5 ms·
Given you can't predict what the shock will be or its consequences, how are you exactly going to create a buffer? Creating broad redundancies would result in lo
by fny 5y ago
Given you can't predict what the shock will be or its consequences, how are you exactly going to create a buffer? Creating broad redundancies would result in lots and lots of waste both damaging to a bottom line and the environment.
Also, is this "fragility" really that big of a problem? Sure, prices are going to move up 20-30% for a year or two until the supply chain issues ease, but is that worth driving up costs for decades preparing for potentially the wrong issue?
- keoqpkk 5y agoWe don't really put a price on environmental and societal damage that "just-in-time" does (thinking of truck drivers living on the highway effectively acting as the warehouse, saving the company to build an actual warehouse). If we did, more robust models might be financially attractive too.
- yunohn 5y agoI’m quite certain that replacing truck drivers with AI drivers would save the environment more than building even more warehouses.
- bluGill 5y agoWhat is the environmental damage from making something not needed? There is a lot of energy in window glass, refined iron,and all the other parts of a car.
- labawi 5y agoYou could order adequately, then build and sell those cars or whatever you're making, instead of throwing the parts away. But then, you couldn't change models as swiftly, and need to sell a lot of last year's models.
- toomanydoubts 5y ago>prices are going to move up 20-30% for a year or two I have never ever in my whole life seen prices going down after they have gone up. Ever.
- wiz21c 5y agooil price do that all the time: up, down...
- ComputerGuru 5y agoYes, publicly traded commodities do all the time because it means there are temporary inefficiencies in the system that can be arbitraged to turn some profit, until they converge at the “correct” price for some period of time. But GP is correct, products typically don’t come down in pricing. Consumable goods are more elastic in a free market absent collusion, but finished honest-to-god products have a well-known price stickiness problem. (The price will come down, but rarely back to what it was.) Typically the only way that cycle is broken is when the product itself is obviated/supplanted by a replacement (eg an iPhone will never get cheaper but some new phone may come out that is cheaper and everyone moves to it). These are all obviously generalities though.
- scheme271 5y agoBut they tend to do if there's a temporary price shock. Think hard drives after the thailand floods or gpus during and after a cryptomining boom/bust cycle. Or used car prices after the cash for clunkers bill.
- wmf 5y agoStickiness seems to apply to MSRP which has mostly not gone up.
- Zanni 5y agoI'm surprised you mentioned iPhones, because that's exactly Apple's strategy. They tend to keep three generations around, and each time they introduce a new iPhone, they knock down the price of the previous generations. Here's [0] an article on them reducing the price of the iPhone 8 by $150 (from $559, so a significant cut of 25%) when they introduced the iPhone 11. [0] https://venturebeat.com/2019/09/10/apple-cuts-iphone-8-and-iphone-xr-prices-by-150-kills-iphone-7-and-iphone-xs/ https://venturebeat.com/2019/09/10/apple-cuts-iphone-8-and-i...
- dharmab 5y agoToyota has this figured out. After the 2011 quake they built a system to identify critical, difficult to replace parts in their supply chain and size buffers for those parts. Any they aggregate demand over larger time intervals than other manufacturers. They lasted 18 months into the pandemic shortages before they ran their buffers dry.