i.Average price paid per tonne over a year?

ii. Average market price per tonne?

savings over a period?

hs rt 3 - Strategy tactics and operations 2: buying situations Example 13.5 The volume timing approach Assume that the price of a commodity with a constant monthly requirement of 100 tonnes is between 100 and 120 per tonne. The buyer is authorised to purchase up to 3 months tonne. April to June - the supply. the next three months to 120. An order is therefore placed for 300 tonnes at 100 per In January, market intelligence is that the current price of 100 is likely to rise over In early March, intelligence is that, over the next 3 months - price of 120 will rise further to 135. A further 300 tonnes are ordered at 120 per tonne. In early June, it is forecast that prices will fall. For each of the months July, August, September and October, therefore, only one month's supply is bought, at 130, 125, 120 and 110 respectively. In September, the forecast is of a further rise to 125. Therefore, a forward order for 3 months' supply is placed at 110 per The savings from forward buying on the upswing and hand-to-mouth buying on the ownswing are shown in the table. tonne. ort Market cos hs rt 3 - Strategy tactics and operations 2: buying situations Example 13.5 The volume timing approach Assume that the price of a commodity with a constant monthly requirement of 100 tonnes is between 100 and 120 per tonne. The buyer is authorised to purchase up to 3 months tonne. April to June - the supply. the next three months to 120. An order is therefore placed for 300 tonnes at 100 per In January, market intelligence is that the current price of 100 is likely to rise over In early March, intelligence is that, over the next 3 months - price of 120 will rise further to 135. A further 300 tonnes are ordered at 120 per tonne. In early June, it is forecast that prices will fall. For each of the months July, August, September and October, therefore, only one month's supply is bought, at 130, 125, 120 and 110 respectively. In September, the forecast is of a further rise to 125. Therefore, a forward order for 3 months' supply is placed at 110 per The savings from forward buying on the upswing and hand-to-mouth buying on the ownswing are shown in the table. tonne. ort Market cos