Chip Shortage Puts the Brakes on Automakers

Chip Shortage Puts the Brakes on Automakers

Deliveries of full-size pickups and SUVs are delayed because of a global chip shortage caused by temporary plant closures amid the pandemic.

This shortage, coupled with port closures that prevented shipments of auto parts from unloading, has further limited truck and SUV production at General Motors and Ford.


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This post is based on the CNN article, Computer chip shortage starting to hit automakers where it hurts, by Chris Isidore, March 22, 2021, and the YouTube video in the Spotlight. Image source: Pavel Kirichenko/Shutterstock

Discussion Questions:

1. How did the chip shortage and auto parts delay affect MRP at General Motors and Ford?

Guidance: Chips and auto parts are essential dependent-demand components in vehicle production at General Motors and Ford.  Supply disruptions of dependent-demand components affect the accuracy of master production schedules, bills of materials, and inventory data because the assumption of constant lead times no longer holds.

2.  How did General Motors and Ford respond to the chip shortage and auto parts delay?

Guidance: General Motors and Ford used their chips on hand to keep Continue reading

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No Longer The Aisle of Lost Toys

No Longer The Aisle of Lost Toys

January 8, 2021

What’s old is new again!  Toy makers have enjoyed strong sales as nostalgic parents remember their own childhood favorites and purchase them for their kids.

By October 2020, sales had climbed 18% year-over-year, driven by classics like Barbie, Legos, Lincoln Logs, Lite-Brite, Hot Wheels, and a host of board games and puzzles.

In contrast to other market segments that have suffered in the pandemic, parents looking for open-ended play options that get their kids off their computers and smart phones are willing to spend on toys to keep them busy.


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This post is based on the Washington Post article, Mattel forecasts holiday season growth as toy demand surges, by Abha Bhattarai, October 29, 2020; the CNBC article, Mattel forecasts holiday season growth as toy demand surges, by Reuters, October 22, 2020; the New York Magazine article, The Holiday Toys to Buy Before They Sell Out, According to Toy Experts, by Liza Corsillo, December 17, 2020; and the YouTube videos in the Continue reading

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Stay-At-Home Improvements Mean Appliance Shortages

Stay-At-Home Improvements Mean Appliance Shortages

December 16, 2020

A surge in home improvement projects and new home construction has created a strong demand for appliances from refrigerators to washing machines. As a result, manufacturers, retailers, shippers, and raw materials suppliers are struggling to keep up with the strong demand.

Amid item shortages, retailers like Lowe’s are shifting from in-store showrooms to direct-to-customer deliveries.


Video Spotlight: 


This post is based on the Business Insider article, Kitchen appliances and washing machines are in short supply as families stuck inside turn to home-improvement projects, by Graham Rapier, October 23, 2020; the Consumer Reports article, How to Get a Deal During the Appliance Shortage, by Tobie Stanger, December 10, 2020, and the YouTube video in the Spotlight. Image source: Corbis/Superstock

Discussion Questions:

1. How does the surge in demand of appliances affect inventory management for manufacturers such as Whirlpool?

Guidance: Appliance manufacturers maintain a low level of inventory to begin with. The level of inventory has remained low despite high production, resulting in order backlog and item shortages.

2.  How does the surge in demand of appliances affect its supply chain?

Guidance Continue reading

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