Effects of COVID Crisis on Firm's Production and Global Impact

This report discusses the effects of COVID crisis on firm's production and global impact. It covers topics such as aggregate demand, aggregate supply, safety measures in franchise, and more.

Managerial
economics

TABLE OF CONTENT
Introduction................................................................................................................................................3
Aggregate demand.............................................................................................................................3
Aggregate supply...............................................................................................................................4
EFFECTS OF COVID CRISIS ON FIRM’S PRODUCTION..........................................................4
GLOBAL IMPACT...........................................................................................................................6
SAFETY MEASURES IN FRANCHISE..........................................................................................6
Conclusion.................................................................................................................................................7
References..................................................................................................................................................7

Introduction
Demand is the quantity of consumers who are eager and capable to pay the
price and able to buy the products at different prices during a given period of time. It
implies consumers desire to acquire the commodity, the willingness and ability to pay
for it. Aggregate demand is the total amount of demand for the finishes goods and
services produced in the economy. It is expressed as the full measurement of money
which is exchanged for the commodities at a particular price and point of time.
Supply is the amount of the resource that company,manufacturers, labors or other
economic agents are willing and able to provide the commodity in the marketplace or
to an sing;e individual.Aggregate supply is known as the total amount of products
which are supplied by the supplier within an economy at a given overall price in a
given period. In this respective report of Mc donald, there have been changes in
demand and supply due to Covid crisis which affected the market very rapidly due to
high number of cases rising all around the world(Haider, Singh and Sultana, 2021).
Aggregate demand
McDonald’s corp reported a bigger than expected drop in global same stores sales as
the burger chain’s restaurants across the world were shut because of COVID19
pandemic, limiting operations to only drive-thru and delivery. Also in united states the
franchise operates more than a third of the restaurants, the demand of the food
decreased as people were not allowed to go out as thee was a strict lockdown all over
the world and the franchise is all spread-ed in world basis and is the most favourite
franchise in India of youth and the burger that this McD provides is the best over all,
this is also proved through the study. The franchise have been struggling to cope with
the changing dynamics and consumer behavior around the health crisis, forcing them
to simplify menus and shift largely to online and mobile orders for pickup, deliver and

drive-thru. To help drive its recovery, McDonald's, like many other U.S. restaurant
chains and retailers, said face coverings would be mandatory at its stores in the United
States and employees would offer one to anyone entering without a mask.
Aggregate supply
Due to covid crisis the world is going to look markedly different. The supply of Mc
Donald shocks start in china in February and the cases of covid were rising with so
many numbers in china so, due to high cases in china people were scared to eat the
food which is made outside and different people, they were at a stake that if they will
have food from theses chains they might catch covid and that can ruin their life. So
the supply of the goods of this company was falling down as people are certainly not
inclined to the food which is provide by Mc donald. Temporary trade restrictions and
shortages of material, essential requirement and other products highlighted their
weaknesses. Covid had a great hype all over the world and due to the hype the
material that is needed to make the burgers and other delicious food also the workers
who are working in the firm are also not getting paid as the supply is low so the
revenues are also getting affected(Huang, Lei Wang and Xing, 2021).
EFFECTS OF COVID CRISIS ON FIRM’S PRODUCTION
 Processing has been disrupted by labour shortages and shutdowns:COVID-
19 has led to disruptions in food processing industries, which have been affected
by rules on social distancing, by labour shortages due to sickness, and by
lockdown measures to contain the spread of the virus. In confined spaces such as
packing plants for fruits and vegetables or meat processing facilities, necessary
social distancing measures may reduce the efficiency of operations and there is a
need to ensure adequate protections for employees. Many firms have also
reported high rates of worker absences; for example, staff availability was
reduced by up to 30% in French meat processing facilities in the regions of the
country worst hit by COVID-19.

