December 8, 2015

A Formula For Calculating The Best Usage Of Your Pantry

I've been thinking about optimizing our pantry usage lately.   We've got different items in there that are consumed at different rates, go on sale at different rates, are different sizes and cost different amounts.   I realized our pantry use isn't all that efficient.   We've got stuff that sits in there forever and is hardly used.   We've got some stuff that doesn't cost much and we don't save much by stocking up on during sales versus simply buying it at full retail as needed.   Larger items take up a lot of room and are less effective use of space versus smaller items.

Thinking about it a little I came up with the following factors that impact the effective use of our pantry :
It makes sense to buy stuff that has the biggest sale discount.     You'd rather have items that save you a lot in the pantry versus stuff that saves you little.
We should fill the pantry with smaller items so the smaller the better.  Best to squeeze as much stuff in there as possible.
The longer it takes to consume an item the worse.    This is because you have to store the replacement items in the pantry thus taking up space longer and minimizing your savings.

This leads me to derive the formula for valuing items in the pantry at :

Pantry value = savings / (size * consumption time)

Savings : is the amount you save on the item by buying it on sale or discount versus simply paying the standard cost at the grocery store.   This is based on the assumption that you go to the grocery store every week or as necessary and can readily buy items at a standard price.   If items never go on sale theres no need to store them in the pantry.   But if you find the item on sale $1 less than normal and stock up on it then you save $1 by putting the item in the pantry.

Size : is just a calculation of the cubic volume of the product in inches.  You can use any measure for volume you want really but I just chose inches.   Bigger items take more room and are thus less efficient use.

Consumption time : is how long it takes you to use that item and thus how long its going to be taking up space in the pantry.   If you rarely use an item then it will sit in the pantry longer and use up more space and this is less efficient then items that take space longer.   Would you rather save $10 by storing an item for a year or save $0.25 each week by storing and replenishing an item every week?

Lets compare two items we have in our pantry :

Item #1: Cheerios
A 20 oz. box of Cheerios is about 12" x 10" x 3.25".   Thats 390 cu. in.  I go through a box a week basically, as I eat a couple big bowls for breakfast.       I can get those for $3.40 at or similar price at Costco.    If I just buy them at the local grocery store the price tends to be more like ~$5 for a similar size box.   So I save about $1.50 by keeping Cheerios in the pantry.    But I only need to have 1 box on hand at any given time and on the other hand I don't want to be going to Costco or making orders every other week just for Cheerios.  

Item #2 : mac & cheese
Normally the mac and cheese we get is about $1.75.   Its not the cheap stuff.   But it is on sale for $1 a box every month or so.  We go through 1 box a week.   Each box is 6"x 8" x 1" for 48 cu. in.    They tend to go on sale about every 2 months.

The formula for pantry real value is =   ( Saving ) /   ( volume * consumption )

So for the Cheerios example I'm saving lest say $1.50 but I can buy them every week so sales period is 1.   The volume is 390 cu in and I go through a box in 1 week.    $1.50  / 390 *1 = 0.0038

By contrast the noodles are saving me $0.75 and their volume is just 48 and they are consumed in a week.   So the formula is then 0.75  / 48*1 = 0.0156

The mac and cheese has a higher pantry value so if I were choosing real estate in the pantry I'd definitely want a box of mac & cheese over a box of Cheerios.    But what about a 2nd or 3rd or 4th box?

It takes me 2 weeks to consume a 2nd box.   It takes 3 weeks to consume the 3rd box and so forth.

That changes the formula to 2nd box = 0.75/48*2 = 0.0078 and 3rd box = 0.75/48*3 = 0.0052, 4th = 0.75/48*4 = 0.0039 and 5th = 0.0031.    Its not until the 5th box that storing the extra mac and cheese becomes less cost effective for the space versus storing the cheerios.

Storing 1-4 boxes of mac and cheese in the pantry is better use of the space than saving a box of Cheerios.   However saving more than 4 boxes of mac & cheese is less effective pantry use than a box of cheerios.

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