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012011 econ walmart 50m

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012011 econ walmart 50m

  1. 1. DRAW A LINE SEPARATING TODAY & YESTERDAY 1) Write: Date: 01/20/11 , Topic: Walmart 2) Next line, write “ Opener #10 ” and then: 1) Write 1 high + 1 low in last 24 hours 2) Rate your understanding of yesterday: lost < 1-5 > too easy (3 is perfect) 3) Respond to the Opener by writing at least 1 sentences about : Your opinions/thoughts OR/AND Questions sparked by the clip OR/AND Summary of the clip OR/AND Announcements: None
  2. 2. SIT IN THE SAME SEAT AS YESTERDAY
  3. 3. Agenda 1) Walmart Case Study End Goal, you will be able to… 1) What influences demand + supply Reminder 1) Find & complete your 4 news pods
  4. 4. Mr. Chiang’s Year Long Class Simulation 100 Points (final equity relative to the class) Default Job: Unemployed ($300/wk unemp check) Current Equity: $500 cash, $500 in your bank 2x$100, 2x$50, 5x$20, 5x$10, 8x$5, 10x$1 Available Jobs: 8 Banker ($2000/wk) BofA-2, Wells Fargo-2, Chase-2, Citi-2 Job Description: Run the bank accounts Job Requirement: Fri: Brunch each week 1 Politician ($1000/wk) Job Description: Set weekly tax rates Job Requirement: Mon: Brunch each week 3 Cleaners ($500/wk)
  5. 5. Review 1) Law of Demand : Price lower, buy more of it. Price is higher, buy less of it ( not about wanting, about really buying )
  6. 6. 2) D emand Curve : Demand shown as a line graph, dots should how much you buy at that dot (goes down ) (s UP ply curve: is a “ S ” and goes up ) (It usually isn’t a curve or a straight line)
  7. 7. Journ #9a , Title “ Review ” 1) Graph 1: Draw a Standard Supply and Demand Chart ( to look like a X ). Write in $ and # labels, and label demand line “ D1 ,” and Supply Line “ S1 .” 2) Alter Standard Demand, Product Found Toxic , label new demand line “D2” 3) Alter Standard Demand: Product Found to Help Prevent Cancer , label “D3” D1, D2, D3 all on the same chart.
  8. 8. Notes #9a , Title: “ Supply ” 1) Supply : How many biz will produce + sell at a price ( given cost constant ) 2) Profit Margin : Difference between cost to make and selling price. Using Demand Terminology in Supply : Individual Supply Schedule : What a single supplier is willing to produce at each price Market Supply : Adding together what all the suppliers are willing to produce at each price Change in Supply Quantity : Finding different dots up + down on a line ( line does not move ). Change in Supply (Overall) : Moving a line left or line right. The SITUATION has changed to make + - produced at all prices ( profit margin has changed at all pricing points )
  9. 9. Company 1 Company 2 Cost Profits
  10. 10. Country 1 Country 2 Cost Profits
  11. 12. Holding Back Supply Despite Demand: Keeping Exclusivity/Collectible Status
  12. 13. 3) Productivity : How much we can produce. ( Being more productive frees up our time to be: a) even more productive/more supply OR b) leisurely)
  13. 14. 4) Things that Change Profit Margin, Thereby Change Supply at All Pricing Points : a) Cost of Input Changes: Cheaper or more expensive raw materials ( include wages )
  14. 15. a) Cost of Input Changes: Cheaper or more expensive raw materials ( include wages )
  15. 16. US biz are finding it hard to make a profit operating in the USA, should we get rid of min. wage ($8)? ( Since labor is the largest resource cost for biz )
  16. 17. <ul><li>JOBS-YES MIN WAGE </li></ul><ul><li>Every worker deserves a wage to survive. </li></ul><ul><li>Low wage workers don’t have the power to fight for higher wages w/o gov help. </li></ul><ul><li>3) Companies can afford it by taking in less profits. </li></ul><ul><li>COST-NO MIM WAGE </li></ul><ul><li>Businesses can’t afford to stay in business or can’t hire as many workers. </li></ul><ul><li>Some jobs don’t deserve $8. </li></ul><ul><li>3) Shoppers deserve lower prices. It benefits more people </li></ul>1 2 3 4 5
  17. 18. Journal #20 , “ Debate ” 1) Read the 2 sides, choose 1 side, and write which you choose and explain why . 2) Then write down what your partner thinks ( include their name at the end ). 1 2 3 4 5 CON: Con Side 1) PRO: Pro Side 1)
  18. 19. Notes #9b , Title: “ Supply ” a2) Controlling Cost of Inputs i) Find cheaper workers. ii) Negotiate lower/long term prices iii) Buy bulk supplies when price low iv) Produce own supplies (possibly inefficient, hurt more) v) Create a way to use other supplies (substitutes).
