December 2011

Loss-making venture


I will never make a good seller. Many many years ago when mangoes were quite cheap, I had thought it a good idea to sell mangoes. So, learning the tricks of the trade from a friend who was already in the mango selling business, I too launched my cart.

I kept my cart a little distance away from my friend's. Both of us sold only 30 mangoes each every day. My friend sold mangoes in twos. He sold two mangoes for one rupee (I told you mangoes were quite cheap in those days). By the way, few readers may not be familiar with the Indian currency, so for them I must point out that one rupee is equal to 100 paise. Henceforth, I will use paise instead of rupee.

Thus, my friend sold two mangoes for 100 paise. He, therefore, would collect 1500 paise at the end of the day after selling all his 30 mangoes.

I used to sell mangoes in threes and used to sell them cheaper - three mangoes for 100 paise. Thus, at the end of the day, I used to collect 1000 paise after selling all my 30 mangoes.

So, between the two us, we collected 25 rupees or 2500 paise each day.

One day my friend had some urgent work and could not go to the market. He requested me to sell his mangoes along mine on that day. He asked me to sell his mangoes at the same rate at which he sold them, that is two mangoes for 100 paise.

So, on that day, I had 60 mangoes to sell. I had promised to take my wife out to dinner that day and, therefore, had to reach home early. So, I decided to sell mangoes in lots of five so that the stock would soon get exhausted. I decided to sell five mangoes for 200 paise (three mangoes of mine for 100 paise plus two mangoes of my friend at 100 paise).

The strategy worked and I soon sold off the mangoes. But when I counted the cash, I was in for a surprise. I had collected only 2400 paise instead of the 2500 paise I was expecting. That is why I stated initially that I will never make a good seller. How did the earnings reduce although the selling price was the same? Can you figure this out?

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  • IIT-Kharagpur -
  • Indian Statistical Institute -
  • Indian Institute of Technology Madras -
  • Indian Institute of Management, Ahmedabad -
  • Indian Institute of Mass Commission -
  • IIT Bombay -
  • Indian School of Mines, Dhanbad -
  • Birla Institute of Technology, Ranchi -
  • Central Institute of Fisheries Nautical and Engineering Training -
  • Indian Institute of Information Technology, Allahabad (Deemed University) -
  • Central Marine Fisheries Research Institute, Kochi -
  • Tata Institute of Social Sciences, Mumbai -

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