trade or functional discounts are offered by manufacturers to
Discounts and allowances Trade discounts, also called functional discounts, are payments to distribution channel members for performing some function. Examples of these functions are warehousing and shelf stocking. Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked. Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).
Delayed differentiation Delayed differentiation or Postponement is a concept in supply chain management where the manufacturing process starts by making a generic or family product that is later differentiated into a specific end-product[1]. This is a widely used method, especially in industries with high demand uncertainty, and can be effectively used to address the final demand even if forecasts cannot be improved.