Chapter 2 Blog- Demand and Supply

http://ca.news.yahoo.com/s/capress/091013/business/noveko_1

Summary
The article I read about states that hand sanitizers and masks are in high demand. These masks and sanitizers are used for protection from the H1N1 virus. Because of the high demand of masks and sanitizers, Noveko International Inc. is trying to make enough to supply the demand, while still competing with other companies. At the end of September, there were about 50 million masks that were ordered from firms. By 2010, Noveko expects that about order of 50 million masks and sanitizers will be placed. Around nine million masks are made per month and Noveko is hoping to increase the production of the masks. The company also have other competitions such as 3M, Kimberly-Clark, and Johnson & Johnson. Noveko’s masks are made with “antimicrobial air filtration”. These masks can trap, and then neutralize the bacteria and viruses unlike other masks. If they do not supply enough masks, then consumers will then buy from other competitors.

Connection
Chapter two of the textbook concentrates on the supply and demand and the factors that can change the supply and demand. This article talks about what can happen when the company does not supply enough masks and sanitizers for those who want to protect themselves from the H1N1 virus. If Noveko cannot produce enough of these masks, then consumers will find a substitute product. In the article, it mentions that the materials used to make the masks are from the United States and then the masks would be created in China. This clearly shows that production cost is affecting the supply. If the supplier of the materials were to increase the price, then it may influence the price of the masks.

Reflection
In this article, it makes me more aware of how factors in supply can have an effect on other competitors’ products such as the fact that there isn’t enough supply of the masks to go around, consumers will be willing to find substitutes. Because they are not supplying enough masks and sanitizers to meet the demand of the world, then they will be losing some finance. The demand of the masks will probably go down because there are not enough and consumers may just settle for the competitors’ brand even if their masks do not have the technology to neutralize the bacteria and viruses. I feel that Noveko International Inc. should find a solution to the high demand of their products, while their supply is not enough to meet the number of people requesting the products. By solving the problem, consumers will be satisfied and won’t have to settle for substitutes.