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Asked Dec 9, 2019
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A retailer is considering the purchase of 500 units of a specific item from either of two suppliers. Their offers are as follows:
Supplier One: $40 a unit, total of $20,000, 1/10, n/30, no charge for freight.
Supplier Two: $39 a unit, total of $19,500, 2/10, n/30, plus freight of $500.
Which of the two offers, Supplier One or Supplier Two, yields the lower price?

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Supplier two Amount ($) $19,500 Particulars Supplier one Amount ($) Total price $20,000 ($200) $19,800 ($390) $19,110 $500 $19,610 Less: Discount Price after discount Add: Freight charges Final price $19,800 Working note 1 Discount percentage is 1% (1/10, n/30) Total price* Discount Amount of discount $20,000*1% $200 Working note 2 Discount percentage is 2% (2/10, n/30) Total price* Discount Amount of discount $19,500*2% $390

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