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DanS
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Kickball Capital of the World
Jan 1970
time: 00:30
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Sorry to keep jumping around on topics, but I found this FT article interesting about regulating drug prices and how the American consumer is getting shafted by all of these central planning types in Europe and Canada.
http://news.ft.com/servlet/ContentS...p=1012571727088
Overall, I agree with the head of the FDA. Many European countries are joined in a pact of freeloaders. However, I don't think the answer is for the US to emulate these central planners. Otherwise, everybody would have fewer good new drugs. It makes sense that the drug companies would want to be most involved and spend most of their R&D money in their overwhelmingly biggest market, but I wonder how far that goes.
Last edited by DanS on 26-09-2003 at 09:38
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HershOstropoler
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quote:
Originally posted by TCO
So if a **** in France costs 100 Euros. And a **** in the US costs $200 and a Euro is worth $1.2, then the French **** is worth $120. It's just too easy to get laid there. Like ice in the arctic. |
That just means a **** is more expensive in the US due to structural rigidities.
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HershOstropoler
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You like puritanism, or what? Pervert.
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Ecthy
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Zhonghuà Rénmín Gònghéguó
Mar 2000
time: 06:30
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quote:
Originally posted by Ted Striker
**** |
I second this.
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:30
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I have a meandering multi-disciplinary question. Please correct anything you see that doesn't make sense as well as answering the questions (as I'm just using common sense assumptions about how some of this stuff works).
I was stunned to hear Michael Dell say that Dell has an inventory ratio of over 100. Its financials indicate that Dell has been able to double its inventory ratio in the last 5 years. Stockpoint says that the S&P average is around 10, which seems about right--you sell out your inventory every month or so on average. People pay their rent every month, etc. Anyway, Michael Dell's point was that the rise of the information age was less important from a retail perspective (for instance, ordering something on the web) than from a business process perspective (more efficiently getting the product to the shelves).
By comparison, Wal-Mart has an inventory ratio of 7.5 or so. Kroger, the biggest US supermarketeer, has an inventory ratio of 9 or so. Now I was led to believe that the supermarketeer had low margins, but made their money by turning over their inventory quickly and having high volumes. But doesn't this indicate that Dell is woefully out-supermarketing the supermarketeers? Also, as a basic matter, doesn't this result in Dell using its capital most effectively? I don't know of a company with a higher inventory ratio (although I'm guess at least one exists). How does this effectiveness show up in the marketplace? Is it just that Dell has lower capital costs? How do we quantify the advantage this gives Dell over its competitors?
Now another part of this question. In macroeconomic terms, I think the equation is something like money supply x velocity = economic output. If the Dells of the world increase their inventory ratios, then that increases the economy's velocity. Money supply has been fairly easy in this recession, but as happens in all recessions, velocity decreases. Put simply, if the Dells of the world are able to increase their inventory ratios very healthily from boom time throughout a recession, wouldn't that indicate that the economy could move to the upside an awful lot, once the velocity in other parts of the economy pick back up?
Also, since the inventory ratio impacts the efficitiveness of the use of capital, wouldn't that impact capital productivity rather than labor productivity? If this is so, then wouldn't that indicate that once the speculative bubble of the late 90s wears off, the economy is on track for much higher capital productivity? Lastly, wouldn't the rise of the information age impact capital productivity to a higher degree than labor productivity.
As I discussed some time ago, the information age seems to have come only recently to US manufacturing. For instance, my brother-in-law who is a machinest at a Meritor truck axel plant keeps b&m-ing to me about how the new inventory control system they have sometimes stops the line because they don't have 50 cent bolts in stock. As an aside, ArvinMeritor has increased its inventory ratio from 9 to 13.5 in the last 5 years.
Last edited by DanS on 29-09-2003 at 00:20
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26-09-2003 04:08
Same thing with ****s, you have to pay for the greater difficulty in corrupting an American girl. 
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