Information Systems and Supply Chain Management

Question: Discuss about the Information Systems and Supply Chain Management. Answer: Introdiuction: There are several demand-side factors, which will be able to help to describe the current change in the price of grapes. The scenario shows that despite the best times for wine industry in Australia, the grape sellers are not able to find a buyer at the usual price. The demand for grapes will depend on the changes in prices of the related goods. Several other factors are used to produce wine besides grapes. In other words, the demand for grapes will be affected by the prices of other inputs, especially its substitutes and complements. If the price of wine increases and income of the individuals decreases, the demand for grapes will also fall. Similarly, if the customers expects price to fall in the future, they are likely to decrease the demand for wine and as a result, price for grapes will be affected. This is mostly because, due to high price at present customers are avoiding to purchase wine. On the other hand, if the price of grapes falls, the price of wine will also decrease wi th the decrease in cost of production (Silvestro et al., 2013). The changes have direct impact on the price and quantity traded of grapes. The greater the income of individuals, the more will be the quantity traded of grapes. Technological changes will also lead to increase in quantity traded of grapes, as improved technology will reduce cost of production. This will turn, increase the marginal profit. This will induce Glen Arnold increase the supply of grapes. This will also avoid the usage of cheap grapes as well as cheap wine. In that case, they will also produce upscale wine along with less cost of production. The impact of these changes in the grape market will have a positive impact on quantity traded of domestic goods. It will prove to be profitable for the industry, as it will be based on globally recognized brands. This will in turn lead to more higher-margin premium exports as well as less of cheap products. The supply of grapes will also increase due to advancement of technology that will in turn benefit the suppliers (Stanko, Bohlmann Molina-Castillo, 2013). The model of demand and supply is considered as the greatest contribution of economics to human acknowledgement as it helps to describe the operation of the markets on which it depends. Demand is a schedule that illustrates several amounts of a commodity that customers are willing and able to purchase at a certain price. Changes in demand are likely to cause seasonal variation in the equilibrium price of oil. In other words, desirable change in taste and preferences of the customers will indulge the individuals to demand oil at each price. This will lead to variation in the equilibrium price, as an increase in demand will cause the equilibrium price to increase. The increase in the number of purchasers in the market is also likely to change demand that will affect equilibrium price. With the increase in the number of purchasers, old and inefficient refineries require to reopen in order to match the demand (Bagchi Bhattacharya, 2014). Price elasticity of supply is defined as the relationship between changes in price and quantity. The price elasticity of supply measures the receptiveness to the supply of a commodity after a change in its market price. Shortage will lead to variation of oil prices and it will mostly take place when supply will not equal to demand. This will in turn put upward pressure on the price of oil. Shortage in supply will also lead to shift in the equilibrium market leading towards a higher price point mostly due to restricted availability of supply. This indicates that present market equilibrium at a specified price is not fit for the present supply and demand relationship. This also indicates that the preferred commodity has a low level of affordability by the general public. Both the causes, such as a disease that has killed a large number of pigs and an augment in the cost of grain will lead to decrease in supply. Prices are determined with the help of interaction of demand and supply curve in the economy. Although both supply and demand quantities changes with the help of price, determinants of demand and supply changes either demand or supply, which in turn changes the market equilibrium. Profits from trade are maximized at equilibrium price and quantity. In a free market, equilibrium leads to lowest probable cost that requires to satisfy the highest value demands. However, if the quantity traded of pork is less as compared to its equilibrium quantity, resources will be wasted. As a result, suppliers will supply pork only at the equilibrium price. It can be thus concluded, that by making the use of data on the market equilibrium price as well as total quantity traded of pork over time will not be able to distinguish between the two explanations. A higher price of grain will lead to decrease in supply due to higher cost of production. A decrease in supply will in turn lead to increase in the equilibrium price as well as decrease in quantity traded. On the other hand, if pork is assumed to be normal good, higher incomes will lead to rise in demand. The rise in demand will lead to increase in price of equilibrium as well as quantity traded of pork. The constant interaction between purchasers and sellers will facilitate a price to emerge over time. A price in turn is found to facilitate an exchange to take place. Either a purchaser accepts the price or he makes the purchase. Market equilibrium is also considered as the market clearing price as this price indicates the exact amount that are taken by the producers to the market. Hence, in this case data on market equilibrium and total quantity traded will be able to distinguish two explanations (Balassa, 2013). References Bagchi, S. S., Bhattacharya, S. (2014). Sourcing Decision in a Multi-Period Model under Demand and Supply Uncertainty. International Journal of Information Systems and Supply Chain Management (IJISSCM), 7(4), 50-68. Balassa, B. (2013). The Theory of Economic Integration (Routledge Revivals). Routledge. Silvestro, F., Bak-Jensen, B., Georgilakis, P., Baitch, A., Fan, M., Hatziargyriou, N., ... Petretto, G. (2013). Demand side integration aspects in active distribution planning. In Electricity Distribution (CIRED 2013), 22nd International Conference and Exhibition on (pp. 1-4). IET. Stanko, M. A., Bohlmann, J. D., Molina-Castillo, F. J. (2013). Demand-side inertia factors and their benefits for innovativeness. Journal of the Academy of Marketing Science, 41(6), 649-668.