Chapter 6 Mathematics of Buying

An elite group of World War I fighter pilots were distinguished by the determination and valiant qualities they displayed in combat. The term "Ace" was used to describe to this group. In 1924, a small chain of stores opened using the Ace name. The name signified a friendly, courteous, and helpful store atmosphere, as well as some of the same valiant qualities exhibited by the stores' World War I namesakes.

Ace Hardware began as an arrangement of Chicago-area hardware retailers. The retailers believed that their customers could be offered a wider selection of products at lower prices if the firms consolidated their resources. In 1973, Ace became a dealer-owned cooperative when Richard Hesse, the last surviving founder, sold the company to Ace retailers. Today, there are more than 5100 Ace Hardware locations across the United States and around the world.

In the 1980s, Ace experimented with new ways of increasing its presence in the marketplace. In 1984, Ace Hardware began manufacturing its own Ace paint. By the 1990s, Ace Hardware faced a new kind of competition from huge warehouse-style hardware chains. To meet the changing times, Ace implemented a strategic plan called "The New Retail Age of Ace." This plan reinforced Ace's commitment to provide their consumers with the best in hard-line products and services.

Ace has not changed its driving force and philosophy over the years-to meet the needs of the customer. Ace employees in their trademark red vests are proud to serve and assist do-it-yourselfers. Not only is Ace Hardware dedicated to assisting the customer in the store, but also in the community. The Ace Hardware Foundation, started in 1991, is a charitable organization that requests donations from Ace Corporation and other retailers. These donations are used specifically for disaster-relief services and support of healthcare for children. Ace also works to protect the environment through a variety of recycling programs.

All this information and more can be found at www.acehardware.com.

Problem:

Preparation:

In preparation for this problem,

• Review previous chapters of your textbook, specifically Chapter 3
• Review Ace history from the 1970s, 1980s, and 1990s
• Compile and organize available figures from the Web site, such as sales and growth figures

Questions:

1. In 1988, Ace signed a football legend to be their spokesperson. This legend's appearance on national television and radio commercials has made him a favorite with Ace customers. From the Ace home page, identify this spokesperson. Search the Internet for some facts about this football legend's career. Include the URLs for Web sites you visited to answer this question.

2. Ace's history reveals a pattern of growth, not only in sales but also in the number of stores throughout the United States and the world. Use the number of stores opened in the 1980s (from the 1980s history) along with the number of stores opened in the 1990s (from the 1990s history) and apply the increase/decrease formulas discussed in Chapter 3 of the text to calculate the percent of change in the approximate number of Ace stores from 1980 to 1990.

3. The Ace Hardware Foundation was started in 1991. By 1999 total contributions to benefit victims in natural disasters totaled over $145,000. Find the average yearly dollar amounts of contributions for this time period.

4. The following is a series of questions based upon information covered in Chapter 6 of your textbook. When the question asks you to "explain," express the mathematical idea in writing. When the question asks you to "calculate," choose the appropriate mathematical procedure, and solve.
   1. If both trade and cash discounts are offered, explain which discount should be deducted first and why.
   2. Explain the steps taken to determine the discount on an invoice total when the shipping and insurance charges are reflected in the total.
   3. KAT Manufacturing sold Ace Hardware five sets of patio furniture with a $6750 list price. KAT offered a 5/10/20 chain discount. Calculate the net cost and trade discount amount. Round to the nearest cent.

Include the date in your answers.

© Copyright 2000 Addison Wesley Longman, Inc.