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  1. #1
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    Strip Averages (2000)

    I buy a commodity on a monthly basis based on a published price for that month. For example, I need to buy 58, 68, 86, 68, and 48 widgets for the months of November-March, respectively. Currently, the prices for those months are $9.35, $10.90, $11.53, $11.62, and $11.35, respectively. The simple average of those prices is $10.95. I have been advised to put in a "good till cancelled" order for 50% of my requirements for those months at a strip average of $10.50. That is, when the strip average (simple) averages $10.50, my supplier will sell and ship me 50% of each of the month's requirements. What I would like to compute is how much of a decrease in each month's price must take place to reach the $10.50 average. Any ideas?
    Thanks in advance.

  2. #2
    WS Lounge VIP sdckapr's Avatar
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    Re: Strip Averages (2000)

    Perhaps I am looking at it too simply but isn't the decrease just:

    =(10.95-10.5)/10.95 = 4.11%

    Steve

  3. #3
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    Re: Strip Averages (2000)

    Nope, Steve, you are spot on! Thanks (brain disfunction here)!

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