Research Paper on Product Price Increase

I would explain to him the increase of supply and demand and the planning that goes into things. The theory of supply and demand theory describes how supply and demand are connected to one another and how this connection impacts the pricing of products and services. It is a concept that when the supply of an item or service exceeds the demand for it, prices decrease. Prices tend to rise when demand exceeds supply. Price rises normally lead to lesser demand, whereas price decreases frequently lead to higher supply. However, various items' supply responds to demand in different ways, with some products' demand being less sensitive to price than others. Some food items went from a demand for dinner to a dynamic demand overnight causing many places to go dry resulting in loss of funds.

Since the begging of the pandemic, supply chain planning has been off. Businesses can not get consistent with their forecasting due to the outbreaks and people hoarding supplies, supplies not being able to produce as much product as before and product/supplies not being able to get from place to place in a timely manner. Forecasting has not even been a thing this past year in a half due to the uncertainty. 

The increase of prices for food was a result of a ripple effect. Any businesses/companies saw a demand in their products and did an increase in prices. Grocery stores upped their price so that they can pay for the upped prices that transportation companies are now charging to get the supplies/product from point A to point B because the supplier went up one their price. 

Producers are facing raw material shortages, such as amino acids for animal feed and glyphosate for pesticide, which raises the cost of their inputs. Furthermore, farmers are increasingly concerned about being unable to fix their equipment in the middle of the harvest season due to a significant spare parts shortage, which has been exacerbated by persistent worker strikes. Fertilizer costs are approaching new highs, raising questions about whether adequate supplies will arrive in the United States in time for planting next spring. Supply chain challenges are becoming one of the most pressing worries for agriculture, and some economists believe that once bottlenecks reach critical levels, it will take at least a year to restore the global supply system to normalcy.

Because of transportation costs and challenges in certain areas, the flow of products and supplies almost went to a standstill at the beginning of the pandemic. Transportation is one of the largest single cost expenditure in most logistics operations. The government issued out food stamp to help people, but shelves were bare due to food spoiling before arriving to the stores because of the time it took to get there by truck. 

Manufacturers had to go up on their prices to cover the increase in pay they had to cover due to employing more employees to make the products or preform the services. Many poultry plants had to shut down during the pandemic due to COVID outbreaks which resulted in them getting very behind on work and losing product. Some suppliers had to start pushing their products to break bulk warehouses so that their products can go to multiple places once it leaves their plant. 

Companies had to redo their packaging which was a cost in their pocket which was included in their price mark up. Packaging had to changes for some items so that they did not spoil or became damaged once they left the warehouse/manufacture/farm. This value-added service resulted in a product price increase.