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Old Aug 15, 2004 | 11:33 am
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Efrem
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Well, suppose the coffee shop said "if we're within 5 minutes of having to throw out what's left in an urn, and it's still more than a quarter full, you get a free cup with five punches instead of ten." We'd have people analyzing what times of day this is most likely to happen, complaining that during the morning rush (when they want their java fix) the urn never lasts long enough for the shop to have to throw out good coffee, and discussing which coffee chain throws out the most coffee and is therefore most likely to give you a cup for half the points. And we'd have coffee shops coming up with award schedules like 10 punches for a regular coffee, 15 for espresso and 20 for latte and arranging with the bagel place next door to punch each other's cards...

This isn't likely to happen with coffee, the amounts involved are too small to justify the hassle and the average customer would say "are you guys crazy?" but it would work. Yield management concepts apply anywhere there is a product that loses value if it's not used.
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