The New Math

Had a difficult time with the title for this blog, but thought it might be appropriate.

Also, I have been told some of my Blogs are difficult to read so I will try to keep this one simple.

In today's newspaper, the headline goes... "Food costs expected to take a bigger bite". Without going into all the details, I will just skip to the last line of that story... It reads... "Some companies say they will not raise prices, but they will change their packaging. That means you won't pay more but you will get less".

Now, can someone explain to me how that is not a raise in price? Do we not pay for the contents of the box (as well as the box).

As an example, let's take a simple box of cereal, and for arguments sake, let's say the box of cereal contains 20 oz, and at least for today sells at $3.00. Now, I don't know about you, but I thought that we paid "per content", or in this case price per ounce.

So, that means our box of cereal, using the complex equation of "cost per oz = Amount / Qty", means our cost will be $0.15 per ounce ($3.00 / 20). So far not to difficult - as Sherlock Holmes would say... "Elementary my dear Watson".

Now, in order to "not raise prices", the contents of the box is reduced to 15 oz. Using the "New Math" (get it... that is how I got the title), we have $3.00 / 15 = $0.20 per ounce. In this case it is costing us $0.05 MORE for LESS. And since we all love Percentage, it translates into a 33% INCREASE ($0.05 / $0.15) in price. $0.20 is $0.05 greater than $0.15 right? (See how the "New Math" works... tricky... yes?) Once again... "Elementary my dear Watson".

Now to coin the infamous Obama quote "Yes we can... But".

 But... In this case is the "New Math" may be slightly flawed. Let me explain.

If you are like me you do not eat the box that the cereal came in, so the real cost of the cereal is the contents AND the packaging. So let's see how the "real" cost works out. Let's assume (yes... I know... bad to do, but let's do it anyway) that the cost for the package is $0.50, so that leaves $2.50 for the contents, Now, remember since "companies will not raise prices", you will still be paying $3.00 for the box of cereal, but the real cost (for the contents) is $0.13 per ounce ($2.50 / 20). However, since you are still paying $3.00 for the "New" box (15 oz), which still works out to $0.20 per oz ($3.00 / 15). So the real difference is $0.08 MORE for the cereal, NOT $0.05 as the mfg would have us believe. And on a percent bases the cereal is now 60% higher, not 33% as the mfg would have us to believe (He-he... more "New Math").

So... now you have it. Now you can see how you will not be paying more for the box of cereal... right? (Sarcasm intended).

And... Hope this helps you to better understand the "New Math".

BUT... (Once more for the "BIG O") Please do not get discouraged by all this, for all the bad, there is also all the good. I will explain.

We all know that obesity is one of the greatest problems we have in the good old USA.

Let's take our box of cereal. It works out that there are about 100 calories per serving, and there is roughly one ounce per serving, so our 20 oz box of cereal would contain 2000 calories (100 calories x 20 servings). For all you who follow this sort of thing, you will notice that 2000 calories is the right around the recommended total daily caloric intake. In other words if you consume the entire contents of our 20 oz box of cereal for breakfast, then that is all you can have for the rest of the day. Now, with the "New" box of 15 Oz, you can still consume the entire contents which in this case are only 1500 calories.

So... see the advantage here. You should be able to recognize that you now have room for 500 more calories, so in reality, yes, you did not pay more, and you really did get less. But... (This "O" stuff is getting old) You now have room for that extra 500 calories, so now you can run down and get yourself the Big Mac for lunch, and maybe you will have enough left over that you can "Super Size" it.

I can hardly wait for the day I can go to grocery, and pick up an EMPTY box of cereal for $3.00. Then I can chomp down 4 Big Mac's... maybe one for breakfast, one for lunch, and the "Super Size" for dinner.

Simple... Right?

Just Say'n