Dictionary of Procurement Terms

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Search Results: 1-9 of 9 results for “Discount”

  • Cash Discount

    A reduction in the full cost of a good or service when payment is made within a specified period of time.

    See Also: Payment Terms, Prompt Payment Discount, Discount

  • Discount

    An allowance, reduction, or deduction from a selling price or list price extended by a seller to a buyer in order for the net price to become more competitive. More common forms of discounts include trade discounts, quantity discounts, seasonal discounts, and cash discounts.

    See Also: Payment Terms, Prompt Payment Discount, Cash Discount

  • Discount Rate

    The interest rate that the Federal Reserve System charges for loans to member banks. (Schiller, 2000)

  • Discount Schedule

    A listing of various discounts offered to the buyer for varying amounts of goods or services. May be requested as part of a solicitation.

  • Discount-From-List

    Mathematical calculation to determine the buyer’s price from a manufacturer’s price list. On non-automated term contracts, the manufacturer must submit a printed price list/catalog from which prices are to be figured. Prices in this category cannot be increased for a specified time after the contract begins, unless otherwise noted in the contract.

  • Prompt Payment Discount

    A reduction in cost offered by the supplier in exchange for early/accelerated payment by the customer.

    See Also: Payment Terms, Cash Discount, Discount

  • Quantity Discount

    A reduction in the unit price offered for a large volume contract. Economies of scale would dictate that the larger the volume/quantity, the lower the unit price or total cost.

    See Also: Volume Discounts, Volume Leveraging, Economies of Scale

  • Trade Discount

    A discount or reduction from a list price based on the position of the purchaser in the distribution channel, for example, as a distributor, retailer, or original equipment manufacturer.

  • Volume Discounts

    Discounts offered to a buyer from a supplier based on the quantity purchased, the size of the order, or total annual volume. It is based on the economic theory of economies of scale – the larger the quantity purchased, the lower the unit price.

    See Also: Quantity Discount, Volume Leveraging, Economies of Scale