Question

As more people are required to "Shelter in Place", the shortage of certain items such as some food and household items in the grocery stores becomes a problem. Let's focus on 3 items in particular; eggs, bananas and toilet papers. It is safe to assume that the nation's total usage of these items has not changed.

With that assumption in mind

a) How do you justify the shortage in the stores?

b) Assuming you are managing operations for a farm producing and packing eggs for restaurants and catering services (non retail). What changes would you consider in your operations to be able to cope with the potential shift in demand in future?

Explain the "shift in demand" and why operations are struggling to cope with it. Provide at least two feedback debating each other's points of view.

Hint: It's not all about hoarding!

Answer 1

a) The shortages of products like eggs, bananas, and toilet papers can be explained in the current pandemic. Due to the hygienic concerns, more people are using sanitizers, soaps and tissue rolls to stay clean and safe from the virus. This has created a shortage as there is more consumption of these products among the consumers.

The same is the case with food supplies such as eggs and bananas. More people are enjoying home-made meals while staying at home. Also, those people who were having hectic schedules without leaving much time to be spent on their meals, are free and cooking meals at home. While this may seem like a simple reason but when we see the number of people around the world who are staying at home, compare how the exports-imports have suffered, the shortages of these products is not surprising.

b) If I were managing operations for non-retail services of these products, I would do the following:-

The times are unprecedented. I would develop a better system of understanding demands shifts in the future. The world had plenty of time to prepare itself form the pandemic but it failed to do so because no one imagined it to spread on this scale and affect so many people. Therefore, in the future, such events will not be taken lightly and I would ensure that they are used to form strategic policies for short terms. This will help the company in increasing its production by foreseeing the increase in demand. buying more and selling fewer chickens to ensure that the eggs can be supplied without any disruptions.

Also, it would be futile to just increase production. If the demand after the pandemic goes back to the normal, the additional production would just result in losses. Therefore, I would also try to find alternative suppliers in the region who can help using increasing our production in the future in emergency cases like this.