Compute final price after sequential trade discounts (20% + 10% + 5%). Each applies to the already-reduced price, so the effective discount is less than the sum.
Chain (or ladder) discounts stack — 20% + 10% + 5% — but they don't add up to 35%. Each discount applies to the price left after the previous one, so the real effective discount is always less than the sum.
Distributors negotiate in these chains constantly. Knowing the true landed price after a ladder, and the single effective rate it equals, keeps you from over-promising downstream.
₹1,000 list with 20% + 10% + 5%: ₹1,000 → ₹800 → ₹720 → ₹684. That's a 31.6% effective discount, not the 35% the numbers seem to add to.
Because each one applies to a smaller base than the last. 10% of ₹800 is less than 10% of ₹1,000, so stacked discounts always work out lower than their sum.
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