8 



DEPAETMENT CIECULAE 413, U. S. DEPT. OF AGEICULTUEE 



RELATION OF NUMBER OF ALLOWANCES AND REJECTIONS 



TO PRICE 



Shippers generally believe that there is a strong tendency on the 

 part of buyers to reject or ask allowances on f. o. b. purchases when 

 the condition of the market makes it seem likely that the buyer will 

 suffer a loss or at least will not realize a profit on the transaction. 



On the other hand, buyers claim that they often accept shipments 

 which fail to meet the terms of the sale contract when they can do so 

 without sustaining a loss. But they deny that they are under 

 obligation to accept shipments which arrive in poor condition, even 

 though they have not expressly stipulated ''good condition" in the 

 sales contract. 



A study was made to determine what relation existed between 

 price fluctuations and the number of cars rejected. As a first step 

 in this study the weekly car-lot shipments for the State of Washington 

 and the number of cars rejected weekly were compared. Both the 

 shipments and rejections were expressed in percentage of the season's 

 totals and were then plotted. (Figs. 3, 4, and 5.) For 1923-24 and 



9 16 23 30 7 I'f 21 28 f II 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 3 10 17 2t 31 

 SEPT. OCT. NOV. DEC. JAN.- FEB. MAR. 



1922 1923 



It 21 28 5 12 13 26 

 APR. MAY 



Fig. 3.— Relation of number of rejections per week to total Washington shipments per week, Wash- 

 ington State bo.xed apples, 1922-23. The number of cars rejected weekly in 1922-23 did not vary 

 in direct proportion to the number of cars shipped. Price changes and condition of fruit had 

 considerable influence on the number of rejections during the season 



1924-25 it appeared that the number of rejections varied in rather 

 close proportion with the number of cars shipped. (Figs. 4 and 5.) 

 There was, however, some tendency for the number of rejections 

 relative to shipments to increase as the seasons progressed. 



For 1922-23, Figure 3 shows that factors other than the number 

 of cars shipped must have influenced the number of rejections. In 

 this year the number of rejections relative to shipments increased 

 in the latter part of the season. This was a year in which prices 

 had a tendency to decline until about the 1st of March, after which 

 jobbing prices improved somewhat. In the other two years, jobbing 

 prices, after declining sharply at the beginning of the seasons, remained 

 at near the low point until December, when an upward trend began 

 and continued through the remainder of the season. 



The relation of frequency of rejections to the trend of f . o. b. and 

 jobbing prices is shown graphically in Figures 6, 7, and 8. In these 

 figures the zero line represents the average percentage of shipments 

 rejected each week during the period. It was figured that a little 



