Japanese+Earthquake+Impact+Could+Cause+Major+Disruption+in+Electronics+Supply+Chain


 * __ Site: http://www.sdcexec.com/web/online/Global-Focus-News/Japanese-Earthquake-Impact-Could-Cause-Major-Disruption-in-Electronics-Supply-Chain/50$13360 __**

This article is about how Japan earthquakes affected the supply chain of electronic device markets. Because of the earthquakes, two factors of productions are severely damaged. Labor force significantly decreased and land (in this case, the place for manufacturing) is damaged so it is impossible to produce desirable number of goods to satisfy the world electronic device market. The author mentions that earthquakes affected every company both indirectly and directly because of transportation disruption; companies are unable to get enough supplies for production. Therefore, production possibility curve will be shrink. For example, there is a problem with production of semiconductors, which are largely produced in Japan. Because Japan in 2010 accounted for 13.9 percent of all global electronic equipment factory revenue, according to a preliminary IHS iSuppli estimation, this crisis will also hugely affect Japan’s GDP.
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· Revenue: the entire amount of income before any deductions are mad · Consumer: a person who uses goods or services · Production: the quantity of something (as a commodity) that is created (usually within a given period of time) · supply chain: A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. · Supply: the amount of some product which is available to customers
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- The diagram illustrates how shortage of supplies leads to change in supply. Supply curve is shifted to left due to disruptions in transportation.
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I don’t think there isn’t any alternative to this situation other than funding government with recovery. Companies should not think about making profit because if they do, and keep competing each other for one more penny, Japan economy can actually collapse. For example, now Japanese people’s demand for food and water has sharply increased for the fear that they won’t get sufficient food due to the earthquakes. Though demand is increasing, supply is decreasing sharply at the same time. It is impossible to please every consumer. If the companies are taking advantage of this to raise the price during this time, it will cause inflation and bubble economy might occur again. Moreover, since there is a change in supply, shifted to left, all companies should fund governments for recovering the infrastructures and transportation though it might cause short-term normal profit or even loss in total revenue. It is because this way, companies' future stability can be guaranteed.
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