Let’s run a thought experiment.
You return home to dinner, and your loved one serves you 2 cakes. One is freshly baked today, and the other from yesterday.
Assume that you only have appetite for only 1 cake, and assume that there will be no cakes baked for tomorrow. How would you settle your dinner?
First In, First Out (FIFO)
Some people will argue that we should follow the FIFO, which is used commonly in the F&B industry because food has expiry dates. It will be assumed that the cake baked yesterday will spoil 1 day before the cake baked today, so if you consume the cake baked yesterday, you get to eat the cake baked today tomorrow, since the chance of it spoiling tomorrow is lower than if we leave the older cake for tomorrow.
If we follow this logic, if you eat the cake baked today today, there is a high chance that by the time you want to eat yesterday’s cake tomorrow, it will be spoiled.
FIFO ensures maximisation of resources, and consistent output.
First In, Last Out (FILO)
Another group of people will argue that value is not defined solely by the expiry date, but also other factors like freshness and taste-retention.
If we were to eat the cakes based on FIFO, on both days, we will be eating cakes baked the day before, hence we will be eating cakes not-so-fresh and eating them for both days.
If we were to eat the cake baked today today, we will be eating a cake fresh, and would have derived the most value from the cake.
There is a chance that the cake baked yesterday may spoil by tomorrow, and even if it doesn’t, we would have eaten cake baked 2 days before. The overall (average) value derived from both cakes is same as FIFO, but there will be 1 experience that will be much better than the other.
In value-driven actions, FIFO ensures value derived is consistent and close to the average value; FILO ensures maxmisation of value.
FIFO, then, is best for scenarios in which the depreciation of resources is slow (e.g. taking out frozen chicken for cooking). FILO is more adopted by organisation driven to provide bespoke services, or experience-driven entities.
Suppose we think slightly out of the box and decide to cut both cakes into half. For today, you eat half from each cake. Tomorrow, you eat the remainder.
Suppose that a cake baked today is rated 10, and it loses 1 point for each passing day.
Today, by eating half from each cake, you would have eaten a value of (0.5×10+0.5×9)=9.5.
Tomorrow, by eating the remainder, you would have eaten a value of (0.5×9+0.5×8)=8.5
The total value is 18.
If we follow the same exercise for FILO, the total value derived would be (10+8) = 18
If we do the same for FIFO, the total value would be (9+9)=18.
Equality is sort of a compromise between FIFO and FILO. In FILO, however, you experience a full experience of 10, while in Equality, you experience a mixed experience comprising of 10 and 9. Imagine you visit a fine dining restaurant, and they serve you a glass of vintage wine, and when you ask for a refill, you get a non-vintage village wine. Overall, you might argue that you are better off than when you are served village wines on both fills, but it speaks out loud in terms of the value and quality control of the restaurant.
When we add the dimension of reputation of restaurant, Equality does the most harm to that dimension. Similarly, gratification of the recipient will suffer greatly, as a sense of deception or buyer’s regret will overcome the actual value derived.
Let us then think from another perspective: You shall eat the cake baked today, and then give the cake baked yesterday to your neighour. Your neighbour may not be able to discern that the cake was baked yesterday. Even if they do, you do not need to tell them you have eaten the cake baked today (“Oh Azen, I have not been feeling well for the past 2 days, so I don’t want to waste the cake baked yesterday”). Either way, if they are not aware and cannot compare, they will enjoy the cake at face value.
Resource is maximised; value is maximised (10+9=19, vs 18 in the past 3 scenarios); reputation is guarded (in fact, if an orange juice manufacturer were to advertise that they had recycled orange peels to make cakes, they would have garnered a reputation boost, even though the cake buyers are essentially buying cakes made from food waste).
The only thing to be worried about is your loved one’s feeling.
“Dear, why did you not eat both the cakes I baked for you?”
But to be frank, that last dimension cannot be addressed adequately for any of the scenarios listed so far. I mean, if we were to make sure our loved ones don’t get angry, the only solution is to risk our life by stuffing both cakes down our throats!
There can actually be more permutations on how we can approach the issue, but to shelf those solutions from this post, I will bring in another dimension: effort.
Diversification is already a solution that require more effort than the other 3 scenarios, mainly because it brings in another player and effort has to be put in to manage that player (remember having to keep the fact that there was a fresher cake from the neighbour?).
Similarly, I did not introduce another dimension in which your loved one baked a different cake for today vs yesterday. You may love both cakes equally, or preferred the cake baked yesterday. All these factors tip the balance towards your decision.
Disclaimer: I am a casual social commentator, who speaks because it is logical and rational, so my points are not necessarily based on established research and studies. As much as possible, I will refer to theories and knowledge I picked up through formal education. If you do agree to my ideas, please feel free to contaminate others in your social circle. If you disagree, though, it would be good to provide sources and credits, so that I can learn from my mistakes.