Calamities and Supply Chains

gracer

New member
Hello everyone! :)

I have observed that calamities mostly affect the chain of supply in any kind of business. With the negative impact on supplies also come the increase of prices to make up for the limited number of supplies that are available for delivery. Businesses suffer losses not just in their inventories due to damage but also in the cost of handling and delivery so the corresponding effect is an increase in prices of supplies.

Just tonight when I watched our local news, this exact same problem has been reported with regards to the supply of basic goods such as vegetables and meat. The prices of these commodities have increased the past week in my country because of the effect of continuous rains that have been affecting the production and supply of crops and livestock here.

These increase in prices is one of the strategies of producers and suppliers in making up for the losses they suffer during calamities but it still remains a question for me whether this is enough to really make up for losses. Consumers nowadays are wise enough to adjust to the increase in prices by opting for cheaper alternatives or decreasing the amount of products they purchase so they can still meet their budget.

What are your views on increase in prices of supplies during calamities?
 

neural

New member
Re: Calamities and Supply Chains

A supply chain works like anything else in this world; after established, it tends to reach a point of balance. You break that balance, and every part of the supply chain will need to reach another point, otherwise It will certainly fall apart.
 

Corzhens

Member
Re: Calamities and Supply Chains

The usual calamity here is flooding and it is obvious to affect the delivery particularly because some streets become impassable even with big trucks when the floodwater is neck deep. Take for instance vegetables, the nearby warehouse in our home fails to send out the vegetables that arrived on the previous night because of the flooding. That would leave with them just about half that they would deliver and the half would be spoiled and left to rot. In times of calamities like that, t is expected for price increases to somehow recoup the losses inflicted by the failed deliveries. And in times that the delivery from the farm did not arrive then the law of supply and demand would dictate the prices of vegetables.
 

xTinx

New member
Re: Calamities and Supply Chains

I do not mind the increase in prices as long as victims are spared from being taken advantage of. Calamaties, particularly if they hit areas where major suppliers and trading hubs are located, affect the flow of goods and services. It would be good if governments can immediately disburse calamity funds and rehabilitate affected areas so that people need not put up with price increases for too long.
 

David_TR

New member
Re: Calamities and Supply Chains

Having never faced this sort of shortage myself I can't really speak from experience (nor do I want to speak at length about something I don't know about), but I really have to wonder if raising the cost in response to a short-term loss is the right way to go. As sad as I am to hear about the rains and flooding in your country, I'm sure it will pass soon, and if beef or something gets too expensive in the short term it's going to really dissuade consumers. This is going to leave you with two problems: over-priced goods due to shortage AND potentially unsold stock since nobody is buying the increased-price goods.
 

gracer

New member
Re: Calamities and Supply Chains

Having never faced this sort of shortage myself I can't really speak from experience (nor do I want to speak at length about something I don't know about), but I really have to wonder if raising the cost in response to a short-term loss is the right way to go. As sad as I am to hear about the rains and flooding in your country, I'm sure it will pass soon, and if beef or something gets too expensive in the short term it's going to really dissuade consumers. This is going to leave you with two problems: over-priced goods due to shortage AND potentially unsold stock since nobody is buying the increased-price goods.
I agree with you. It's as if both business owners and consumers are left with two negative situations to figure out. It's just a matter of choosing which is the lesser evil among the two. In events such as calamities, people are left with only a few choices and it mostly ends up with a losing streak on both businesses and consumers.
 

Vampa

New member
Re: Calamities and Supply Chains

Hello everyone! :)
These increase in prices is one of the strategies of producers and suppliers in making up for the losses they suffer during calamities but it still remains a question for me whether this is enough to really make up for losses. Consumers nowadays are wise enough to adjust to the increase in prices by opting for cheaper alternatives or decreasing the amount of products they purchase so they can still meet their budget.
One farmer told me that they usually hike prices of produce when calamity strikes. The price hike insulates them from losses and for most people it doesn't matter much how expensive anything they want to buy is just as long as it is available.
What are your views on increase in prices of supplies during calamities?
Increasing prices of supplies prevents people who'd want to hoard some goods from doing it. And as there'll be a shortage of supplies during a calamity raising prices is the only way a business could make profits.
 

explorerx7

New member
Re: Calamities and Supply Chains

This is a standard practice in my country. When there is drought, flood, or hurricane that adversely affects the availability of crops the prices of the produce would be adjusted upwards in order to recover some of the lost revenue. Some consumers will opt to not purchase these produce, however, others will purchase the crops at whatever price it's been sold at because the may determine that they can't do without it.
 

Corzhens

Member
Re: Calamities and Supply Chains

This is a standard practice in my country. When there is drought, flood, or hurricane that adversely affects the availability of crops the prices of the produce would be adjusted upwards in order to recover some of the lost revenue. Some consumers will opt to not purchase these produce, however, others will purchase the crops at whatever price it's been sold at because the may determine that they can't do without it.
Yeah, the law of supply and demand is supreme all the time. Drought is a big hazard on the crops because of lack of water. Early this year, the southern part of our country was hit by drought and farmers have asked help from the government because their crops died just like that. The farmers will go hungry without the intervention of the government. But how about the customers of those farms who were expecting deliveries on the appointed date after the harvest? The government had to import the goods for them.
 

kaushikangara

New member
Re: Calamities and Supply Chains

Well, natural calamities are unpredictable. It is evident that the prices of the products will go on the rise due to the loss. Although the rich wouldn't have to face any problems, it's the poor and the middle classes that are worst affected. The government should intervene in such kind of situations. Making the farmers aware of the cyclone, flood or the drought days in advance will help them move the crop/product to a safer place such as a large warehouse. Although we cannot do anything for the crop under cultivation, at least the one's that have been harvested can be saved.
 

esilv

New member
Re: Calamities and Supply Chains

Natural calamities will quickly and fiercely put a vast halt on funds and resources for any supply chain management system or company. That is why it is so vitally urgent and important to act immediately. Failure to act right away may find oneself further lacking these resources and funds due to continued destruction....
 
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