Reference no: EM132636406

The supplier have 1,000 kg of the product, which the buyer is intending to purchase it all after the negotiation with the supplier.

current price of the supplier = Rs 380/kg

the buyer is obliged to give away = 100 kg from this purchase

Initial subsidy = 10%

Additional subsidy = 17% (to fulfill the give away obligation)

Total subsidy = 27%

Problem 1: What ideal price should be offered to get the lowest possible purchase price to maximize the profit.

NB:

1. Any calculation should be rounded off to nearest rupee
2. If the buyer pays Rs 600/kg , he will make the profit of Rs 230/kg, but he is intending to maximize the profit by getting the lowest price possible