This doesn't only apply to toilet paper either, but other basic items.
I heard a discussion on a financial podcast that there are two streams--commercial and consumer--and that the two streams do not cross. So while there is plenty of commercial grade toilet paper and never had a shortage there (the thin, scratchy stuff), there was a shortage in the consumer toilet paper.
The economics of this are--of course--all about maximizing profit. There is no huge warehouses across the country filled to the brim with consumer toilet paper because they know exactly what demand is going to be, because the profit margins are thin, and because they produce pretty close to what that demand is.
And then things go to hell, hoarders buy all the toilet paper, and others are left scrambling. Not only for a week or two, either.
There is a similar supply chain for food. The story I heard was about a butcher who bought fish for his shop from a company that provided seafood to restaurants, and when the restaurants all closed, this company closed up, too, and the butcher couldn't get any fish either.
This made me wonder is it really more economic to have two supply chains? One only dealing with commercial entities and one only for consumers? What about in a crisis situation, like with the virus? We needed greater capacity on the consumer side and businesses were unable to pivot. Or perhaps unwilling to pivot because it probably would cost them money to retool commercial to consumer and no one knows how long they'd need to do so.
It seems like there must be a better way to do this so that the system can absorb occasional shocks without the complete toilet paper meltdown we experienced. Of course, a couple of entry level econ classes don't give me the inside scoop on this. :-)
