Let’s try to guesstimate the price of one kg potato in India. There could be multiple ways to do it, but your aim should be to keep the “scope of error” to the minimum.
To estimate the price of one kg potato, you can take up any food item which has potato in it.
You can estimate the price by using french fries, Potato burger, etc.
I will choose the classic Indian snack to guessimate the price of a kg of potato
Why Samosa and why not french fries?
Advantage of choosing Samosa –
-We know the lowest price of Samosa i.e. Rs. 10 from any roadside vendor
– You can easy estimate the operational cost and profit of a roadside vendor
Disadvantages of French fries:-
– The price range of French fries is huge, which ranges from Rs. 50 to Rs. 200
– If you want to estimate the price of potato using French Fries from McDonalds then you need to estimate the operational cost.
We take guesstimates to reduce the error percentage and come to a close number.
– One samosa weighs 150 gms
– Price of one samosa is Rs. 10
We will divide the price of a samosa in 4 parts
– Cost Price of Potato
– Price of Flour, oil,spice and gas
– Labor cost(if any)
We can safely assume that flour will weigh around 30 gm in each samosa and the rest will be potato, so we have 120 gms of potato
Profit – 30% (You can take it in any range between 40 to 20% because it seems logical to expect such a high percentage of profit considering the fact that the Selling Price is on the lower side)
Profit – Rs. 3
Flour, oil, spices, and Gas – Flour and oil used by the road side vendors are generally of cheap quality, So we can assume an investment of 20% in these items. Rs. 2 for other ingredients
Operational Cost – There will be some operational cost like salary to one or two permanent staff and rent of the place. Let’s take it as 20% i.e. Rs. 2
Now we are left with only Potato, which is the main ingredient of Samosa
Rs. 3 for 120gms of Potato. Use unitary method to solve it further
120 gm = Rs. 3
1000 gm = Rs((3/120)*1000) = Rs. 25 per Kg
Roadside vendor mostly gets potato from whole sale. So, you can also state that the normal market rate of one kilogram of potato is 1.2 times the whole sale rate
Rs.(25*1.2) = Rs. 30 per Kg
Enjoy your samosa /_\
The Data Monk