Consistent Prices

Abstract

In different parts of this book, consistent prices are stipulated. In the short term, consistent prices have an advantage for the supplier. Inconsistent prices permit the buyer to use spikes in the upper direction. In the midterm, consistent prices are beneficial to both parties as the profit margin of the supplier is spread evenly over all the packaging items he supplies and both parties do not suffer from the disadvantages of combined costing. Consistent prices are prices that are fair at a certain point in time and this is normally achieved by having all the customer’s specifications run through the supplier’s quotation programme which then calculates a new price. When doing this, all the prices for the packaging items are calculated with the same “soft factors” (see Sects. 4.3 and 4.3.7). This implies that the margin expectations of the supplier will be the same for all the packaging items.