The Mad Max Economy and supply chains

An article in the New York Times (November 11,2012) describes the Mad Max Economy that focuses on the impact of bad events such as Hurricane Sandy – when generators,kerosene heaters, radios, batteries, candles and industrial fans see demands soar. But demand increases both in regions hit as well as across the consumer base as awareness of the impact of such events increases. Generator manufacturers such as Generac, freeze dried food retailers such as Costco and Walmart, candle supplies etc are impacted by this Mad Max Economy. But will such event driven supply chains also result in more permanent demand for standby generators in houses ? Given the reluctance to raise prices during disasters to prevent a PR disaster, even if the cost of supply increases, how should such industries maintain profitability ? Should the Federal government subsidize or offer to perform part of the steps of supply for some parts of these retailer supply chains to maintain availability while preventing price increases ?

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About aviyer2010

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

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