Funeral Home Management Lesson 3.3 (Terms)

Cash Discount

A discount from a quoted price used as an inducement for prompt payment of an invoice.

Quartile

A division of the total into four intervals, each one representing one-fourth of the total.

Itemization

A method of price quotation by which each unit of service and/or merchandise is priced separately.

Functional Pricing

A method of price quotation by which the charges are broken down into several major component parts, such as professional service, facilities, automobile, and merchandise.

Bi-Unit Pricing

A method of price quotation showing separately the price of the service to be rendered and the price of the casket.

Unit Pricing

A method of price quotation which creates one total price package for both service and merchandise.

Price Determination

A method used by management to establish the selling price for services and merchandise.

Fixed Multiple

A price determination method whereby the casket cost is multiplied by a constant factor; aka straight line, balance line, times factor.

Graduated Recovery

A pricing method where the markup varies, generally increasing as the wholesale cost increases; three variations: increasing, decreasing, and modified.

Package Pricing

A pricing method which groups together selected services and/or merchandise.

Markdown

A reduction of the selling price below the original selling price.

Consignment

A trading arrangement in which a seller sends goods to a buyer or reseller who pays the seller only when the good are sold. The seller remains the owner of the goods until they are paid for in full, and, after a certain period, may take back the unsold goods.

Median

A value in an ordered set of values which represents the midpoint, whereby there are an equal number of values above and below the midpoint value.

Quantity Discount

An incentive offered to a buyer that results in a decreased cost per unit of goods or materials when purchased in greater numbers.

Age of Inventory

Measures the average time required to sell inventory.

Fixed Dollar Amount

Pricing method in which the same dollar amount is added to the wholesale cost of the merchandise.

Markup

The difference between merchandise cost and selling price.

Wholesale

The list price a funeral home normally pays for a casket (or other merchandise) from the manufacturer.

Price Quotation

The method by which prices are explained to the consumer.

Sales Frequency

The number of sales of various products and/or services during a fixed period of time.

Inventory Turnover

The number of times the average inventory has been sold or used up (i.e. turned over) during a period.

Mode

The number that occurs most frequently in a listing of numbers.

Consumer Value Index (CVI)

The percentage derived by dividing the wholesale cost of the merchandise by the retail price of the merchandise.

Economic Order Quantity (EOQ)

The quantity to be purchased which minimizes total costs.

Merchandise Value Ratio (MVR)

The relationship between the wholesale cost of the merchandise and the total cost (both services and merchandise) to the consumer.

Rebate

The return of part of the original payment for some good or service or a partial refund.

Mean (Average)

The sum of a group of numbers divided by the number of units.

Range

The upper and lower limits of a series of numbers.

Inventory

Those goods or stock of goods which are held for resale; aka Merchandise.