[geeks] geeks Digest, Vol 86, Issue 11

[Lionel Peterson]

On Jan 20, 2010, at 8:12 PM, Jonathan Patschke <jp at celestrion.net>  
wrote:

> In order to answer your question, let me give you a concrete example  
> from
> back when I worked for a state agency.  My agency had need for a large
> quantity of some supply, but did not need it for several months (a  
> month
> into the next accounting period).  The vendor offered a per-unit price
> break in a quantity beyond what we could afford with the remaining  
> budget
> in the current accounting period.  In order to keep the budget the  
> same,
> we had to buy what we could afford and buy the rest later.  If we were
> permitted to save money across accounting periods, we could've  
> stashed the
> cash until the next budget distribution, bought the larger quantity  
> all at
> once, and ended up spending LESS money overall.

What makes you think a private corporation would have done anything  
differently? A one-time discount can't be planned for, and if the  
Gov't agency had borrowed against monies due in the next quarter to  
realize a discount on a major purchase, that money would have come at  
a cost. In your example I assume the discount was a time-limited offer  
(it only existed in this acct period, not later one, so you'd have had  
to borrow money not save it). Also there are storage costs to be  
considered if the item isn't needed for a while.

Why was there anymoney available for this purchase when it wasn't  
needed for several months, sounds like they really didn't plan their  
budget 'burn rate' correctly...

Lionel