By Enock YEBOAH-MENSAH
Sometimes the best finance lessons aren’t taught in classrooms; they’re fried in oil, spiced with pepper, and served in paper cones.
It was a humid evening in 2010 at the University of Ghana, Legon. The campus was alive with students scattered across lecture halls, libraries, and lawns, each buried in preparation for the mid-semester exams. In the Volta Hall library, two business school students sat across from each other: Maame Owusua, a level 300 accounting major, and her often-annoying course mate, Yaw Mensah.
For three long hours, from 4 pm to 7 pm, they had wrestled with the dense subject of working capital management, flipping through textbooks and scribbling down notes on lead time, reorder level, reorder quantity, and safety stock. The fluorescent lights above hummed, and Maame’s concentration began to waver. Her stomach betrayed her with a low rumble. Yaw, quick to notice, leaned back with his mischievous grin.
“Ei, Maame Owusua, should we go and get kelewele at the Volta Hall car park? Your face is screaming for it!” he teased.
She rolled her eyes, trying to resist. “Yaw, I’m fine. Let’s just finish.”
But after some back and forth, Maame finally gave in — with one condition. “Fine, but only if you explain those working capital concepts to me in a way I can actually understand.”
Yaw chuckled. “Deal. Let’s go.”
At the Volta Hall Car Park
The car park buzzed with life. Students clustered in groups, their chatter rising above the sizzling sound of ripe plantain cubes frying in hot oil. The irresistible aroma of ginger, pepper, and cloves filled the air, pulling the crowd closer to the kelewele seller’s stand. A long queue snaked in front of her. Maame and Yaw joined, watching as the seller, a middle-aged woman with a warm smile, managed orders with precision.
Yaw nudged Maame. “Now watch carefully. This kelewele seller is about to be your textbook come alive.”
Yaw’s Explanation
He pointed at the sizzling plantain. “See, lead time is simply the time between when she tells her assistant to start frying more kelewele and when that kelewele is ready for customers. If it takes 15 minutes for the plantain to be peeled, seasoned, fried, and placed on the plate, then her lead time is 15 minutes.”
Maame nodded, already smiling.
“Now,” Yaw continued, “notice she doesn’t wait until the plate is empty before asking for more. The point at which she calls her assistant to start frying again is the reorder level. She looks at how many customers are still in the queue and calculates how many pieces she’ll sell during the 15 minutes of lead time. That’s her reorder level.”
He leaned in, lowering his voice as if sharing a secret. “The reorder quantity is how much kelewele she tells her assistant to fry each time. Not too much, or it’ll get cold and wasted. Not too little, or the customers will wait too long. It’s just the right balance.”
Yaw waved toward the plate stacked high. “That pile is her maximum level — if she fries more than that, it will lose quality. On the other hand, she doesn’t let the plate go below a certain point — that’s her minimum level, because customers might walk away if they see nothing. To be safe, she always keeps some safety stock — a little extra kelewele, just in case more people show up suddenly or frying takes longer.”
He paused, letting the scent of the kelewele drive the point home. “And if you want to picture her average stock, just imagine the usual amount of kelewele on her plate across the evening — not too much, not too little, but somewhere in the middle.”
The EOQ Twist
Maame tilted her head. “Okay, but what about this EOQ thing we struggled with in the library?” Yaw smiled. “Good question. EOQ — Economic Order Quantity — is about finding the sweet spot of how much kelewele Amina should fry each time to minimize total costs. On one hand, if she fries too often in small batches, she wastes oil, time, and energy — those are like ordering costs. On the other hand, if she fries a very big batch at once, a lot may get cold or wasted — that’s the holding cost.
So EOQ gives the perfect batch size that balances both.” He drew an invisible formula in the air with his finger.
“Here, (D) is the total demand for kelewele, (S) is the setup cost each time Amina fries, and (H) is the cost of keeping kelewele on the plate too long. EOQ tells us the optimal batch size Amina should fry each time Amma gives the instruction.”
Maame burst into laughter, clapping her hands. “Yaw, now I get it! I’ve been staring at formulas for three hours, and all it took was kelewele for me to understand.” Her eyes lit up as the concepts clicked in her mind.
Finance Lens
Viewed through a finance lens, Maame Owusua’s evening at the Volta Hall car park demonstrates that financial principles are not limited to boardrooms or balance sheets — they are alive in everyday business practices. The kelewele seller and her assistant, Amina, unknowingly operate with the same logic that underpins working capital management in large corporations.
The lead time reflects production lag, reorder level mirrors inventory triggers, reorder quantity connects to batch decisions, and safety stock illustrates the importance of buffers. Most critically, EOQ shows the delicate balance between the cost of frequent restocking and the waste of overstocking. In essence, the small plate of kelewele becomes a miniature laboratory for understanding inventory economics.
An Unexpected Listener
Unknown to them, the kelewele seller had been listening intently while scooping hot, golden-brown pieces into paper cones. When Yaw finished, she looked at him in amazement.
“Young man,” she said warmly, “I graduated from the Business School myself years ago. I passed exams on these concepts, but honestly, I never understood them this clearly. Today, you’ve taught me something new — through kelewele of all things!”
She handed over their portions with a smile. “As a thank you, this kelewele is free for both of you.”
Yaw and Maame exchanged surprised glances. Maame laughed, shaking her head. “Yaw, you’ve just taught working capital management, fed me, and even saved me money. Maybe you’re not that annoying after all.”
