Email from account manager to customer: I received your order for 50

Official Explanation

Question #1

Statement 1: No. In tab 2, the customer indicates that her boss is considering a change to the order (for now, hold off on the syringe order) but she does not mention that she would cancel the order entirely. In fact, in tab 3, the account manager offers an additional incentive to buy the syringes: your current order (with syringes included) qualifies for the 10% discount on the entire order. It is not clear what the customer will choose regarding the order as a whole.

Statement 2: No. The supplier does claim that his syringes will typically last longer than the guaranteed 20 injections. If a syringe lasts for 30 injections, that would be (30 - 20)/20 = 50% more injections than guaranteed. If a syringe lasts for 40 injections, that would be (40 - 20)/20 = 100% more injections than guaranteed. The supplier claims that his syringes typically allow for 50% to 100% more injections than the base level guaranteed.

Statement 3: Yes. In tab 2, the customer indicates that she is unhappy about the pricing and then states if we could get a volume discount, though, she [her boss] might still be willing to give you the order. This statement implies that the customer is already thinking seriously about switching to the other supplier.

Question #2

In an “Except” question, find the “odd one out” answer. Four of the answer choices describe negotiating tactics used by the customer. The remaining one (the correct answer) does not.

(A) Incorrect. The customer indicates the value of a long-time relationship by pointing out to the supplier that her company has been doing business with your company for years.

(B) Incorrect. The customer specifically asks for a large-volume discount.

(C) Correct. The supplier offers a concession, but the question asks about negotiating tactics used by the customer, not the supplier. The customer asks for a volume discount on the pumps; the supplier offers a volume discount on the entire order (if the customer keeps the syringe order).

(D) Incorrect. The customer both tells the supplier to hold off on the syringe order and mentions that a volume discount might make her boss willing to give you the order. Given that the customer is apparently willing to cancel at least part of the order, she may be willing to walk away from the entire deal if she finds better offers elsewhere for the other supplies.

(E) Incorrect. The customer states that her boss is upset about previous price increases.

The correct answer is (C).

Question #3

Statement 1: No. Tab 1 indicates that the 20-injection syringes sell for $40 per 50 syringes, or $40/50 = $0.80 per syringe. Each syringe is guaranteed for 20 uses, or $0.80/20 = $0.04 per guaranteed use.

Tab 2 indicates that the 30-injection syringes sell for $60 per 50 syringes, or $60/50 = $1.20 per syringe. Each syringe is guaranteed for 30 uses, or $1.20/30 = $0.04 per guaranteed use. Per guaranteed use, the two syringes cost the same: $0.04.

Statement 2: Yes. Before doing a lot of calculating, notice that in both scenarios the customer will receive the 10% discount. Therefore, you only need to determine which invoice would have the higher price (the original or the order after cancelling syringes). Since the purchase of pumps will not change, compare only the change in syringes and needles.

If the customer cancels the order for syringes, the remaining order would contain only 875 + 1,225 = 2,100 units; therefore, she would need to purchase an additional 2,500 – 2,100 = 300 units to receive the 10% discount. Single-use needles are sold 125 units to the box, so she would need to add 300/125 = 2.4 boxes. However, in tab 1, the account manager stated that the company does not sell partial boxes. The customer would therefore have to purchase an additional 3 boxes.

The 3 boxes of needles would cost the customer an extra (3)($25) = $75. However, she is saving $360 by cancelling the syringes. Overall, she will spend less money on this invoice by exchanging syringes for needles.

Statement 3: Yes. The syringes are guaranteed for a minimum of 20 uses. The needles are “single-use.” If she orders 450 syringes, they will be able to give a minimum of (450)(20) = 9,000 injections. There are more than enough syringes, then, to use up the 875 needles she plans to order.