Final answer:
Supply chain disruption, evidenced by the COVID-19 pandemic effects on business closures and market instability, can significantly impact international trade and market economies. to manage such disruptions, companies can diversify their sources, manage inventory, and create risk management strategies. understanding demand and supply shifts are crucial in adjusting business approaches.
Step-by-step explanation:
Understanding Supply Chain Disruption:
The concept of supply chain disruption is a critical issue in the business field, particularly under the lens of sourcing decisions. an example that significantly highlights this disruption is the impact of the COVID-19 pandemic on international trade and markets. during the pandemic many businesses faced closure due to various shutdowns leading to a domino effect wherein supply chain issues emerged further straining business operations. this resulted in slower production and increased prices as both products and raw materials could not be transported quickly enough to maintain a stable market. supply chain disruption can severely harm businesses especially those providing goods to areas that cannot produce their own.
Companies can take several steps to manage these disruptions, including diversifying their supply base, increasing inventory levels for essential components and developing a robust supply chain risk management plan. By understanding the factors affecting demand and supply businesses can evaluate the economic changes they may face and adjust their strategies accordingly.