Week 2
- Submitted by: amandasigmund
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- Category: English
- Date Submitted: 05/11/2013 07:31 PM
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Market Equilibrating Process
Amanda Sigmund
University of Phoenix
ECO 561
May 4th, 2013
Introduction
The market equibilbrium is basically, a case where both the supply of a specific item or service is exactly equal to its demand. (Investopedia) With market equilibrium the price of services and items stays constant because there is never a shortage nor surplus in this market. Examined below is an example of JMS Recycling's market of copper scrap metal. JMS Recycling is the company I currently work for.
Real World Experience
In the scrap metal recycling industry, scrap copper has a very large marekt. From mills who create new pipes to other mills manufacturing copper sheeting, it is evident there is a great need for this precious metal. Currently, JMS Recycling ships copper out of its facility on an every other week basis. Since the amount of weight brought in of scrap copper for a two week period, is approximatly 10,000 - 15,000 pounds, different types ofmetals are shipped at the same time to cut down on fuel expenses. The mills that JMS Recycling takes its copper metals to also has a minimim requirement of 7,000 pounds. Anything less than 7,000 pounds per load is unaccepted.
In an equilibrium, JMS Recycling would ship its copper metals only once a month. The company would have 20,000 per month to sell to the mill. Anything less would put JMS Recycling at risk for a smaller price paid from the mill since they base their prices off the more material you are able to sell. Any pounds in excess of 20,000 per month would be more than the mills maximim tonnage where the price levels out. At more than 20,000 pounds per month, JMS Recycling would also have to ship more than one load a month since their truck would be
overweight.
Customer Impact
The customer impact on this supply and demand situation is quite interesting and very important. If JMS Recycling is needing an equilibrium of 20,000 pounds of copper per month they would have...
Amanda Sigmund
University of Phoenix
ECO 561
May 4th, 2013
Introduction
The market equibilbrium is basically, a case where both the supply of a specific item or service is exactly equal to its demand. (Investopedia) With market equilibrium the price of services and items stays constant because there is never a shortage nor surplus in this market. Examined below is an example of JMS Recycling's market of copper scrap metal. JMS Recycling is the company I currently work for.
Real World Experience
In the scrap metal recycling industry, scrap copper has a very large marekt. From mills who create new pipes to other mills manufacturing copper sheeting, it is evident there is a great need for this precious metal. Currently, JMS Recycling ships copper out of its facility on an every other week basis. Since the amount of weight brought in of scrap copper for a two week period, is approximatly 10,000 - 15,000 pounds, different types ofmetals are shipped at the same time to cut down on fuel expenses. The mills that JMS Recycling takes its copper metals to also has a minimim requirement of 7,000 pounds. Anything less than 7,000 pounds per load is unaccepted.
In an equilibrium, JMS Recycling would ship its copper metals only once a month. The company would have 20,000 per month to sell to the mill. Anything less would put JMS Recycling at risk for a smaller price paid from the mill since they base their prices off the more material you are able to sell. Any pounds in excess of 20,000 per month would be more than the mills maximim tonnage where the price levels out. At more than 20,000 pounds per month, JMS Recycling would also have to ship more than one load a month since their truck would be
overweight.
Customer Impact
The customer impact on this supply and demand situation is quite interesting and very important. If JMS Recycling is needing an equilibrium of 20,000 pounds of copper per month they would have...