Submitted by: Submitted by hillcrew7
Views: 10
Words: 953
Pages: 4
Category: Business and Industry
Date Submitted: 07/03/2015 09:17 AM
PROC 5830
Michael D. Hill
THE UNIVERSAL MOTOR COMPANY ACQUIRES SEMICONDUCTORS
The government took drastic measures in order to address serious pollution problems in America. In doing so, the government implemented vehicle emissions standard and mandated that the auto industry comply. This caused the makers in the auto industry some serious problems. Available technology made it difficult for government-mandated standards to b met. Makers in the auto industry was forced to come up with an engine controlled computer which would manage engine efficiency more precisely.
Supply management thought they could meet the demand by using a multitude of suppliers. They did okay for a while, then they started coming up short on supply, on a regular basis. These shortages caused delays in production. More specifically there was delays in the procurement of semiconductors. Semiconductors range from one to three dollars per unit. This one to two dollar unit was causing the delay of production and sales of 20-30,000 dollar vehicles. This was a major problem to the auto manufacturers, but it was treated lightly by the semiconductor manufacturers. Supply management was forced to come up with a better plan.
There are two solutions for dealing with the auto manufacturer's problem that I see.
Solution A:
Add the production of semiconductors to their assembly line.
- Advantages:
This would allow the auto manufacturer the opportunity to eliminate or at least minimize the possibility of stockouts which lead to production disruptions. Production disruptions are absolutely forbidden and should be avoided at all cost in the auto industry. Not only would this solve a major problem for the auto manufacturer, but it would also be an opportunity for an increase in revenue earned. The demand for semiconductors is about to go way up and the auto manufacturer can get in on the cutting edge of the semiconductor industry and sale to its competitors....