  19. 20. China USA Cost Profits
  20. 21. b) Productivity Changes : Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!
  21. 22. b) Productivity Changes : Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!
  22. 23. b) Productivity Changes : Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!
  23. 24. Firing/Lower Wages Cuts Cost Productivity Gains Can Also Cut Cost Cost Profits
  24. 25. b) Productivity Changes : Workers working harder or slower to produce more or less.
  25. 26. b2) Ways to Increase Worker Productivity i) Pay more + hire better. ii) Make workers feel like a family. iii) Train workers + give feedback. iv) Continue Improvement (CI): Give workers power to improve their job v) Performance Pay
  26. 27. c) Technology Changes : Inventions that make work faster.
  27. 28. Clip Prep: This commercial is a satire of the how workers are being replaced with robots, to increase productivity.
  28. 29. c) Technology Changes : Inventions that make work faster.
  29. 30. If the technology is available, should we earn more profits and lower prices for shoppers AND fire the workers? ( Since labor is the largest resource cost for biz )
  30. 31. <ul><li>SAVE JOBS </li></ul><ul><li>If everyone replaces jobs with tech, what jobs will be left. </li></ul><ul><li>2) Companies can afford it by taking in less profits. </li></ul><ul><li>MORE TECH </li></ul><ul><li>If you don’t, others will, you will go out of business. </li></ul><ul><li>2) Shoppers deserve lower prices. It benefits more people </li></ul>1 2 3 4 5
  31. 32. Journal #20 , “ Debate ” 1) Read the 2 sides, choose 1 side, and write which you choose and explain why . 2) Then write down what your partner thinks ( include their name at the end ). 1 2 3 4 5 CON: Con Side 1) PRO: Pro Side 1)
  32. 33. Company 1 Company 2 Cost Profits
  33. 34. Work #9c , Title “ Supply Review ” Work with your group: CUPCAKES Come up examples for each category 1) Input Cost Savings 2) Worker Productivity Increases 3) Technology Implenetation 4) Examine the industry state of 1-3), in other words, is there potential productivity savings that aren’t being commonly used ( which means a future cupcake company can compete !)
  34. 35. Team Quiz (10 Points) Discuss the following questions with your group. Make sure everyone understands how to answer it. Once the quiz paper is passed out, everyone individually writes their own responses. No talking once we start writing. 1 paper will be graded from each group ( 10 points ). Prepare now. Ask Mr. Chiang only if no one in your team knows. When writing, use sentences! 1) If banks offer more loans, what happens to prices at Target? 2) If the price of oil goes up, what happens to the price of cereal? 3) If an outsourcing customer service business pay its workers $1/hr, and is paid $2 a call, that currently takes 1 hr, what is its profit margin? (assuming no other cost) 4) If because of inflation, workers now demand $2/hr, explain how the business can maintain its profit margin?
  35. 40. Notes #10a , Title: “ Productivity Review Notes ” 1) Machines and/or sending jobs overseas lowers costs Equal more money for biz and/or lower prices for shoppers Biz or shoppers spend that new found wealth, new jobs created Person who lost job in step 1 may not benefit.
  36. 41. Notes #10a , Title: “ Demand ” 2) Walmart : Largest biz, Revenue: $400 billion, Net income: $10 billion, 2 million workers. Strategy: use size to pressure suppliers to lower cost, use IT to control waste, low wage workers Pros: lowers cost for shoppers (lowers inflation) Cons: suppliers send jobs overseas, encourages consumption, kills small stores
  37. 43. Journal #10a , Title “ Wal-Mart Case Study ” 1) Copy Source Title: CNBC 2…) Discuss questions on the board with a partner. Summarize your discussion ( include their name at the end ). Remember participation points are deducted if off task. 5 Reading/Film Qs Come From These Journal Sections Time Bookmark: 28:30, 47:50, 1:28
  38. 44. Homework: 1) Study today’s notes + work sections for a possible workbook quiz . 2) Pick and listen to your 4 news podcast by next Monday. Workbook Check: If your name is called, drop off your workbook with Mr. Chiang ( if requested, points lost if your workbook is not turned in )

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