Economics

Internet Article/Economic Theories

University of Phoenix

ECO360/Economics for Business I

Amy Green

June 21, 2007

Supply, Demand and Price

In applying economic theories in today’s society is a broad case of reality. One must understand how policies most be carried out effectively to keep valued judgment separate form analysis. A great economist must divide economics into normative, positive and descriptive economics in order to make clear distinctions of his/her objectives. In this paper, I will summarize an article called “A View on Flextronics’ Success”and explain why changes occurred in supply, demand, and price.

Flextronics is reducing supply chain cost and excess inventory to meet the needs of the customer. By continuously becoming more responsive and reacting to the needs of the customer demand, they reduced customer supply chain and avoided tight spots with excess inventory. Flextronics worked with another company, RiverOne Inc., a provider of supply-chain management software manufacturer to develop a new tool called FLEXPASS, to enable them to collaborate with their supply chain partners more effectively. The change resulted in an environment that allowed customers and suppliers to view demand changes, adjust supplies and negotiate prices.

Flextronics considered economic reasoning from the view point of partners and customers. This company made a choice that could be influenced by economic forces. Personal choices falls along the lines of microeconomic, a theory that considers economic reasoning that builds up from the decision to an analysis of the entire economy. By working to understand the business process, Flextronics were able to make up the supply chain interactions with their customers. The FLEXPASS has provided value by enhancing customer relationship while avoiding unnecessary cost. This type of business decision results keeps the economy from having to result into macroeconomics that lead to economic problems such as...