@sdelsad/commodity-desk-daily 1.0.70 → 1.0.71
This diff represents the content of publicly available package versions that have been released to one of the supported registries. The information contained in this diff is provided for informational purposes only and reflects changes between package versions as they appear in their respective public registries.
- package/ep23.md +6 -4
- package/package.json +1 -1
package/ep23.md
CHANGED
|
@@ -71,7 +71,7 @@ Ukraine's farm unions spent the same week asking their government for two things
|
|
|
71
71
|
|
|
72
72
|
**Q4.** Ten houses bid a milling wheat tender and you win it. Before you look at a single one of your own cost lines, what does the fact of winning tell you about your cost estimate?
|
|
73
73
|
|
|
74
|
-
**Q5.** Conversion drill. A
|
|
74
|
+
**Q5.** Conversion drill. A rice mill bids $352 per tonne delivered. The grower it is bidding against quotes in hundredweight. What is that bid in dollars per cwt?
|
|
75
75
|
|
|
76
76
|
# SOLUTIONS (spoilers)
|
|
77
77
|
|
|
@@ -111,11 +111,13 @@ This is the winner's curse, and it needs no information about your own numbers a
|
|
|
111
111
|
|
|
112
112
|
The practical consequence is that the information arrives too late to be useful unless you priced for it in advance. That is bid shading: bidding deliberately below your own best estimate of value by roughly the expected size of the curse, so that winning is informative rather than merely expensive. And it is why a disciplined tender desk expects to lose most of what it enters, and treats a high win rate as a warning rather than a result.
|
|
113
113
|
|
|
114
|
-
**A5.**
|
|
114
|
+
**A5.** $15.96 per cwt.
|
|
115
115
|
|
|
116
|
-
|
|
116
|
+
There are 22.05 hundredweight in a tonne, and this is the direction that gets inverted. Going from dollars per cwt to dollars per tonne you multiply; coming back the other way you divide. So 352 ÷ 22.05 = $15.96/cwt.
|
|
117
117
|
|
|
118
|
-
The
|
|
118
|
+
The mental check is worth doing here, because this is the harder direction and the approximation is good. Dividing by 22 is dividing by 20 and then taking off about nine percent: 352 ÷ 20 = 17.60, less nine percent is 16.02. Four cents from the exact answer, arrived at without a calculator while somebody is waiting on the phone.
|
|
119
|
+
|
|
120
|
+
The reason it matters is that the two halves of the same rice trade quote in different units. The grower and the local elevator work in dollars per hundredweight; the exporter selling into West Africa or the Gulf works in dollars per tonne. Getting the direction backwards turns $15.96 into $7,762 and the error is large enough that it announces itself — which is exactly why the dangerous version is a near-miss, not a wild one.
|
|
119
121
|
|
|
120
122
|
# The written edition
|
|
121
123
|
|