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

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.


Anonymous 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.