exercises

Exercise 2: Pricing Exercise

General Information

1. We will discuss this exercise in class and you will begin working on it in class.

2. The completed exercise will be turned via our class Blackboard site in the appropriate drop boxes by the due date posted on the Course Syllabus

Business Case and Assignment Instructions

Microwave Products is a manufacturer of microwave-related products located at 1600 Douglas Road in Toledo, Ohio. Angela Higgins, their Director of Purchasing, has been talking with you about replacing some aging PIC copying equipment. Angela would like a mix of machines. Sendai for the corporate headquarters and NCC Business Machines for a satellite office. The machines must be able to link to each other as Angela has plans for content management software.

Angela has just informed you that Microwave Products would like to order the following equipment from WorldWide Distribution Center:

· Two SEN450ZF Photo each with 20 Bin Sorter, Auto document Feeder, Finisher, 2000 Sheet Paper Deck, Key Counter Socket, and Key Counters, Cabinet and Electronic Image Editing. 2 Black Toner Cartridges

· Two SEN5100 each with: 25 Bin Sorter with Stapler, and Autodocument Feeder, a 2000 Sheet Paper Deck, Cabinet, Electronic Image Editing, Key Counter Socket, and Copycount System. 2 Black and 2 Color Toner Cartridges.

· Three National Copier Corporation MN07C’s BASE MODEL ONLY.

· Three National Copier Corporation Universal Black Toner Cartridges.

· Three National Copier Corporation Shredders

· Three Sendai / NCC Business Machines Links

· Seven Scan to email links (1 for each copier ordered).

· Angela has opted to donate her older machines to a local charity.

· (For Class Discussion) What advice/additional costs would you give to Angela regarding a future upgrade to content management?

You will be computing the price from WorldWide Distribution Company (WWDC) for this customer. To do so you will need to convert Sendai and National Copier Corporation Direct Pricing to WWDC pricing. This will also help you prepare for the pricing differences you will encounter between your distributorship and direct sellers. You will not be providing the customer with a price comparison.

NOTE: You can use this spreadsheet as a way to show price comparisons in your final role-play (you will change the proposed equipment and quantity).

Find the list prices in the background materials. Discount machines only for quantity discounts. Discount to the WWDC negotiated price. Come up with your total. At the end, add pay on delivery discount: The customer will pay on delivery so they have earned a 3% discount on the total sale. (Note this is not the normal 2/10 net 30 due to the mix of machines and immediate payment on delivery)

You will be using Excel as your worksheet

1. Name the following columns:

Column A: Proposed Equipment

Column B: Base Price (Sendai/NCC Machines Direct Pricing found in your Background materials/STM)

Column C: Quantity

Column D: Extended Price (Quantity X Base Price)

Column E: Quantity Discounts Applied (if Any)

Column F: WWDC Discounts Applied

Rename the sheet 1 to pricing worksheet

2. Fill in Columns A, B and C

3. Write a formula that automatically converts the data in column B and C to Column D Quantity X Base Price. Formula will reside in column D Make Sure the entire column D is converted.

4. Write a formula that applies the quantity discounts from Sendai and National Copier Machines in Column E. Make sure the appropriate cells reflect the discount. (Hint not all products ordered receive a discount)

5. Write a formula in Column F that reflects the WWDC discount. Make sure the entire column is converted.

6. The Sum in Column F will need to be reduced by the customer delivery discount, designate a cell as total price and write a formula that reduce the total by 3%

7. ****You may copy the results into a word document that looks like the example that follows. 3 Extra credit points if you can copy your information into a new excel sheet, remove the grid lines and use excel to create the customer document.

8. Submit documents into the drop boxes in Black Board.

Format Example of Pricing Worksheet

(In Class Worksheet)

Purchase Agreement

Date: ____________________ Terms: ___________________

Ship to: Bill to:

__________________________ __________________________

__________________________ __________________________

__________________________ __________________________

Proposed Equipment/Supplies Description	Quantity	Quantity Discount	Unit Price	Total Price

Sales Representative: Sub Total:

(signature) Less adjustments (specify):

Customer:

(signature) Net Price: