Article Analysis Essay on How Coronavirus Impacts the Global Supply Chain

Introduction

Aydin Goker's article, "How coronavirus impacts the global supply chain." As the number of reported cases of a Coronavirus grows beyond 100,000, the impact of the disease has weighed heavily on the world economy, triggering stock price swings, lowering estimates of profits, and even delaying film premieres (Aydin). For a business to achieve its promise to its customers, it must have an excellently-functioning supply chain. Without a stable supply chain, the manufacturing business will starve to death for key inputs into its production process. A retailer is going to have empty shelves (Aydin).

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The global impacts on supply chains have arisen mainly from China's unfortunate situation. It affects the distribution of materials to many suppliers and retailers worldwide, and this is critical since China is an immense source of products and goods. China is a significant market for products and services. Local industries that rely on local Chinese customers are having consequences as buyers in China reduce travel and consumption, and manufacturers in China slow down or stop production. As a result, there is a steady rise in demand in the short term, and you suddenly continue to see a lot of empty shelves.

According to Aydin, Large companies tend to have a more diversified supply chain compared to the small company; hence they might not be more affected like a small business in the area of stockpiling. They might advantage them in gaining more market share in the stock market when consumer values product availability.

Economic Concepts of the Article

The underlying economic concept in the article is the supply and demand power in the business system and the way it affects consumers. The limitation of resources caused by coronavirus leads to a scarcity of products all over the world. It could lead to an increase in the prices of different commodities around the globe. Since the supply chain is not sufficient, the demand in the market will be high, leading to scarce of items.

Scarcity addresses the underlying economic challenge that the world has insufficient or inadequate resources to fulfill virtually limitless desires. This fact requires people to consider whether to distribute resources in the most effective way possible to meet as many needs as possible. Currently, there is a limitation of commodities in the market; products are scarce in the market since the largest supply chain in the world is partially broke due to coronavirus. When customers go to the shop and see empty shelves, they can begin a vicious panic buying loop.

Therefore, a market system is driven by supply and demand if people want to buy goods, and if they are scarcely available in the market at a certain period, their price might go high than regular days. Economics always assume that people are generally rational. People make decisions on emotions that don't always maximize our benefit.

Work Cited

Aydin, Goker. "How Coronavirus Will Affect The Global Supply Chain". The Hub, 2020, https://hub.jhu.edu/2020/03/06/covid-19-coronavirus-impacts-global-supply-chain/.