Yaw grinned, triumph written across his face. “See? Kelewele always delivers.”
Moment of Clarity
For Maame Owusua, the concepts that had remained abstract and heavy with formulas in the library suddenly became tangible. Watching plantain pieces rise and fall on the kelewele seller’s plate, she realized that finance is not an isolated academic subject but a living language of decision-making.
The “aha moment” came when Yaw linked EOQ to the act of frying the right batch size — not too much to waste, not too little to disappoint customers. In that instant, Maame grasped that finance is best understood when theory meets life.
Even more striking was the kelewele seller’s confession: she had passed exams on these same concepts but never internalized them until Yaw’s practical illustration. It was proof that finance, when explained in the rhythm of daily realities, has the power to transform understanding across generations.
Discussion Questions
- How does the kelewele seller’s approach to frying and managing demand illustrate the importance of lead time and reorder levels in inventory management?
- In what ways can the Economic Order Quantity (EOQ) model be applied to small-scale businesses like the kelewele stand, and what limitations might arise in such informal settings?
- What role does safety stock play in balancing customer satisfaction with cost efficiency, both in the kelewele seller’s case and in larger organizations?
- How does connecting abstract finance concepts to real-life examples (like kelewele) improve understanding and retention for students and practitioners?
- What insights can businesses — small or large — gain from viewing working capital management not just as formulas, but as practical decision-making strategies?
- If you were the Dansos, would you spend more on Adjoa’s education or finish your retirement house? Why?
Education should take priority because it has a direct impact on Adjoa’s future earning capacity and the family’s long-term stability. Unlike the house, which can be completed gradually over time, university education has strict timelines and deadlines.
Missing out could mean Adjoa delays her career start, reducing her ability to support herself and the family in the future. However, the Dansos do not need to abandon the house project completely. They could set aside a smaller, fixed portion of their income (say 15–20%) for gradual construction, while channeling the bulk of resources into her education. This balanced approach secures Adjoa’s future while ensuring the dream home is not permanently shelved.
- The Mensahs lost both income sources at once. What is more important for families—having many income streams or saving more for emergencies?
Both are crucial, but income diversification provides greater resilience. Savings can only cover expenses for a limited time (usually 3–6 months if well-planned). Once those reserves are depleted, the family could be left stranded. Multiple income streams, however—such as side businesses, freelance work, or rental income—create continuous inflows of cash even when one source fails. That said, a proper family plan should combine the two:
- Build an emergency fund (3–6 months of household expenses) to provide immediate support during shocks.
- Develop at least two additional income streams outside the primary job. For example, the family could start a small farming venture, invest in treasury bills, or explore digital side hustles.
This combination ensures that when crises hit, the family has both immediate relief (savings) and long-term resilience (income diversity).
- Why do some families, like the Owusus, spend on luxury and appearances even when their finances are weak? Is it personal choice or pressure from society?
It is mostly social pressure and cultural expectations. In many communities, success is measured not by savings or investments but by visible symbols—cars, clothing, lavish parties, or expensive homes. Families often overspend to keep up appearances, even at the cost of financial security. However, this creates hidden stress, debt, and vulnerability to financial shocks. To overcome this, families need:
- Financial literacy: Understanding that wealth is about assets and security, not outward appearances.
- Value-based decision-making: Spending decisions should align with long-term goals (e.g., buying land or paying school fees) instead of impressing others.
- Peer discipline: Surrounding oneself with friends or groups that value financial stability more than luxury can reduce pressure.
In short, families should live by their own financial truth, not society’s expectations.
- Since inflation keeps raising costs, what can families do to protect their money—invest early, save differently, or buy assets sooner?
Inflation steadily erodes the value of money sitting idle in savings accounts. The best defense is to put money into inflation-resistant assets. Families should:
- Invest early in appreciating assets such as land, real estate, or stocks. Over time, these tend to grow in value faster than inflation.
- Use short-term investments like treasury bills, money market funds, or inflation-linked bonds to protect cash from losing value.
- Buy durable household assets early (e.g., quality furniture or tools) rather than postponing purchases, since costs rise over time.
- Invest in education or skills: This future-proofs the family’s ability to earn in high-inflation environments.
In summary, families should not just save but strategically convert savings into assets that grow in value and generate income.
- If you could create one golden rule for family finance to prevent mistakes like these, what would it be?
“Always secure tomorrow before enjoying today.” This means prioritizing the family’s long-term stability before short-term pleasures. A practical breakdown would look like this:
- Save first, spend later: Put at least 20% of income into savings and investments before spending on wants.
- Build an emergency cushion: Aim for 3–6 months of living expenses to avoid panic during crises.
- Protect income with insurance: Health, life, and income protection can prevent financial collapse.
- Invest consistently: Even small amounts monthly can grow into significant wealth over time.
- Spend on wants last: Luxuries should only come after necessities, savings, and investments are secured.
This rule creates financial peace of mind and shields families from repeating the Dansos’, Mensahs’, and Owusus’ struggles.
The author is a Strategy, Leadership and Finance Enthusiast, an Mphil Finance graduate of the University of Ghana Business School, a member of the Institute of Chartered Accountants, Ghana and a part-time lecturer at the UGBS.
Email: eymensah@gmail.com
Provided by SyndiGate Media Inc. (Syndigate.info).