Q:

What is a discount series?

A:

A discount series, also called a chain discount or trade discount series, occurs when multiple discounts are offered on the same item. Discount series are typically indicated with a series of numbers separated by slashes. The numbers are the percentages involved.

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For example, a 10/6/4 discount series means that the item is offered for sale first at a 10 percent discount, then 6 percent and then 4 percent. Vendors offer such multiple discounts in an effort to increase sales.

The formula for calculating the components of a discount series is: N = L(1-d1) (1-d2) (1-d3) ... and so on, depending on how many rates of discount are applied, where N is the net price, L is the list price and d are the rates of discount.

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