Why numbers can be deceiving

Study them in the proper context

By: Bob Ulrich

Here’s the statement that caught my attention. “City officials... estimate the permit fee, when passed on to the public, would translate to about a nickel per new tire purchased.”

Do the numbers add up? Let’s see.

The cost to the dealer is $250 a year. Because every dealership in the area is affected, it’s not unreasonable to assume a five-cent price hike would stick.

To break even, each dealer would have to sell 5,000 tires a year ($250 divided by $.05). If the dealer is open six days a week, he would have to sell an average of 16 tires a day (5,000 divided by 312 days).

Based on the number of replacement consumer tires sold per year and the number of domestic independent tire dealers, that number is quite acceptable.

As you can see, a lot of numbers are thrown around in the media, especially when legislation is a hot topic. Be aware that, unless they are put in the proper context, numbers can be deceiving.    ■

If you have questions or comments, please e-mail me at bob.ulrich@bobitcom.

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Related Topics: Bob Ulrich, Editorial

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