Immediate Run

The immediate run refers to a time period that is too short for a business to respond with operating changes in view of changes that occurred in the market or industry as a whole.

This is in contrast with the short run and long run.

Immediate runs are often a reason that causes companies to fail suddenly without warning, leaving the industry in shock.

This has even occurred with billion-dollar companies.

Immediate run problems are often faced by businesses that create products that require a diverse set of inputs.

For example, a food manufacturer for schools might need various different types of ingredients sourced from different suppliers in order to prepare the food for delivery. For some reason, the schools were ordered to immediately suspend classes for a week due to an outbreak of a virus. But the manufacturer has already ordered the perishable ingredients and cannot return them. This immediate run would result in devastating losses incurred by the company.

There was simply insufficient time to respond decisively to sidestep the problem.

If it was given notification of the school closure a week in advance, the company would be able to avoid the catastrophe that ensued by not ordering the ingredients.

A sudden ban of e-scooters on footpaths for example, would create an immediate run that give businesses and couriers no time to make adjustments. E-scooter retailers and repair shops might even go bust overnight.

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