# Qrb501 Case Study 8-3 & 9-1

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## Description

. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one MicrosoftÂ® ExcelÂ® attachment. Also, submit a 1-paragraph MicrosoftÂ® Word document explaining any issues or successes you had in answering these questions.THE CASE INFORMATION: The Artist Palette sells high-end art supplies to the art students at three regional art and design schools in Philadelphia, Washington DC and Baltimore. It carries paints, brushes, drawing pads, frames, charcoal, pastels, and other supplies used in a variety of artistic media. Because the clientele is very discriminating, the Artist Palette tends to carry on the top lines in its inventory and it is known for having the best selection on hand. It is rare that an item is out of stock. Artist can visit the store, purchase from the Artist Palette catalog, or from the secure web site.
Refer to and use the following abbreviations for the problems below:
â€¢ PP = Parma minimum supply purchase
â€¢ S1 = Supplier 1
â€¢ S2 = Supplier 2
â€¢ CDF = Chain Discount Factor
â€¢ NP = Net Price
â€¢ NDE = Net Decimal Equivalent

1. The Artistâ€™s Palette purchases its inventory from a number of suppliers and each supplier offers different purchasing discounts. The manager of The Artistâ€™s Palette, Marty Parma, is currently comparing two offers for purchasing modeling clay and supplies. The first company offers a chain discount of 20/10/5, and the second company offers a chain discount of 18/12/7 as long as the total purchases are \$300 or more. Assuming Parma purchases \$300 worth of supplies, a) what is the net price from supplier 1? And b) From supplier 2? And c) From which supplier would you recommend Parma purchase her modeling clay and supplies?
2. What is the net decimal equivalent for supplier 1? For supplier 2?
3. What is the trade discount from supplier 1? From supplier 2?
4. The Artistâ€™s Palette recognizes that students may purchase supplies at the beginning of the term to cover all of their art class needs. Because this could represent a fairly substantial outlay, the Artistâ€™s Palette offers discounts to those students who pay sooner than required. Assume that if students buy more than \$250 of art supplies in one visit, they may put it on a student account with terms of 2/10, n/30. If a student purchases \$250 of supplies on September 16, what amount is due by September 26? How much would the student save by paying early?
5. Assume that if students buy more than \$250 of art supplies in one visit, they may put the charge on a student account with terms of 2/10 EOM. If a student makes the purchase on September 16, on what day does the 2% discount expire? If the purchase is made on September 26, on what day does the 2% discount expire? If you were an art student, which method would you prefer: 2/10, n/30, or 2/10 EOM?

Case 9-1 Template