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Supply Chain Management:
Managing Price Inflation
presented by Dr.
Darren Prokop,
Professor Emeritus of
Logistics, University
of Alaska Anchorage.
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What is supply chain management?
It is the linkage of
organizations in order to
meet some strategic goal.
Linkages could be
achieved through
contractual relationships
or through mergers
and acquisitions.
Linkages could be more
informal and involve
a joint venture
or strategic alliance covering
a more limited
business activity.
In any case the intent of
supply chain management
is to foster
trusting relationships
whereby the partners
are more valuable
together than apart.
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What is price inflation?
Abbreviated as
simply inflation,
it means a rise in
the price of an item
over some period of
time. It is like a balloon
expanding in size.
If the rate of inflation
falls for example,
the inflation rate
in January was 7%
and in February it was 6%
it is called disinflation.
It is like a balloon
expanding in
size but at a reduced pace.
If the rate of
increase is negative
i.e. the price is
actually falling over
time, it is called deflation, in
this case the balloon
is reducing in size.
Of course many
prices rise and fall
all the time as best seen with
commodities traded
in world markets
such as crude oil, natural gas,
gold, aluminum,
wheat, sugar etc.
Inflation is particularly
problematic for
businesses and the general
public when it affects
prices over a wide
range of markets for
raw materials, subassemblies,
final goods and services.
Why? Because it is hard to
