Thursday, January 29, 2009

Introducing the PPI @ $1.57

The PPI is the Pizza Price Index, referring to this post from earlier in the month. It is indexed to the prices at my local Sam’s Club. Previous work was based on my cost estimates of the various elements of pizza which were:

Can of Crushed Tomatoes: $2.50
Five Pounds of Cheese: $12
720 Slices of Pepperoni: $8.86
Bulk Flour: $0.40/lb

Using these entering arguments, we came up with a pizza cost of $1.81. The wife sent me to Sam’s today to get more cheese, and I noted something startling: the price of cheese has gone down. I attribute this to the election of Barack Obama.

Part-skim was cheaper than whole milk, which I never have seen before. 5 pounds were $9.72 (a). This caused me to take a greater interest in the exact prices of the other ingredients, so here we go:

102 oz tomatoes: $2.43 (b)
25 lb flour: $9.78 (c)
720 Slice of Pepperoni: $7.76 (d) (this is also down from earlier this month, as I remember it. Must be the President)

Enter the PPI equation:

PPI = $0.01 + (a)/10 + ((b)/24)(2) + (c)/50 + (d)/40; or

PPI = $0.01 + $0.97 + $0.20 + $0.20 + $0.19

Which gives us a 29JAN09 PPI of $1.57. This is a more accurate, but definitely lower PPI than we had earlier in the month. We will track the PPI with time.

No comments: