Thursday, 24 October 2013

Supply


Change in quantity supplied is a movement along the supply curve to a new point due to a change in price.

Change in supply is a shift of the supply curve when a determinant other than price changes.


Starbucks is warning of a threat to world coffee supply because of changing climate. According to Jim Hanna, Starbucks sustainability director, said its farmers were already seeing the effects of climate change, with severe hurricanes and more resistant bugs reducing crop yield (The Guardian, 2011). If the condition continues as they are then is a potentially significant risk to the supply chain, especially the Arabia coffee bean. If Starbuck is lack of coffee bean (raw materials), then it has to decrease its supply. Hence the supply curve will shift inward from S1 to S3 at Graph 6.

Graph 6: The Shift of Supply Curve (2012)

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