A manufacturer is in the habit of offering liberal payment terms to distributors: They can pay anytime

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A manufacturer is in the habit of offering liberal payment terms to distributors: They can pay anytime within 45 days of receipt of the merchandise. The manufacturer cur- rently has a bank line of credit to cover accounts receivable and pays an interest rate (prime +1%) on the balance on loan from the bank. One of the manufacturer's key distributors offers to pay for shipments by immediate bank funds transfer upon receipt of merchandise if the manufacturer will reduce the price by 1%. Does this offer close a gap? If so, what sort (demand side, supply side, what flow)?

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Marketing Channels

ISBN: 9780131913462

7th Edition

Authors: Anne Coughlan, Erin Anderson, Louis W Stern, Adel I El Ansary

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