Discount Analysis And Recommendations For Northwind Traders

Register to read the introduction… Orders were grouped by the percentage discount offered, with the results seen in the below graphic. Most of the orders were placed without any discount, followed by orders placed at discounts of 5% to 25%. It can be seen that for discounts in the range 5% to 25%, there is not much of a different or a direct relationship between the discount offered and the number of orders or quantities placed by the customer. Based on this, it can be concluded that there is no significant relationship between the discount level and the extra orders by a …show more content…
From the graph below we can see that the company has gradually added more countries to its target areas and has shown a consistent growth in revenues. Looking at the revenue movement of two of the company's biggest markets, USA and Germany, we can see that there is a trend of orders peaking and falling down in a span of every three to four months. This essentially shows that customers are ordering in large quantities and then not ordering for some time, and then ordering after a certain gap. One aspect that has to be examined is if these spikes and troughs are to do with discounts that are given on quality due to which customers are ordering in bulk and then not ordering at …show more content…
These spikes and troughs could be the result of price discounts that the company is offering due to which customers are buying in bulk and stocking up on products. This could lead to variability in demand, leading to excess demand or no demand that would lead to non-efficient production by the company. Root cause analysis should be performed, and if it is established that volume discounts are leading to this phenomenon, it is recommended that the company minimize discounting and work with the customers using a partnership model to ensure a steady