Universal

Statement of the Problem- The Universal Motor Company had to acquire new semiconductors. The company does not have enough technology to be up to par with the automobile industry and now the company is faced with the decision to make or buy the semiconductors.

Background- Universal was one of the largest manufacturers of automobiles and trucks. In the 1970’s the government began addressing the air pollution problem. The government came up with a way to help the problem of pollution. The government came up with the idea of establishing vehicle emissions standards and corporate average fuel consumption targets for vehicles sold in the United States. This is when Universal came into the problem that the tried and true methods of supplying stampings and plastic injection molded parts were not getting satisfactory results when applied to the procurement of semiconductors.

Discussion- The major problem for the Universal Company is that the technology the company posses now is not up to par to what they will need to make the semiconductors themselves. For Universal to make the semiconductors themselves it will cost them two to four times as much as it would if Universal bought from suppliers. At the same time the suppliers are causing the main issue right now. The suppliers are not reliable and do not care about Universal and the automobile market in the first place. The suppliers also do not care about quality, so there for Universal can not rely on them to help the company in sales.

Recommendations- (1) Universal should make the semiconductors themselves and see for them for the price the market is going for. (2) Update technology with new equipment and problem solutions that Universal can use in the future. (3) If the company makes the semiconductors with good quality that consumers are pleased with, Universal can over take the market and have a competitive advantage over other company’s. (4) After Universal gets the quality of the semiconductors up and have the...