What problems are created by seasonal demand?

Question

What problems are created by seasonal demand and how does this effect the economy?

Answer 1

Inconsistent financial reporting when demand peaks or valleys.

Answer 2

For the company, to have seasonal demand means they have to staff for the 'peaks' and 'valleys'.  That means having to hire more staff before the peak of the season, and then lay them off.  Hard to keep good employees.  This also puts a drain on cash flow (companies have to spend more to support the costs (labour and materials) during the peak season).

The impact on the economy is that you will see unemployment rates rise and fall with the busy and slow seasons - not good for other businesses who count on people having jobs and being able to afford to buy their products and services.  

The best type of business environment is when the demand is smoothed out and grows gradually - easier for the business to manage and support.