You are representing Jones Catering, a small firm that provides catering services to commercial, industrial and some private upscale homeowners in and around the city. The company has three vans for delivering prepared buffet-style meals to the various locations. The vans need to be replaced and you expect to buy from Singh Chevrolet where you have purchased all of your vehicles in the last 10 years. You have been very pleased with Singh's service. You will trade in your current vans which are about 4 years old, have an average of 175,000 km. and are in generally poor condition. You have done some background shopping and have received prices from two dealers but suspect you are being "low-balled" by at least one of them. NOTE: you want to pay the least possible for the vans and get the most possible for the trade-ins PRICE FOR 3 NEW VANS: Target $ Resistances The manufacturer's suggested price for the vans is $60,000. each ($180,000. in total.) Based on experience, you feel it is possible to get as much as a 10% discount off this price. One dealer has quoted you a price of $166,000. and another (whom you suspect of being unreliable) would only indicate a price range ($156,000. - $160,200.) Because of this information, the price you are hoping for is around $162,000. In order to deal with Singh Chevrolet, you might go slightly higher, though certainly not more than $163,800 ALLOWANCE FOR TRADE-INS: Target $ Resistances The first dealer you went to (who quoted you the $166,000 new price) also offered to buy your trades for $19,000. each ($57,000. in total.) You have now set this ($57,000.) as the minimum you will accept, but you are hoping for more. You would like to see a trade-in allowance of around $63,000. CUSTOM WORK: Targets Resistance $ You must have your warming and refrigeration equipment moved into the new vans and connected up. A local garage will do this for $2.100., for all three vans, but you would rather have the dealer, Singh, do it before you get the new vehicles. (In this way the work will be covered under warranty, and you will not lose use of the vans while they are being worked on.) In any event, you are not willing to pay more than the $2.100., the local garage will charge, even though you hope to get the work for as little as $1.800. DELIVERY: Target $ Resistances You would prefer that the dealer send someone to deliver the new vans and pick up the trades at your office. This is not critical but you calculate that it will cost you about $75. if you have to send one of your employees to the dealership and this is how much you would wish to pay for the