 Yet food supply chains in the developed world have largely been remarkably
resilient to date: Supply chain actors also expanded the use of new delivery
methods such as “click and collect” services and online sales. Farmers started
using digital technologies and platforms to sell their produce directly to
consumers. Restaurants switched to providing take-out and delivery, with some
offering grocery-like services (e.g. pizza base rather than prepared
food). Initiatives also emerged to link farmers and restaurants directly to food
banks.
Some bottlenecks remain and require attention: While food systems have shown
remarkable resilience and many problems have been resolved, some bottlenecks
remain and require attention from policy makers. A first bottleneck relates to the
availability of inputs for farming, notably labour for harvesting fruits and vegetables.
A second relates to plant shutdowns in the food processing sector, notably in meat
processing. A third relates to the ongoing disruption of air freight, which affects high-
value perishable products, again notably fruits and vegetables. What these bottlenecks
have in common is that they are difficult to overcome in the short run. As the
COVID-19 pandemic spreads in Latin America, home to important global suppliers,
new risks to global food supply chains may also be emerging(Jegers, 2021).
 Policy lessons so far:While the impacts of the pandemic on food chains are still
unfolding, several lessons have emerged. Open and predictable markets have
been critical in order to smooth distribution of food along supply chains and to
ensure it can move to where it is needed. Diversified sources of supply have
allowed firms along the food chain to adapt rapidly when specific input sources
were compromised by transport or logistics disruptions. Finally, meeting the
needs of vulnerable groups requires attention to food access, such as by ensuring
targeted, flexible safety nets.
WHO's 'Strategic preparedness and response plan' details the health measures that all
countries were required to take in order to prepare for and respond to the pandemic.
This plan takes into account what we've learned so far about the virus and intends to
turn that knowledge into strategic action that will guide all national and international
partners as they construct national and regional operational strategies. Priority stages
and actions are described in eight primary topics in this plan:Coordination, planning,
and monitoring at the country level:
 Risk communication and community participation

 Surveillance, quick response teams, and case investigation
 Entry points
 National laboratories
 Prevention and control of infection
 Situation management
 Operational support and logistics
Agricultural production, post-harvest direction, processing, distribution/retail/service,
and consumption are the five steps of the food supply chain. In the food supply chain,
there are two food quality and safety strategies in use. The first is based on regulations
and legislation that employ mandated criteria that are scrutinised by government
bodies(Wei, C., 2021). The second option is to rely on voluntary standards established by
market legislation or international treaties. Food employee health issues, personal
hygiene, use of personal protective equipment such as helmets and gloves, sanitation
of surfaces and working environments, safe handling/preparation/delivery of food,
and maintaining social distance are all examples of safety measures to ensure the
continuity of food flow in each stage. In the last phases of the process, protective
measures are taken.
GLOBAL IMPACT
The free-market, just-in-time logistical systems common in industrialised areas are
very good at dealing with disruptions in one place or sudden shortages of one
commodity, but they are more vulnerable to systemic shock because there is no slack
in the system and no supply reserves to fall back on, according to global food security
expert Peter Alexander of the University of Edinburgh(Wilkinson, 2021).
There was panic buying in several regions, resulting in shortages. Some products'
supply chains were disrupted; for example, many hand pumps for hand sanitizer
bottles are imported into the United States from China and were in limited supply. In
most cases, normal resupply occurred in the United States, but panic buying, which
resulted in empty shelves, fueled consumers' need to stock up.

SAFETY MEASURES IN FRANCHISE
Because of the alarming rise of COVID infections among those working in the food
industry, it was critical to ensure the safety of those handling and delivering food.
Excellent manufacturing practises (GMP) and good hygiene practises become
mandatory for food operators and personnel (GHP). Food manufacturers are
continuing to use food manufacturing practises (FMP) that comply with international
food safety regulations. People, premises, processes, products, and procedures are all
focused on to maintain consistency in the quality and safety of food products, as well
as attempting to follow basic personal hygiene norms like as hand washing, sanitizer
use, and social distancing requirements(William and Stephen, 2021).
Conclusion
In this respective report, it can be concluded that During a pandemic, maintaining
supply in the agriculture and food sector, which is one of the most essential sectors
alongside health, is critical for avoiding a food crisis and minimizing the negative
impact on the global economy. Despite the fact that no serious issues have been
identified in the food supply chain thus far, the future remains unknown. As a result,
each country must recognize the gravity of the situation and may need to tighten or
loosen restrictions in response to the pandemic's progress. The food supply chain's
supply network should also be flexible enough to adjust to difficulties.
References
Haider, I., Singh, H. and Sultana, N., 2021. Managerial ability and accounting
conservatism. Journal of Contemporary Accounting & Economics, 17(1),
p.100242.
Huang, D., Lei, L.G., Wang, M. and Xing, Y., 2021. Managerial Extrapolation: Who
and When?. Available at SSRN 3884059.
Jegers, M., 2021. Donations and the Overhead Ratio Are Related Even When Donors
Do Not Bother About Efficiency. Nonprofit and Voluntary Sector
Quarterly, p.08997640211013894.

Wei, C., 2021. ESSAYS IN MANAGERIAL ECONOMICS (Doctoral dissertation,
Purdue University Graduate School).
Wilkinson, N., 2021. Managerial Economics: Problem-Solving in a Digital World.
Cambridge University Press.
William, F.S. and Stephen, G.M., 2021. MANAGERIAL ECONOMICS. John wiley.