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Price breaks

Supply chain flashcard on Price breaks. Price breaks is a pricing mechanism that occurs when the margin unit price of goods decreases after reaching a certain purchase volume, essentially acting as an incentive: Price breaks? 50 spoons for 50€, 100 spoons for 80€. If poorly calibrated, it becomes a demand driver that can complicate planning as it makes purchases less frequent and less predictable: We already have MOQs, lets not add price breaks. It has two flavors: merchant and fiscal. Image depicts a professor drawing on a chalk board that 96 units cost equally to 120 units (there is a price break at 100 that lowers the price from 1dollar to 0.8) and a student with surprised look and thought bubble Bizarre. At the bottom there is a call to action: Price breaks should be optimized together with other demand drivers.

Artist: Marina Besfamilnaya

Learn more in the entry FAQ: Inventory Optimization of the Lokad knowledgebase.