ACTIVITIES

exercises

 section A

 1) When transportation cost is already covered by the supplier, the pricing arrangement is called __________ .

 A. FOB factory =) <-- the answer
 B. FOB destination
C. FOB plant
 D. FOB place

 section B

 1) By using FOB destination method of pricing, single price is established at the factory location ( A )

 2) In FOB destination , transportation cost has already been included in the price( B )

 3) Under FOB pricing, FOB destination means transport cost is excluded in the price of the product ( B )

section C

 1) There are many types of geographic pricing methods. Explain briefly the following methods

 a. zone pricing
 < answer >
 when the customer are dispersed over a wide geographically area, zone pricing reduce the complexity of chasing diff price for each customer

 b. single pricing
 < answer >
 single price level is used to all customer regardless of their location.

 c. basing-point pricing
 < answer >
 price is computed as if the product was delivered from the new point in order to compete on price against competitor in the geographical area .