Interpolating Or Calculating Numbers Which Aren't In Tables
Interpolating is the art of coming up with a number in between other numbers. Next time you have to explain this to a new counter person, try to use the following example and see if it helps: If 1,000 costs $10.00 and 500 costs $5.00, what does 750 cost? $7.50 you say. How did you come up with that? Right. You interpolated. Easy to do, but hard to explain. Interpolating is used in estimating when you have two values but you need a third. How do you do it? Here's one way:
Step One
Subtract the lower price ($5.00) from the higher price ($10.00) and obtain the price result ($5.00).
Step Two
Subtract the lower quantity (500) from the higher quantity (1000) and obtain the quantity result (500).
Step Three
Divide the price result ($5.00) by the quantity result (500) to obtain the price per additional piece ($0.01).
Step Four
Subtract the lower quantity (500) from the desired quantity (750) to obtain the incremental quantity (250).
Step Five
Multiply the incremental quantity (250) by the price per additional piece ($0.01) to derive the incremental price ($2.50).
Step Six
Add the incremental price ($2.50) to the lower quantity price ($5.00) to arrive at the interpolated price of $7.50 ($2.50 + $5.00).
Interpolating Between Tables
Say you need a value for a $25 cost and you have tables for $20 and $30. There's an easy way to do it and it's similar to what was done above. For our example, assume the $25 table price is $50.00 and the $30 table price is $75.00 for 1,000. In this example, we can come up with the answer through observation. Our $25 paper cost is exactly half way in between the $20 table's $50.00 price and the $30 table's $75.00 price, so the $25 price should also be half way of $62.50. But, it could get confusing. Here's a detailed guide using the same example to assist you.
Step One
Subtract the lower price ($20 table) of $50.00 from the higher price ($30 table) of $75.00 and get the price difference of $25.00.
Step Two
Subtract the lower table basis value of $20 from the higher table basis value of $30 and obtain the basis difference of $10.
Step Three
Divide the price difference (from step one) by the table basis difference (from step two) or $25.00/$10.00 = $2.50 to obtain the $1 basis paper adjustment.
Step Four
Subtract your actual paper cost ($25.00 per 1,000) from the lower table basis value ($20) to give you the number of $1 adjustments needed. In this case: $25.00 - $20.00 = $5.00 or 5
Step Five
Multiple the number of dollars needing adjustment (Step Four) by the $1 Paper Adjustment (Step Three) to find the incremental value: 5 x $2.50 = $12.50
Step Six
Add the incremental value (from Step Five) to the value found in the lower price table (Step One) to arrive at the correct value. $12.50 + $50.00 (from $20 table) = $62.50