Banana Supply Chain Management & Demand- Free Solution by Top Experts

Question: Describe about the Demand and Supply Management for Banana Production. Answer: Introduction This study has been highlighted the scenario of banana production in Australia after the cyclone Yasi. As per the case study, it can be observed that after the cyclone, the overall banana production has been decreased within the country. In this purpose, this study has been tried to establish the favourable scenario for which the banana developing industry has been decreasing. As a result, this study is helpful to identify the reason for increasing of the prices of the banana. In addition, the equilibrium position for the individual has also been described. Furthermore, this study has been established the long run performance of the Australian banana market. Brief explanation under which the banana growing industry in Australia falls As per the background of the study, it can be stated that initially in Queensland, after a massive storm, the 90 percent production of banana crop had decreased. Therefore, as per the statement of Tietenberg and Lewis (2016), the banana industry has taken 12 months to 18 months to recover and regain the previous level. In this occasion, it can be stated that the banana production in that time had been reduced by 75 per cent. In a synopsis, it can be concluded that the storm damaged the overall fruit sold in the Australian market. Graphical explanation why banana price went up after cyclone As per the statement of Bowen and Sosa (2014), the cyclone Yasi had make a negative impact on the production of banana in Australia. As a result, the trend of the growth of banana has been reducing. On the contrary, the demand for the products was remaining same whereas the supply of banana was decreased. In this situation, to maintain the equilibrium position, the price of the banana was increased. The reason can be discussed as due to the shortages of supply, the price of the product was increased as mentioned by Bruneel et al. (2012). Figure 1: Graphical explanation of after the price increasing (Source: Created by author) From the above figure, it can be observed that the demand curve of banana production is downward sloping and is represented by D curve whereas the supply curve is upward sloping and it is represented by S0 curve. After, the cyclone Yasi, the supply of the banana has been decreased and the supply curve has been shifted to leftward. The initial price of banana was P0 and the quantity, which was supplied was Q0. The new supply curve is S1. As a result, the price of the production of banana has been increased from P0 to P1. On the other hand, the quantity was also decreased from Q1 to Q0. With the rise in the price, the consumers wanted to consume less from the previous. The theoretical model explain the equilibrium position for the individual banana producer before the cyclone According to Roberts and Schlenkera (2013), in order to discuss the impact of the individual banana producer regarding the equilibrium position before the cyclone can be discussed with the help of the following figure: Figure 2: Equilibrium position of individual producer (Source: Created by author) The above figure depicted the equilibrium position of individual banana producer in Australia. In this case, it can be observed that the individual demand curve of banana is D whereas the individual supply curve of banana producer is S. The equilibrium position is denoted by E0, where the demand curve and the supply curve intersected to each other as mentioned by Chen and Fan (2012). In this connection, Soderbery (2015) supported that the equilibrium position would not occur at E1 or E2. At the position of E1 or E2, the supply curve did not meet with the demand curve. Hence, it can be concluded that the equilibrium price of banana was P0 and the equilibrium corresponding quantity was Q0 before the cyclone. In a nutshell, it can conclude that before the cyclone, the supply of banana was equivalent to the demand for the same goods. Explain the short run impact of cyclone Yasi on the profitability of banana growing firm and industry In order to discuss the short run impact of cyclone Yasi on the profitability of banana growing firm, Bruneel et al. (2012) opined that the production of banana has been massively decreased. However, the demand of the product is remaining same. Therefore, to maintain the equilibrium, the price of the product has been increased. Before, the cyclone the price of banana was $2 to $3 per kilo while after the cyclone the price became $15 per kilo. Although the price has increased, the production of banana has been abruptly decreased. On the other hand, there is an another short run impact in the banana producing firms and industry. In case of after production of banana, the inventories of banana was also hampered due to the cyclone. As a result, the banana producers has incurred from loss financially. Figure 3: Effect of profitability (Source: Created by author) With the rise in the price of banana after cyclone Yasi due to the shortage of banana production, the demand for the products also decreased. As a result, the profitability would also decrease. In a synopsis, it can be stated that the producers would incur loss. Long run performance of the banana market In this case, it can be predicted to improve the performance of banana market of Australia, Tietenberg and Lewis (2016) suggested the government of Australia require to give allowance in order to revive the present situation. The investment of the production depend upon the present years business performance. Due to the natural calamity, the business performance has been hampered. On the other hand, the government need to develop greater storage system in order to protect the manufacturing goods from the natural calamity. Therefore, by doing these, the long run production of banana in Australia can be improved. Conclusion This study is highlighted the performance of banana producers in Australia. It can be observed that after the cyclone Yasi, the price of the banana has been increased as the banana production has been decreased. References Bowen, W.G. and Sosa, J.A., 2014.Prospects for faculty in the arts and sciences: A study of factors affecting demand and supply, 1987 to 2012. Princeton University Press. Bruneel, J., Ratinho, T., Clarysse, B. and Groen, A., 2012. The Evolution of Business Incubators: Comparing demand and supply of business incubation services across different incubator generations.Technovation,32(2), pp.110-121. Chen, C.W. and Fan, Y., 2012. Bioethanol supply chain system planning under supply and demand uncertainties.Transportation Research Part E: Logistics and Transportation Review,48(1), pp.150-164. Roberts, M.J. and Schlenkera, W., 2013. Identifying supply and demand elasticities of agricultural commodities: Implications for the US ethanol mandate.The American Economic Review,103(6), pp.2265-2295. Soderbery, A., 2015. Estimating import supply and demand elasticities: Analysis and implications.Journal of International Economics,96(1), pp.1-17. Tietenberg, T.H. and Lewis, L., 2016.Environmental and natural resource economics. Routledge.