As a fairly young man, I was tasked with writing a program that would take all the figures from a "works and cost accountant" who analysed and apportioned every single cost of a department chain with 194 stores, 9 warehouses and multiple administration centres and apply them to individual departments within the stores. Then to take the departmental sales of those stores, calculate the gross profits from sales and cost of goods, then apply the apportioned costs to each department in each store, calculate a net profit and sum all the stores to arrive at a net profit for each department.
The 'model' had some 4.5 million elements and was an absolute work of art.
This was presented to the board and it showed that the Grocery department, which accounted for 34% of the total sales was in fact making a loss.
The Marketing director for Groceries took one look at the results, said "Bullshit" and that was the end of the discussion.
My wonderful model sank into obscurity never to be seen, heard of or referenced again.
The "algorithm" was based on the accountants decisions on how to allocate thousands of costs. What proportion of the Managing Directors salary should be allocated to the Artificial Flower department in in a supermarket in a small town?
It was a wonderful exercise and gave me the insight so that when I wrote a program to "suggest" the next years budgets for every store/department and cost centre, 95% of the suggestions were accepted as is.
The real benefit to the company came in the fact that at every level questions were asked about costs and sale (why did appliances get 6% of floor space in one store and 22% in another?)
Sales and cost of sale were real based on revenues.
The allocation of costs were real but were they a true reflection?
So, in a perfect world you'd know how many minutes of the Managing Director's time was spent thinking about Flowers, rather than Appliances, whereas the amount of floor space given over to Flowers or Appliances can be measured exactly. So some variables are "modeled", are guessed at by the accountants.
Then there is the hard-to-quantify benefit of foot traffic today shopping for Flowers resulting in awareness of Appliances and shopping for Appliances tomorrow, and vice versa.
Which all goes sideways when everything is bought on Amazon and subject to their horrific search algorithm, designed to prevent you finding the item you want without seeing ten other items you don't want. You are forced to take a route through the store to see many things you don't want.
"You are forced to take a route through the store to see many things you don't want."
This sentence summarizes, with great precision, IKEA's marketing strategy. A strategy deployed, usually with significantly less success, by merchants around the world.
A store designer was boasting about the comfort that the wide aisles made for the customers. The founder called him a F** idiot, "You don't want them to race through the store, you want them, jammed up so they have to look at the shelves."
If they don't like the result, one can change the assumptions until you find an outcome that they do agree with.
Marketing is a scam to motivate people to buy stuff they don't need and don't really want.
On a slightly deeper level, one can model ballistic trajectories or planetary orbits fairly accurately. More complex models such as heat transfer and flow characteristics are less exact, and when it comes to human behaviour, or really complex interactions it is just a guess. (obscured by lots of numbers and fancy words)
I suppose if we start paying people for empirical evidence rather than digital fantasy simulations, we'll probably get more of the former and less of the latter. If we also start to impose negative sanctions for the production of the latter it will probably reduce even further.
“a more equitable Europe committed to sustainability and low-consumption lifestyles resulting in substantial action toward both mitigation and adaptation”
translates to
"a gooder Europe committed to goodness and good life choices resulting in good actions towards goodness and goodness"
And yet they would insist they are motivated to devise models to reach objective conclusions to coerce humans without any interfering belief in Go(o)d.
"Climate Change" needs to die a sudden, complete, and final death. Musk made a statement last fall that Climate Change was a scam and when Trump was elected, he would prove it.
I know he's a busy guy right now, so I'll try to be patient....
Never tired of you ripping to shreds, in laymen language, the use of models to come up with a problem to show the world is ending. Just wish more people would take the time to understand.
The US housing market, by some estimates, e..g, internet search, is $50 trillion. So the First Street apocalyptic implication is a 3.0% decline due to climate change. Seems not very apocalyptic.
I seem to recall in 2008 there was a national mortgage crisis that inflicted far worse decline to the housing market.
As a fairly young man, I was tasked with writing a program that would take all the figures from a "works and cost accountant" who analysed and apportioned every single cost of a department chain with 194 stores, 9 warehouses and multiple administration centres and apply them to individual departments within the stores. Then to take the departmental sales of those stores, calculate the gross profits from sales and cost of goods, then apply the apportioned costs to each department in each store, calculate a net profit and sum all the stores to arrive at a net profit for each department.
The 'model' had some 4.5 million elements and was an absolute work of art.
This was presented to the board and it showed that the Grocery department, which accounted for 34% of the total sales was in fact making a loss.
The Marketing director for Groceries took one look at the results, said "Bullshit" and that was the end of the discussion.
