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Sir. Loin

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sweetbasil

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"For those of you who have an interest in this subject, there is one more fact you need to understand, and that is the “ Law Of Supply And Demand “, which controls SP (sale price ).




Law Of Supply And Demand
What Does Law Of Supply And Demand Mean?
Quote:
A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply and demand defines the effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be.

Source: http://www.investopedia.com/terms/l/law-of-supply-demand.asp#axzz1e58vfRYs

Now if you understand ( C + P = SP ) and the Law Of Supply And Demand which controls SP. you are well on your way to being a critical thinker.

With this knowledge you can predict the future and become rich, even in the cattle business.
SL"

Sir. Loin,

Let me warn you, I am not a "critical thinker" (just an average thinker).

I believe the above equation defines price determination of a product. One can not only use the given components above to calculate the selling price, the profit, but also the mark-up, and gross margin in order to maximize profit.

Please feel free to correct me and teach me if I am wrong. I noticed that you mentioned that LP is

"A word of caution:
When Linear Programming, or any other theory, comes in conflict with Capitalism, capitalism will always win and linear programming etc will always lose.
History has proven that.
If you doubt it, how do you explain Americans accomplishing in about 200 years what the rest of the world was incapable of accomplishing in over 2,000 years?
Here are some of America’s best examples of failed non capitalistic programs"

Linear programming is not a "theory" maybe you have a different definition of linear programming than I do... Linear programming is a "linear optimization" method that can be use to achieve the best possible outcome..

For example:
Suppose that company X stocks bulk amounts of four types of feeds that it can mix to meet specific customer's orders. Suppose there are four feeds, their composition of corn, grain, and minerals, and the cost per pound of each nutrient is given:

Nutrient Feed 1 Feed 2 Feed 3 Feed 4
X 30% 5% 20% 10%
Y 10% 30% 15% 10%
Z 20% 20% 20% 30%
Cost per lb $0.20 $0.35 $0.40 $0.15

Now suppose that company X just received an order from its largest customer (Ms. Bucket) for 5000 pounds of feed. If Ms. Bucket wants this feed to contain at least 20% of nutrient X, 15% of nutrient Y, and 15% of nutrient Z. The company now wants to know how it should fulfill this order at the lowest costs.

The goal is to define all of the components of this LP problem to create a model in excel to find out exact mix of nutrients that will result in the lowest cost.

The above is just a basic example that can be done by hand and using a simple program like excel; I am aware now that there are many programs available in the market that are used in agriculture that are capable of solving these types of problems etc. My limited understanding of LP can only help me question a result and have an understanding of what an optimization program is doing when I entered a given set of constraints while trying to solve such problems.


How is a mathematical model like LP interfering with capitalism? If mathematical models like LP can help a firm lower cost and/or maximize the allocation of its resources which can lead to an increase in efficiency and profits, how could this "... come into conflict with capitalism"?

I personally think that the "...failed non capitalistic programs" you mentioned are due to the lack of implementation of tools like LP models or Six Sigma methodologies that could help government find excessive waste in the current system; instead, our government keeps spending more and creating a bigger system without fully maximizing the allocation of the resources currently in the system.

Lastly, if one can become rich by understanding the fundamental laws of supply and demand, why don't we have more rich ranchers/farmers (my former economic teacher is far from being rich, and he lives by these laws)? Could you elaborate on how you arrived to this conclusion?

SB
 

TexasBred

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jodywy said:
the speculator and emotion will shift the market but Supply and demand will work back in after the spikes and dips.

True on the cash market but on anything where futures are available the influence of the speculator creates a market with huge spikes and dips which has nothing really to do with supply and demand other than someone is buying or selling a contract they have never even funded.
 

Sir Loin

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SB,

Re:
I believe the above equation defines price determination of a product.
Yes, but not totally, as there are variables to be considered, such as the law of supply and demand and the psychological demographics of people. ( AKA sheeple )

Re:
One can not only use the given components above to calculate the selling price, the profit, but also the mark-up, and gross margin in order to maximize profit.
Again true, but you are making it harder to understand then it really is.
“ profit, mark-up, gross, maximize profit “ are all somewhat synonymous.

Re:
Please feel free to correct me and teach me if I am wrong.
You’re not wrong, but I don’t think you are seeing things clearly yet.
C + P = SP and the law of supply and demand are cast in stone and are the very foundation of capitalism and capitalism is the foundation that made America great.
Now you can add to that, but you can not subtract anything from that.
A government subsidy violates the very foundation of capitalism as it does not come from SP and it off sets C and increases P fictitiously. And the law of supply and demand is not usually in play to set SP.

No matter how well intended any government program is, it is doomed, just like a parasite that kills its host is doomed.
TBC
SL
 

Sir Loin

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SB,

Re:
Linear programming is not a "theory" maybe you have a different definition of linear programming than I do... Linear programming is a "linear optimization" method that can be use to achieve the best possible outcome..
See: http://www.businessdictionary.com/definition/linear-programming.html
By that definition, to me, it is a “theory” as there are variables and unknowns and with variables and unknowns you will get varying answers. Then there is the old saying “garbage in, garbage out” which also makes it a “theory”.


Re:
For example:
Snip
The goal is to define all of the components of this LP problem to create a model in excel to find out exact mix of nutrients that will result in the lowest cost.
I have no problem with mathematical computer modeling except for the fact that those who are usually doing the modeling have no experience in the field they are attempting model.

Re:
How is a mathematical model like LP interfering with capitalism?
It can accept government subsidies as income, whereas capitalism does not.

If mathematical models like LP can help a firm lower cost and/or maximize the allocation of its resources which can lead to an increase in efficiency and profits, how could this "... come into conflict with capitalism"?
There are no rules for LP, what goes in or doesn’t go into the equation is strictly up to the programmer who is operating at the direction of the person signing his pay check. (special interest groups )

Re:
I personally think that the "...failed non capitalistic programs" you mentioned are due to the lack of implementation of tools like LP models or Six Sigma methodologies that could help government find excessive waste in the current system; instead, our government keeps spending more and creating a bigger system without fully maximizing the allocation of the resources currently in the system.
You would think so, wouldn’t ya!
It’s not a question of “waste” it’s that the entire program was ill conceived and doomed from the get go! No computer program can solve that. And they will never admit it was a mistake and end it as they now have all those sheeple behind it or dependent on it.
And sheeples are votes, so we continue to spend billions each year on projects that will never ever work.


Re:
Lastly, if one can become rich by understanding the fundamental laws of supply and demand, why don't we have more rich ranchers/farmers (my former economic teacher is far from being rich, and he lives by these laws)? Could you elaborate on how you arrived to this conclusion?
Boy, that’s a dough one!
It’s been said a thousand different times and a thousand different ways, so I don’t know how I can say it any better. So here goes nothing!
It works! History has proven it! America, in about 200 years, became a world super power that can feed the world.
Very few people came to this country rich, but look at the masses now.
IMO, anyone who is not rich, or at least comfortable, has no one to blame except him/herself. The opportunity is there for everyone in America. All they have to do is take the bull by the horns and ride him out.

Do you know that if you could be right 51% of the time you could be a millionaire?
Now how smart do you have to be to not beat a coin toss?

All you have to do is be willing to take the chance and apply yourself and keep rolling those ( P ) profits back in to make more profit.
SL
 

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