SUPPLY, DEMAND AND MISALIGNMENT
Almost every year, around Christmas, some news story is written about some "must-have" toys that, mysteriously, seem to not be available for the hundreds of frantic parents who promised the toys to their kids. The results are predictable -- long lines for the few toys remaining, fights breaking out among crowds and, in the end, parents having to go on eBay to pay a higher price for the toy. This demand/scarcity model, interestingly enough, is also a good example of problems that occur when supply and demand aren't aligned properly. In the case above, it's the end user (i.e., the customer) who suffers from the lack of supply. But what happens on the logistical side of supply and demand aren't properly aligned? For one thing, if there is too much supply for slowing demand, logistics personnel end up with more empty space in their cabs, or planes. On the trucking side, empty cab trailers mean more expense for the shipper (Logistics Today, 2008). The reason behind this is that too much supply and too little demand lead to something called "less-thantruckload," or LTL (Logistics Today, 2008). But LTL carriers need to keep rates in line with their increasing costs -- meaning they might implement a separate surcharge that is based on a percentage of revenue (Logistics Today, 2008). But what happens when there isn't much supply for ever-growing demand? Again, the logistics transporters can charge an extra fee. This is because more equipment is being used to transport something to market in a more timely fashion. Logistics transporters basically have the upper han