Question

A certain manufacturer sells a product to the stockist at 10% profit. Then the stockist sells to the dealer and the dealer to the retailer at the same margin. The retailer marks up the cost by 20% and then offers a 10% discount to the customer. If the customer brought it from the manufacturer directly (he would still keep his 10% margin), what is the percentage reduction in price that he would get in approximate terms?

Answer 1

Answer:

he would have gotten the product for 21% cheaper

Answer 2

Solution :-

Let us assume that, the cost price of product for manufacturer is Rs.100x .

so,

→ manufacturer sells the product to stockist at = 10% profit => (100x * 110)/100 = Rs.110x = CP for stockist .

now,

→ SP of stockist at 10% profit = CP for dealer = (110x * 110)/100 = Rs.121x .

again,

→ SP of dealer at 10% profit = CP for retailer = (121x * 110)/100 = Rs.133.1x .

given that,

• The retailer marks up the cost by 20% and then offers a 10% discount to the customer.

so,

→ SP of retailer = CP of customer = 133.1x * (120/100) * (90/100) = Rs.143.75x .

now, if the customer brought it from the manufacturer at 10% margin ,

→ CP of customer = Rs.110x .

therefore,

→ Reduction in price that customer gets = 143.75x - 110x = Rs.33.75x .

hence,

→ % reduction = (33.75x * 100) / 143.75x ≈ 23% (C) (Ans.)

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