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	<title>Comments on: Inventory Theory</title>
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	<link>http://www.coyoteblog.com/coyote_blog/2008/05/inventory-theor.html</link>
	<description>Dispatches from a Small Business</description>
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		<title>By: Corky Boyd</title>
		<link>http://www.coyoteblog.com/coyote_blog/2008/05/inventory-theor.html/comment-page-1#comment-11164</link>
		<dc:creator>Corky Boyd</dc:creator>
		<pubDate>Sun, 11 May 2008 16:07:41 +0000</pubDate>
		<guid isPermaLink="false">http://coyote-blog.com/wordpress/2008/05/inventory-theor.html#comment-11164</guid>
		<description>&lt;p&gt;Your reference to the gasoline allocation system during the Arab oil embargo brought back some old memories of government allocation of resources gone amock.&lt;/p&gt;

&lt;p&gt;I lived in the Washington DC area at the time.  As you point out states were allocated their quotas in proportion to what it was the year before.  Metro Washington is part of three &quot;state&quot; area, Maryland, Virginia and DC.  Each state had control of distribution within their boundaries.&lt;/p&gt;

&lt;p&gt;The first miscue occurred when both MD and VA shorted distribution to their counties adjoining DC to protect their supplies from out of staters.  Baltimore and Richmond had plenty.  In metro Washington long lines developed in July and August, when the heat normally drives large numbers to beaches and mountains.  People were staying in the city out of fear of being stranded in the resort areas.  This exacerbated the demand problem in metro Washington where supply was already short.  Then MD and VA responded to political pressures from the resort communities by allocating more to them and launching massive advertising campaigns about the availability of gas there. &lt;/p&gt;

&lt;p&gt;The odd-even mandate caused its own problems by forcing many to fill up sooner than needed.  Gas stations needlessly pumped slowly to keep lines backed up.  Lines were like a magnet to fearful motorists.&lt;/p&gt;

&lt;p&gt;Congress was immune to all of this.  The congressional garages were well stocked.  &lt;/p&gt;

&lt;p&gt;I love how the Democrats scream about the eeevil speculators.  We are all specuators when we top off sooner than needed.  Airlines buy product futures to protect themselves from anticipated price spikes, as do chemical companies.  They would be derelict in their duties if they didn&#039;t.&lt;/p&gt;

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		<content:encoded><![CDATA[<p>Your reference to the gasoline allocation system during the Arab oil embargo brought back some old memories of government allocation of resources gone amock.</p>
<p>I lived in the Washington DC area at the time.  As you point out states were allocated their quotas in proportion to what it was the year before.  Metro Washington is part of three &#8220;state&#8221; area, Maryland, Virginia and DC.  Each state had control of distribution within their boundaries.</p>
<p>The first miscue occurred when both MD and VA shorted distribution to their counties adjoining DC to protect their supplies from out of staters.  Baltimore and Richmond had plenty.  In metro Washington long lines developed in July and August, when the heat normally drives large numbers to beaches and mountains.  People were staying in the city out of fear of being stranded in the resort areas.  This exacerbated the demand problem in metro Washington where supply was already short.  Then MD and VA responded to political pressures from the resort communities by allocating more to them and launching massive advertising campaigns about the availability of gas there. </p>
<p>The odd-even mandate caused its own problems by forcing many to fill up sooner than needed.  Gas stations needlessly pumped slowly to keep lines backed up.  Lines were like a magnet to fearful motorists.</p>
<p>Congress was immune to all of this.  The congressional garages were well stocked.  </p>
<p>I love how the Democrats scream about the eeevil speculators.  We are all specuators when we top off sooner than needed.  Airlines buy product futures to protect themselves from anticipated price spikes, as do chemical companies.  They would be derelict in their duties if they didn&#8217;t.</p>
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		<title>By: Mike</title>
		<link>http://www.coyoteblog.com/coyote_blog/2008/05/inventory-theor.html/comment-page-1#comment-11163</link>
		<dc:creator>Mike</dc:creator>
		<pubDate>Sat, 10 May 2008 10:46:02 +0000</pubDate>
		<guid isPermaLink="false">http://coyote-blog.com/wordpress/2008/05/inventory-theor.html#comment-11163</guid>
		<description>&lt;p&gt;I work nights. When the gasoline pipeline from Tucson to Phoenix ruptured a few years ago, I didn&#039;t buy gas any more than I normally do. I normally fill up each and every time my tank reaches empty (on the gauge).&lt;/p&gt;

&lt;p&gt;What I did was cut out leisure travel. I often enjoy night drives, so I stopped during that time.&lt;/p&gt;

&lt;p&gt;One night on my way to work I stopped for a red light next to a gas station. I saw a couple of college age guys filling a 55 gallon drum with gas. What a couple idiots. I don&#039;t know if they planned to re-sell that gas or what.&lt;/p&gt;

&lt;p&gt;I remember all my co-workers complaining of &quot;price gouging&quot;. The talk of the plant was a (single) station rumored to be selling gas for $4 a gallon. Of course, with my understanding economics, I suggested that that station probably wasn&#039;t selling gas, as gas was still available from other stations cheaper. I then compared that $4 station to the others which had run out of gas.&lt;/p&gt;

&lt;p&gt;I suggested that if your tank was on empty, and you needed gas, which would you prefer, that station with $4 gas, or no gas? After &quot;himing and hawing&quot; they agreed that expensive gas is better than no gas. I also convinced them that the higher price stops hoarding dead in its tracks. Those idiots with the 55-gallon drum would never have considered buying $4 gas. Raising prices ensures a product remains available to those that truly need it. (Someone with 1/2 a tank of gas will pass the station by, whilst someone on empty will stop for gas).&lt;/p&gt;

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		<content:encoded><![CDATA[<p>I work nights. When the gasoline pipeline from Tucson to Phoenix ruptured a few years ago, I didn&#8217;t buy gas any more than I normally do. I normally fill up each and every time my tank reaches empty (on the gauge).</p>
<p>What I did was cut out leisure travel. I often enjoy night drives, so I stopped during that time.</p>
<p>One night on my way to work I stopped for a red light next to a gas station. I saw a couple of college age guys filling a 55 gallon drum with gas. What a couple idiots. I don&#8217;t know if they planned to re-sell that gas or what.</p>
<p>I remember all my co-workers complaining of &#8220;price gouging&#8221;. The talk of the plant was a (single) station rumored to be selling gas for $4 a gallon. Of course, with my understanding economics, I suggested that that station probably wasn&#8217;t selling gas, as gas was still available from other stations cheaper. I then compared that $4 station to the others which had run out of gas.</p>
<p>I suggested that if your tank was on empty, and you needed gas, which would you prefer, that station with $4 gas, or no gas? After &#8220;himing and hawing&#8221; they agreed that expensive gas is better than no gas. I also convinced them that the higher price stops hoarding dead in its tracks. Those idiots with the 55-gallon drum would never have considered buying $4 gas. Raising prices ensures a product remains available to those that truly need it. (Someone with 1/2 a tank of gas will pass the station by, whilst someone on empty will stop for gas).</p>
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