My wonderful model sank into obscurity never to be seen, heard of or referenced again.
So would you say it was a model, or a depiction, of the real allocation of profit/loss to departments?
The "algorithm" was based on the accountants decisions on how to allocate thousands of costs. What proportion of the Managing Directors salary should be allocated to the Artificial Flower department in in a supermarket in a small town?
It was a wonderful exercise and gave me the insight so that when I wrote a program to "suggest" the next years budgets for every store/department and cost centre, 95% of the suggestions were accepted as is.
The real benefit to the company came in the fact that at every level questions were asked about costs and sale (why did appliances get 6% of floor space in one store and 22% in another?)
Sales and cost of sale were real based on revenues.
The allocation of costs were real but were they a true reflection?
It was great fun and an intellectual challenge.
So, in a perfect world you'd know how many minutes of the Managing Director's time was spent thinking about Flowers, rather than Appliances, whereas the amount of floor space given over to Flowers or Appliances can be measured exactly. So some variables are "modeled", are guessed at by the accountants.
Then there is the hard-to-quantify benefit of foot traffic today shopping for Flowers resulting in awareness of Appliances and shopping for Appliances tomorrow, and vice versa.
Which all goes sideways when everything is bought on Amazon and subject to their horrific search algorithm, designed to prevent you finding the item you want without seeing ten other items you don't want. You are forced to take a route through the store to see many things you don't want.
Which is why I never buy anything online and never ever look at Amazon or other online emporiums.
15 years in Retailing and I realise that it is all crap.
Most shoppers walk out with 2x - 3x the number of items that they went into the store to buy.
If you don't have a list, don't walk into the shop. At the checkout, if it is not on your list, leave it in the trolley.
You would be amazed at how much money I save.
"You are forced to take a route through the store to see many things you don't want."
This sentence summarizes, with great precision, IKEA's marketing strategy. A strategy deployed, usually with significantly less success, by merchants around the world.
A store designer was boasting about the comfort that the wide aisles made for the customers. The founder called him a F** idiot, "You don't want them to race through the store, you want them, jammed up so they have to look at the shelves."
Having read the entirety of this thread, I still don´t know if you´re an idiot, or I am, for not understanding most of it.
There is nothing much to understand.
Models are based on assumptions.
People agree with the outcome or they don't.
If they don't like the result, one can change the assumptions until you find an outcome that they do agree with.
Marketing is a scam to motivate people to buy stuff they don't need and don't really want.
On a slightly deeper level, one can model ballistic trajectories or planetary orbits fairly accurately. More complex models such as heat transfer and flow characteristics are less exact, and when it comes to human behaviour, or really complex interactions it is just a guess. (obscured by lots of numbers and fancy words)
I suppose if we start paying people for empirical evidence rather than digital fantasy simulations, we'll probably get more of the former and less of the latter. If we also start to impose negative sanctions for the production of the latter it will probably reduce even further.
(Edited due to atrocious spelling. Sorry.)
Are you suggesting that payment should be linked to results?
Sacrilege!
Bureaucracies around the world are trembling with rage.
When one puts garbage in to a model, one can hardly expect anything other than garbage to come out of it.
OR, when a model is constructed of garbage, and fed garbage, it IS garbage.
“a more equitable Europe committed to sustainability and low-consumption lifestyles resulting in substantial action toward both mitigation and adaptation”
translates to
"a gooder Europe committed to goodness and good life choices resulting in good actions towards goodness and goodness"
And yet they would insist they are motivated to devise models to reach objective conclusions to coerce humans without any interfering belief in Go(o)d.
"Climate Change" needs to die a sudden, complete, and final death. Musk made a statement last fall that Climate Change was a scam and when Trump was elected, he would prove it.
I know he's a busy guy right now, so I'll try to be patient....
Never tired of you ripping to shreds, in laymen language, the use of models to come up with a problem to show the world is ending. Just wish more people would take the time to understand.
I never tire of you reminding me again, given the accompanying smashing of a study or two. Also today I came across this BBC broadcast from 2014...
https://www.bbc.co.uk/sounds/play/b04f9r4k
Oh the sweet smell of irony!
I have never seen "sub-scenario" before. I now know something new but fear something more valuable was pushed out.
Climate change is a way to complain about the weather by blaming somebody for it.
The US housing market, by some estimates, e..g, internet search, is $50 trillion. So the First Street apocalyptic implication is a 3.0% decline due to climate change. Seems not very apocalyptic.
I seem to recall in 2008 there was a national mortgage crisis that inflicted far worse decline to the housing market.
Maybe if we didn't have 30 million illegals property values would be lower?