Oh, Christmas Tree

Oh, Christmas Tree

December 18, 2017

Article Title: Christmas tree shortage’s roots go back to 2008 financial crisis

Author of Article: Meg Oliver

Date of article: December 3, 2017

Source URL: https://www.msn.com/en-us/money/markets/christmas-tree-shortages-roots-go-back-to-2008-financial-crisis/ar-BBG3FuZ

Prices of Christmas tree this year are 5 to 10% higher than last year because of a tree shortage.

Demand for Christmas trees plummeted 9 years ago as a result of the financial crisis causing growers to go out of business or plant fewer trees.  As it takes 7 to 10 years for a Christmas tree to grow, the tree shortage will continue through 2019. There are simply not enough Christmas trees to meet demand, especially for small local tree retailers.

Discussion Questions
1. What are the challenges of demand forecasting for items such as Christmas trees?

Guidance: Discussion may focus on seasonal fluctuations, demand substitution and price sensitivity.

2. What are the components of the Christmas tree supply chain?

Guidance:  Growers → Loggers → Wholesalers → Retailers

3. What are the difficulties facing small retailers in managing their Christmas tree inventory?

Guidance: Discussion may focus on shortage costs, demand uncertainty, and supply uncertainty.