Every January, the marketing department of a furniture company in Tashkent receives its annual budget of 24,000 dollars. This year its head, Nodira, divided it on a single sheet of paper.
Three-eighths of the budget went to online advertising. She did not need a calculator: one eighth of 24,000 is 3,000, so three-eighths is 9,000 dollars. One quarter went to printing catalogues, which is 6,000 dollars. One sixth went to two trade fairs, which is 4,000 dollars.
What is left goes into a reserve for surprises. Nodira added the three amounts: 9,000, 6,000 and 4,000 make 19,000, so the reserve was 5,000 dollars, or five twenty-fourths of the budget.
The finance director had one rule: the reserve must be more than one fifth of the budget. One fifth of 24,000 is 4,800, and 5,000 is larger, so the plan passed. Nodira noticed how narrow the margin was. If printing had taken one third instead of one quarter, the reserve would have disappeared completely.
She kept the sheet on her desk all year. Whenever a supplier asked for more money, she looked at the fractions first and the dollars second. "A fraction tells you how big a piece is," she told a new colleague. "A dollar figure only tells you how big it looks."