012011 econ walmart 50m

DRAW A LINE SEPARATING TODAY & YESTERDAY1) Write: Date: 01/20/11, Topic: Walmart2) Next line, write “Opener #10” and then:

1) Write 1 high+1 low in last 24 hours2) 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

SIT IN THE SAME SEAT AS YESTERDAY

Agenda1) Walmart Case Study

End Goal, you will be able to…1) What influences demand + supply

Reminder1) Find & complete your 4 news pods

Mr. Chiang’s Year Long Class Simulation100 Points (final equity relative to the class)Default Job: Unemployed ($300/wk unemp check)Current Equity: $500 cash, $500 in your bank2x$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-2Job Description: Run the bank accountsJob Requirement: Fri: Brunch each week1 Politician ($1000/wk)Job Description: Set weekly tax ratesJob Requirement: Mon: Brunch each week3 Cleaners ($500/wk)

Review1) Law of Demand: Price lower, buy more of it.

Price is higher, buy less of it (not about wanting, about really buying)

2) Demand Curve: Demand shown as a line graph, dots should how much you buy at that dot(goes down)

(sUPply curve:is a “S” and goesup)

(It usually isn’t a curve or a straight line)

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.

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 priceMarket Supply: Adding together what all the suppliers

are willing to produce at each priceChange 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)

Company 1 Company 2

Cost

Profits

Country 1 Country 2

Cost

Profits

Holding Back Supply Despite Demand: Keeping Exclusivity/Collectible Status

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)

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)

a) Cost of Input Changes: Cheaper or more expensive raw materials (include wages)

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)

JOBS-YES MIN WAGE

2) Every worker deserves a wage to survive.

3) Low wage workers don’t have the power to fight for higher wages w/o gov help.

3) Companies can afford it by taking in less profits.

COST-NO MIM WAGE

2) Businesses can’t afford to stay in business or can’t hire as many workers.

3) Some jobs don’t deserve $8.

3) Shoppers deserve lower prices. It benefits more people

1 2 3 4 5

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 Side1)

PRO: Pro Side1)

Notes #9b, Title: “Supply” a2) Controlling Cost of Inputs

i) Find cheaper workers.ii) Negotiate lower/long term pricesiii) Buy bulk supplies when price lowiv) Produce own supplies

(possibly inefficient, hurt more)v) Create a way to use other supplies

(substitutes).

China USA

Cost

Profits

b) Productivity Changes: Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!

b) Productivity Changes: Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!

b) Productivity Changes: Workers working harder or slower to produce more or less. If you can’t pay less, you can make work more!

Firing/Lower Wages Cuts Cost

Productivity GainsCan Also Cut Cost

Cost

Profits

b) Productivity Changes: Workers working harder or slower to produce more or less.

b2) Ways to Increase Worker Productivityi) 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

c) Technology Changes: Inventions that make work faster.

Clip Prep: This commercial is a satire of the how workers are being replaced with robots, to increase productivity.

c) Technology Changes: Inventions that make work faster.

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)

SAVE JOBS

3) If everyone replaces jobs with tech, what jobs will be left.

2) Companies can afford it by taking in less profits.

MORE TECH

3) If you don’t, others will, you will go out of business.

2) Shoppers deserve lower prices. It benefits more people

1 2 3 4 5

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 Side1)

PRO: Pro Side1)

Company 1 Company 2

Cost

Profits

Work #9c, Title “Supply Review”Work with your group: CUPCAKESCome up examples for each category1) Input Cost Savings2) Worker Productivity Increases3) Technology Implenetation4) 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!)

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?

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.

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 workersPros: lowers cost for shoppers (lowers inflation)Cons: suppliers send jobs overseas, encourages

consumption, kills small stores

Journal #10a, Title “Wal-Mart Case Study”

1) Copy Source Title: CNBC2…) 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 SectionsTime Bookmark: 28:30, 47:50, 1:28

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)