A manufacturer of lighting fixtures has six warehouses and a pricing policy of charging freight from the closest warehouse to the customer,regardless of where parts are shipped.For instance,if the customer is in Vancouver,British Columbia,the closest warehouse to the customer is in Seattle,Washington.If the ordered car part actually comes from the Toronto warehouse,the customer still pays freight from Seattle.Which type of pricing is the manufacturer using?

Question

Quizplus · Accepted Answer

This is an example of basing-point pricing, where the price of goods is determined from a specific location (the closest warehouse in this case) regardless of the origin of the product.

A Manufacturer of Lighting Fixtures Has Six Warehouses and a Pricing