tag:blogger.com,1999:blog-8781383461061929571.post3208514944966636234..comments2024-03-14T09:08:19.035-04:00Comments on OR in an OB World: The Curse of Basic Numeracy (or Why I Keep Gaining Weight)Paul A. Rubinhttp://www.blogger.com/profile/05801891157261357482noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8781383461061929571.post-71477359345206875482011-08-02T20:16:19.576-04:002011-08-02T20:16:19.576-04:00I routinely see diseconomies of scale at grocery s...I routinely see diseconomies of scale at grocery stores here in South Florida (Publix and Whole Foods). My wife and I have learned from it and we always double check the price per ounce. Fortunately, most stores these days pre-calculate that for you and put the $/oz on the price tag.<br /><br />@Laura: I did not know that this tax differentiation existed. I wonder if this is true everywhere or if it depends on state laws. It started me thinking about creating an optimization model: what kinds of bundles/promotions to create to take advantage of tax laws? If there's enough complexity it might be worth doing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8781383461061929571.post-1569195840061089702011-08-02T14:18:59.050-04:002011-08-02T14:18:59.050-04:00@Laura: Thanks for the comment. I not infrequentl...@Laura: Thanks for the comment. I not infrequently see products in the local supermarket (Kroger) where there is a diseconomy of scale for going to a larger package relative to the equivalent number of smaller packages. In some cases, maybe they're trying to get rid of excess inventory of the smaller size; but I think I see it too often for that, and particularly in nonperishable items with fairly high turnover and low holding cost (like toilet paper).<br /><br />I suspect some of this is further proof that our national angst over K-12 mathematics education is warranted.<br /><br />Re Dunkin' Donuts, when I was a kid (and prices were considerably lower), we had a sales tax (5% I think) that was not collected if it came out to less than one cent. At the local ice cream stand, people would come in with a carload of kids and order one cone, then one cone, then one cone ... to avoid paying any sales tax. Management tried to put a stop to the practice, and at least a few customers asserted their Constitutional right to place as many orders as they wanted. (This was in NY, where people tend to assert their rights rather loudly.)Paul A. Rubinhttps://www.blogger.com/profile/05801891157261357482noreply@blogger.comtag:blogger.com,1999:blog-8781383461061929571.post-50878288993530571992011-08-02T13:15:16.841-04:002011-08-02T13:15:16.841-04:00Fantastic post! I think about these things, too. C...Fantastic post! I think about these things, too. Coffee often has non-monotonically decreasing marginal costs that are (sorry for the double negative). I also find that irritating.<br /><br />My other observations:<br />- coffee places usually charge a flat rate of about $0.60 to make an espresso drink with soy milk. That just encourages me to order the biggest possible size (then I usually switch to decaf to avoid a sizable jolt).<br />- I was in a major taco chain (Qdoba?) where buying three single tacos was cheaper than buying a three pack.<br />- some Dunkin' Donuts charge $0.99 per donut and $5.99 per half a dozen donuts. This made no sense to me until I learned that a single donut is taxed at the restaurant rate (11% in VA) whereas half a dozen donuts are taxed at the grocery rate (2%), which means that buying half a dozen donuts comes out cheaper than buying six single donuts. They are taxed at different rates, since people presumably cannot eat six donuts in a single meal. I won't comment on that. I go to DD for the coffee so their donut prices are irrelevant.<br /><br />-LauraAnonymousnoreply@blogger.com