However, in this case there are complications because health insurance is not a product best described with a simple supply and demand model.

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By supplying algorithms to balance all the variables of a supply chain, such as product prices, stock levels and customer demand, they are following in the footsteps of i2, the market leader in supply-chain management.

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One chapter, "The Fallacy of Supply and Demand, " focuses on how the initial price of a product can have an undue influence on what people are willing to pay.

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When prices for commodities rise, it is usually because of either a change in the cost of bringing the product to market (increasing fuels could do that), the cost of capital, or an imbalance between supply and demand.

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