seasonal discount

Examples of seasonal discount in the following topics:

• Cash Flow

  • One way to get cash flow quickly is through seasonal discounts .
  • Seasonal discounts are price reductions given for out-of-season merchandise.
  • An example would be a discount on snowmobiles during the summer.
  • Another option is cash discounts.
  • A quick way to generate cash flow is to offer seasonal discounts.

• The Discount Rate

  • The Fed makes loans to depository institutions and charges different discount rates for each of discount windows.
  • The Fed offers three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate.
  • Seasonal credit is extended to relatively small depository institutions that have recurring intra-year fluctuations in funding needs, such as banks in agricultural or seasonal resort communities.
  • The discount rate for seasonal credit is an average of selected market rates.
  • Describe the Fed's primary credit, secondary credit, and seasonal credit lending programs

• Discounting

  • Seasonal discounts are price reductions given for out-of-season merchandise.
  • Electric power companies use the logic of seasonal discounts to encourage customers to shift consumption to off-peak periods.
  • For example, a 2% discount on bills paid within 10 days is a cash discount.
  • Trade discounts, also called functional discounts, are payments to distribution channel members for performing some function.
  • Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked.

• Examples of Price Discrimination

  • Coupons allow price sensitive consumers to receive a discount.
  • Age discounts: age discounts are a form of price discrimination where the price of a good or admission to an event is based on age.
  • Occupational discounts: price discrimination is present when individuals receive certain discounts based on their occupation.
  • An example is when active military members receive discounts.
  • Retail incentives: this includes rebates, discount coupons, bulk and quantity pricing, seasonal discounts, and frequent buyer discounts.

• Setting a Credit Policy

  • If a discount is offered, the amount of the discount must also be determined.
  • There are many purposes for discounting, such as to move out-of-date stock, to reward valuable customers, as a sales promotion, or to reward behaviors that benefit the discount issuer.
  • Some common types of discounts include:
  • Seasonal discount (for orders placed in a slack period for example).
  • Trade discount (usually given when the buyer agrees to perform some function).

• Analysis of Price Discrimination

  • Larger quantities are available at a lower price (higher discounts are given to consumers who buy a good in bulk quantities).
  • Coupons attract sensitive consumers to the same product by offering a discount.
  • Retail incentives: uses price discrimination to offer special discounts to consumers in order to increase revenue.
  • Incentives include rebates, bulk pricing, seasonal discounts, and frequent buyer discounts.

• Price Discrimination

  • Airlines use several different types of price discrimination, including: bulk discounts to tour operators, incentive discounts for higher sales volumes to corporate buyers, seasonal discounts, etc.
  • The airlines enforce the scheme by making the tickets non-transferable thus preventing a tourist from buying a ticket at a discounted price and selling it to a business traveler (arbitrage).
  • Airlines must also prevent business travelers from directly buying discount tickets.
  • An example is student discounts.
  • Price discrimination is very common in services where resale is not possible; an example is student discounts at museums.

• The Lender of Last Resort

  • According to the Federal Reserve Bank of Minneapolis, "the Federal Reserve has the authority and financial resources to act as 'lender of last resort' by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy. " Through its discount and credit operations, Reserve Banks provide liquidity to banks to meet short-term needs stemming from seasonal fluctuations in deposits or unexpected withdrawals.
  • The rate the Fed charges banks for these loans is the discount rate (officially the primary credit rate).

• Discount Policy

  • Fed's second monetary policy tool is the discount policy.
  • The Fed can grant adjustment, seasonal, or extended credits.
  • Seasonal credit is a loan to help small banks, located in agriculture areas or tourist destinations.
  • These areas experience wide fluctuations in income because farmers harvest crops once or twice a year, and tourists visit an area during high season.
  • Banks can abuse the discount window.

• Bullwhip effect

  • When the falling end-customer demand is finally realized, manufacturers rush to slash production, cancel orders, and discount inventories.
  • When seasonal demand increases jeans purchases, the retail stores order more Open Range jeans, but the manufacturers cannot respond quickly enough.
  • A stockout occurs at the retail store level just as customers are purchasing jeans during the back-to-school sales season.