The Math Behind IKEA

Ikea.jpg

So besides the fact that IKEA refuses to bring a store to Nashville (but there’s one opening in MEMPHIS this year?!?  Seriously?!) …

…there is some pretty interesting mathematics behind the way they go about their pricing and purchasing options.

FiveThirtyEight wrote about it here:  http://fivethirtyeight.com/features/the-weird-economics-of-ikea/

BADGING:

Read the article linked above.

Answer the following questions:

  1.  If IKEA uses 1% of the world’s lumber every year as they claim, how much lumber is produced on the planet each year?
  2. Explain briefly why you think the price of the Poäng chair has dropped so much in the years since it was first introduced.
  3. Look at the graph they provided comparing prices of the Antilop high chair.  Give three hypotheses about why the chair had a drastic price change in certain areas during certain years.  Why might it have both drastic increases and decreases included on that graph??
  4. The author claims that IKEA is sui generis in the furniture world.  Explain what that phrase means and give an example of another company that is sui generis in a different field.

 

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