The supply chain impact of shutting down the Federal Helium stockpile

An article in the Wall Street Journal (August 11, 2012) describes a plan to shut down crude helium reserves currently held by the US government that satisfy 33% of the world demand. Given that US pricing focuses on covering debt related costs, it impacts the market price, and, by keeping prices low, decreases the incentive for producers of helium. But the expected rise in prices for helium, used in welding and by medical imaging equipment, as well as party balloons, has a downstream impact. Rural imaging locations may have to shut, impacting the distance patients have to travel. But helium prices will rise to reflect market prices, without a Federal role. Is this increase in helium prices the right direction for the industry ? Should national need suggest that the Federal government treat their role as an externality and thus keep the stockpiles ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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