Friday, September 28, 2007

expensive ice

I have a math problem:

Assume both 1) and 2) are 16 ounce beverages.

1) hot coffee = $1.80
2) iced coffee = $2.30


Let me rephrase:
1) coffee + paper cup = $1.80
2) coffee + plastic cup + ice = $2.30


This means that
plastic cup + ice - paper cup = $2.30 - $1.80 = $0.50

In English, the cost of ice and the cost of using a plastic cup instead of paper is $0.50. But wait, there's more: there is less coffee in the iced coffee since ice replaces roughly 50% of it!

Okay, so this means:
1) 1.0*coffee + paper cup = $1.80
2) 0.5*coffee + plastic cup + ice = $2.30


Thus:
plastic cup + ice = $0.50 + 0.5*coffee


Lets go out on a limb and say that the paper cup costs $0.80, which is probably an extreme upper bound. This makes the equations a bit easier:

1) 1.0*coffee + $0.80 = $1.80 :: 1.0*coffee = $1.00
2) 0.5*coffee + plastic cup + ice = $2.30
  :: $0.50 + plastic cup + ice = $2.30
  :: plastic cup + ice = $1.80


This is friggin' ridiculous. There's no way that a cup costs more than a dollar, you can get a pack of 1000 of the exact cup I'm drinking from for $120; that's twelve cents each. That means that the ice must cost $1.68!!! There's no way it costs that much to make ice, especially when you use it in frapp├ęs all day and make it in bulk.

I hope the owner of Java Haute reads this.

2 comments:

Logan Bowers said...

Goods are priced based on their value, not their cost. The fact that the margin is much higher implies that regular coffee is a poor substitute for a customer that prefers iced coffee.

Sid Stamm said...

You have a valid point, but one thing baffled me: when I asked about the steep cost, the employee told me to ask for the iced coffee in a paper (not plastic) cup the next time, and I would be charged the regular coffee price. This suggested to me that the cost was, indeed, tied to the cost if a cup... Or perhaps the saying "fool me once, shame on me, fool me again, shame on you" applies.