2011-01-19

What happens during inflation

A supply disruption can happen anytime, but when it happens during inflation, the results can be spectacular.
The recent disappearance of a popular tampon brand is really cramping the style of city women.

Drugstore shelves have been mysteriously empty of o.b. nonapplicator tampons since late fall, leaving the feminine hygiene product's devotees puzzled and peeved.

The popular product is in such short supply that eBay users are bidding up to $76 for three packs, which usually sell for just $8.79 a pack.
Women searching far and wide for o.b. tampons after they mysteriously disappear from store shelves

Another source says prices hit $130 a box, or $3 per tampon.

An explanation comes from an article in the New York Times: Can Johnson & Johnson Get Its Act Together?

In brief, the McNeil Consumer Healthcare division has had quality control problems and was forced to recall all manner of products. During a period of serious inflation, shortages occur due to hoarding and more importantly, distortions in the economy caused by misleading price signals. Should inflation become a serious problem, this tampon story will be repeated over and over with various products.

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