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Way Way Off Topic - Help with a pricing problem [SOLVED]

hjakehjake Posts: 1,274
edited February 2019 in The Commons

I could really use some help. I am frustrated and stumped.

Here is the problem as a fictional example:

I have someone who wants to buy an item that is worth $1000. They are entitled to a 10% discount so in the end I will sell them the item for $900.  BUT they have been told to insist on an additional 30% discount. So if I did what they were told to insist upon, they would obtain the following discount ($1000 - 30%) - 10% = $630. The person I deal with knows this is unreasonable and still they must get the discount and buy my item. I have to quote him in such a fashion that it appears he gets his requested discount but in actual fact buys the item for $900.

Question how do I determine the price to quote so in the end they pay me $900? I need to input this into an excel spreadsheet as a formula.

 

 

Post edited by hjake on

Comments

  • Charlie JudgeCharlie Judge Posts: 13,253
    edited February 2019

    $1,428.57

    A 10% discount staccked with a 30% discount is effectively a total discount of 37% (i.e. the net cost is 63%); so .63X=$900 or X = 900/.63=$1,428.57

    Post edited by Charlie Judge on
  • AlmightyQUESTAlmightyQUEST Posts: 2,006
    edited February 2019
    On my phone, but I think if you reverse the process (divide by .7, divide by .9), you will get the number you want. Weirdly in my example it worked whichever division you do first, which I thought order would matter but I'm probably just forgetting the rule. So, =[Target Result (900)]/(1-[percent a (.1)])/(1-[percent b (.3)]) but you will definitely want to test that work a few more examples since I can't really test it well myself at the moment.
    Post edited by AlmightyQUEST on
  • Matt_CastleMatt_Castle Posts: 3,010

    $1428.57

    $900, divided (not multiplied) by 0.9 (or 90%, the remainder of the 10% discount), divided again by 0.7 (70%, the remainder of the 30% discount). This will give you a number that when multiplied by the 90% and 70% fractions they will pay, will add up to $900.

  • LosingSignalLosingSignal Posts: 409
    edited February 2019

    The first thing I would do is get rid of the percentages. They seriously do nothing but confuse the math. Drop the percentage symbol, divide by 100, and subtract the result from 1. In your example, a 10% discount means paying 90% of the base cost, which is found by multiplying the base cost by .9. $1000 × .9 = $900. Your customer wants the extra 30%, which means he wants to pay 70% of your quoted price, so your new equation is $1000 × .9 × .7 = $630. But you want to know what to set the thousand to so that the "equals" becomes $900. Okay, so the algebra way of looking at that is X × .9 × .7 = $900. Rearrange and you get X = $900 ÷ .9 ÷ .7, or $1,428.5714285714.

    That's as a hypothetical math problem, though. You'd be a more honest dealer if you just deny the extra 30%, because the buyer is already getting his deserved discount of 10% off.

    Post edited by LosingSignal on
  • hjakehjake Posts: 1,274
    edited February 2019

    You answers helped. Thank you, but I seemed to have incorrectly stated the problem:

    Here is how it has to breakdown

    Quoted price X

    1st discount = X - 5%      I wrote =(C7/0.95)-C7

    2nd discount = X - 20%   I wrote =(C7/0.8)-C7

    3rd discount = X - 5%     I wrote =(C7/0.95)-C7

    and then add the 3 results to C7. I know this is wrong but not sure how.

    Each discount has to come off (individually) the unknown base price and then the all those discounted sub-totals have leave me with a discount price of $1000 which I then take off 10% and show him a sale price of $900.

    I thought take off 30% and take off 5/20/5 % was the samething but excel says no.

     

    Post edited by hjake on
  • hjakehjake Posts: 1,274
    LosingSignal said:

    The first thing I would do is get rid of the percentages. They seriously do nothing but confuse the math. Drop the percentage symbol, divide by 100, and subtract the result from 1. In your example, a 10% discount means paying 90% of the base cost, which is found by multiplying the base cost by .9. $1000 × .9 = $900. Your customer wants the extra 30%, which means he wants to pay 70% of your quoted price, so your new equation is $1000 × .9 × .7 = $630. But you want to know what to set the thousand to so that the "equals" becomes $900. Okay, so the algebra way of looking at that is X × .9 × .7 = $900. Rearrange and you get X = $900 ÷ .9 ÷ .7, or $1,428.5714285714.

    That's as a hypothetical math problem, though. You'd be a more honest dealer if you just deny the extra 30%, because the buyer is already getting his deserved discount of 10% off.

    I can not explain the details but it is not about being dishonest but dealing with bureaucratic/political complications. The reason it is giving me a headache is because I don't work this way but it is required in this instance.

     

  • AlmightyQUESTAlmightyQUEST Posts: 2,006
    edited February 2019
    If you are taking each discount off of the base price, then just add the discounts together. So you only need to divide once. That's really not how stacking multiple discounts should work though, but the situation seems confusing as it is.

    So if your second example is the real values, don't think of it as 5 percent off, 20 percent off, and then 5 percent off, it's just 30 percent off.
    Post edited by AlmightyQUEST on
  • kenshaw011267kenshaw011267 Posts: 3,805
    Charlie Judge said:

    $1,428.57

    A 10% discount staccked with a 30% discount is effectively a total discount of 37% (i.e. the net cost is 63%); so .63X=$900 or X = 900/.63=$1,428.57

    This. 

  • hjakehjake Posts: 1,274
    edited February 2019
    AlmightyQUEST said:
    If you are taking each discount off of the base price, then just add the discounts together. So you only need to divide once. That's really not how stacking multiple discounts should work though, but the situation seems confusing as it is.

     

    So if your second example is the real values, don't think of it as 5 percent off, 20 percent off, and then 5 percent off, it's just 30 percent off.

    A REALLY BIG THANK YOU TO ALL OF YOU WHO ANSWERED MY CRY FOR HELP  !!!!

    This might have seemed like a silly question but it was really vexing me and I most definitely needed your help to shift my thinking, so thanks.  May your good karma score rise to new levels.

    You are right, this is not a stacking discount. Each discount is applied individually to the "adjusted" list price. Once I have the adjusted list price, then I have to show each % being deducted from that adjusted list price. After each deduction is shown then I have show the resulting remainder as $1000 (for this example) THEN show the deduction of 10% for a final price of $900. This is not how I would do this, nor how the person I am dealing with would do this but it is required for the people they are dealing with.

    I know it is confusing but it is the constraint I have to deal with and I am not permitted to discuss the specifics beyond what I have written.

    Please confirm that I really have got it right?:

    If the price I will display is $1000 from which I will take off 10% to yield a selling price of $900 then I think my calculations look like this:

    A. List Price  (1000/0.70)                                 $ 1428.57

    B. 5% Discount 1   (1428.57*0.05)                    $    71.43

    C. 20% Discount 2 (1428.57*0.20)                    $   285.71

    D. 5% Discount 3   (1428.57*0.05)                    $    71.43

    E. Discounted Sub-total (A-(B+C+D))                $ 1000.00

    F. 10% Customer Premium Price (1000*0.90)    $   900.00  

     

     

     

     

    Post edited by hjake on
  • AlmightyQUESTAlmightyQUEST Posts: 2,006
    That looks right to me!
  • hjakehjake Posts: 1,274
    AlmightyQUEST said:
    That looks right to me!

    Big thanks. I will mark this as solved have a great evening.

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