 + £133 = £1751. Interest on this sum is due for half a month only. Interest payable = £1721 x 15/100 x 0.5/12 = £14. The above calculations cover a period of two and a half months, so to make them comparable with the other cases, they must be divided by 2.5. Payment = £14,750_ 2.5 =£11,900 Net interest saving = £162 £133 £14 + £116 = £19 According to the above calculations, the bulk delivery discount looks the 'best buy'. However, we must emphasize the permeating the calculations with your own figures, since circumstances can alter cases quite drastically.

There are other factors to be considered in addition to the above calculations. There are more sophisticated ways of doing the calculations which may give slightly different figures, but considering the way order quantities and overdraft interest rates vary, we don't really think the extra work is justified. Buying In the previous section, we showed how to compare various types of discount, etc, to bring all the prices to a common base for comparison. This presupposes that the basic price of supplies is the same from all suppliers.

This is often not the case, so a correction must be applied to the basic price. This may be complicated if you buy a number of articles and if suppliers are cheaper for some articles and dearer for others. In such a case, you'll have to adopt the device used by statisticians when trying to compare the cost of living in different countries.

You construct a shopping basket consisting of the articles you buy most often. Obviously you haven't got the resources of the government statistical service, so you must keep it simple. Pick the smallest number of articles which will add up to 80-90 per cent of total supplies expenditure.

If this number is more than 10; then pick the 10 biggest and accept a less complete coverage. List the 10 or less articles which you buy most in sequence, putting the biggest at the top. Put another column alongside, listing against each article the annual quantity purchased.

Put a third column alongside, listing against each article the price charged by one of the suppliers.

In a fourth column, put against each article the annual cost of that article from that supplier i.e. col.. 2 x col. 3.. Total columns 2 and 4 and divide the total of 4 by that of 2 to give the weighted average price per article for that supplier. Repeat the process for each of the other suppliers.

Price is not the only consideration, of course; quality also matters. But ...

Price is not the only consideration, of course; quality also matters. But quality is not always easy to assess in the way it affects you. Where the yield of final output is

So before you make a final decision on bulk buying you should ...

So before you make a final decision on bulk buying you should check the financial and operational implications discussed above. Storage Depending on the nature of ... read more

Inside buildings it is better to have a lock-fast, caged area rather ...

Inside buildings it is better to have a lock-fast, caged area rather than a closed room.

If this can be within sight of your desk or office, this is much the better. Then you can