Friday, September 21, 2007

Kroger as a hypothetical example

I will not be continuing my Creationism posts today. I do plan to return to them soon.

Then, I plan to answer the response about Iraq. I am sorry for the change in plans. Plans, in reality, often are altered for one reason or another. “The best laid plans … often go astray.” Thank you for your understanding and patience.

How many unborn toddlers were murdered today because of the humanistic, paganish, barbaric decisions of the United States Supreme Court?

Stop the
Murder of

“Anyone, then, who knows the good he ought to do and doesn’t do it, sins.” James 4: 17 (NIV)

I am not saying that this is true. It is a hypothetical example of what is possible. I am using Kroger, in part, as a hypothetical example because it is a large retailer and offers weekly sales of some of its products. According to Encarta, Kroger in 2005 was the 24th largest company in the United States based upon revenue collected.

Companies usually offer sale prices for a couple of reasons. One is to increase the number of people who purchase products from the store or, at least, to keep their current customer base. Sometimes, a product is sold below cost with the hope that the consumer will purchase other products not on sell and thus increase total revenue. Another reason is to encourage consumers to try a product that they would not normally purchase with the hope of changing their purchasing habits.

Let’s pretend that Kroger advertises a product that is normally sold for $3 for a sales price of $2 for one week along with all the other sale prices for that week. Let’s further pretend that because of the sale price reduction of ⅓, an additional 20 people per day purchase the product who otherwise would not.

However, for whatever reason, Kroger does not change the price of the product in the computer. The price under the product in the aisle of the store says “Sale Price $2” but the computer still has the price as $3. Therefore, each time the product is sold the consumer believes he is paying $2 per product purchased but he is actually paying the original price of $3 per product. He is paying $1 more than he thought he was.

Let’s also pretend that the consumer DOES NOT CHECK his sales receipt and therefore never realizes that he is paying the full, regular price of $3 per item. Let’s also pretend that Kroger has 10,000 stores located within the United States and the same occurrence is happening in each of the 10,000 stores each day. Let’s also pretend that this happens every day of the year except with a different product each week.

What would be the results of such a pricing “error” for the company? Here is the math:

$1 more paid for each purchase of the product by unsuspecting customers who trust Kroger, or whatever store, to accurately post prices and to charge the consumer the posted price.

20 additional purchases each day the product is on sale.

Each store would collect an extra, unwarranted $20 a day in sales.

$20 additional money collected by 10,000 stores would result in an additional $200,000 collected each day because of one misrepresented purchase price.

$200,000 additional money collected each day over the course of a 365 day year would result in an additional $73,000,000 collected based upon our hypothetical example for one pricing error of $1 per item.

That’s $73,000,000 more over the course of one year for one pricing error occurring throughout the year.

As Everett M. Dirksen, a one time Senator from Illinois, has been quoted as saying, “A million here, a million there, it soon adds up to real money!”


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