Lesson 2: Pricing - Calculating the Better Price Example 2

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A video describing making a purchasing decision taking into consideration both quality and quantity is provided.


EXAMPLE 2

Aubrey is tasked with buying 250 cans of pop for a charity fundraiser. At the local market, a case of 12 cans costs $3.50, but the same case could be purchased on a 10% off Tuesday sale. At the wholesale store, flats of 24 cans cost $5.99 but there is no other promotion. Which is the better deal for the 250 cans of pop? Disregard GST and deposit (for each can a deposit of $0.10 would normally be paid).

Solution


Local Market

At the local market, the pop comes in cases of 12

Step 1: Determine how many cases are needed

number of cases = \(\frac{250\,\text{cans}}{12\,\text{cans/case}}\)
= 20.833... cases

Because you can't buy part of a case, 21 cases will be needed. There will be a few extra cans of pop.

Step 2: Determine the total cost of the 21 cases before the 10% discount is applied.

total cost = 21 cases × $3.50
= $73.50

Step 3: Determine the sale price of the 21 cases.

A shortcut is to calculate 90% of the total cost.

sale price = $73.50×90%
= $73.50×0.90
= $66.15

At the local market, the cost of the pop, before GST and deposit, would be $66.15 if you purchase it on a Tuesday.

Wholesale store

At the wholesale store, the pop comes in flats of 24 cans.

Step 1: Determine how many flats are needed

number of flats = \(\frac{250\,\text{cans}}{24\,\text{cans/flat}}\)
= 10.416... flats

Because you can't buy part of a flat, 11 flats will be needed. There will be a few extra cans of pop.

Step 2: Total cost of the 11 flats.

total cost = 11 flats × $5.99
= $65.89

Since there is no other promotion, the total cost of the pop at the wholesale store would be $65.89.

Final Answer
Aubrey should buy the pop at the Wholesale Store because it is cheaper by $0.26. In addition, Aubrey isn't forced to make the purchase on a Tuesday. Finally, Aubrey would end up with 264 cans of pop (11 flats × 24 cans) which is 14 more cans than he would end up with at the Local Market (21 cases × 12 cans is 252 cans which only gives 2 extra cans).

or

Aubrey should buy the pop at the Local Market because the flats at the Wholesale Store are too big. Aubrey may not be able to purchase as many varieties of pop if he purchases by the flat. It may be better to pay the extra $0.26 and purchase the pop at the Local Market so people attending the fundraiser have more variety to choose from.

Again, both answers are correct as long as a written explanation is given with the mathematical calculations.


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