Medium-sized semiconductor fabrication plant

Assignment Help Operation Management
Reference no: EM132888161

MGT Semiconductor Co. is a medium-sized semiconductor fabrication plant in Mountain View, California. The company has been in business for over 20 years, mainly producing computer chips for auto industry that are sold exclusively through its distribution network across the United States. Through the years, it has been gradually expanding its production capacity and consumer base. However, over the past 9 months, the company has been faced with an unprecedented and unanticipated increase in demand, which has cleared out all its storage facilities and exceeded its manufacturing capabilities. At this time, the demand continues to be extremely high.

The company has an existing storage facility specifically designed for long-term storage of unused chips (controlled climate, humidity, dust, etc.), which can be converted to a new production line. The new production line would increase the existing manufacturing capabilities by 50%. However, this would require a substantial investment in remodeling of the facility and purchasing of expensive equipment from a producer in Tokyo, Japan. To proceed with this option, it would be also necessary for MGT Semiconductor Co. to obtain a loan from a bank and hire additional staff. It is estimated that it will take at least 15 months for the new production facility to start producing.

MGT Semiconductor Co. leadership is faced with a dilemma. If they don't expand the current capacity, they risk losing the market share to competitors that are more flexible in adapting to higher demand. At the same time, the expansion is very costly and the long-term demand is uncertain.

You are hired by MGT Semiconductor Co. as a consultant to help make the right business decision and to come up with an action plan.

Part A Question:

How would you recommend for MGT Semiconductor Co. to proceed? Should it stay with the same production capacity or increase it as described above? Based on the knowledge acquired in the course, please provide a detailed explanation of the rationale for your recommendation. Please describe potential challenges MGT Semiconductor Co. could be facing as a result of your recommendation. State the challenges and explain how you would recommend MGT Semiconductor Co. to address each of those challenges.

Part B Question:

As an alternative to internal expansion, MGT Semiconductor Co. was just presented with an option to acquire a small-sized semiconductor company overseas. While this acquisition will allow MGT Semiconductor Co. to increase its existing manufacturing capabilities by 50% in just 4 months, it will be drastically more expensive than converting an existing storage facility to a new production line.

Should MGT Semiconductor Co. consider this acquisition project? Please base your recommendation on the analysis of the triple constraint and provide a detailed explanation of the rationale for your recommendation.

Reference no: EM132888161

Questions Cloud

About how leadership effectiveness : Literature review needed on 10 scholarly articles about how leadership effectiveness relates to organizational performance
Strategic development and strategic operations : Demonstrate your understanding of the theory and practice of Strategic development and Strategic operations.
Global supply chain management and international logistics : This wide-ranging book within global supply chain management and international logistics has now reached the final chapter.
Characteristics of successful leader of organization : What are some characteristics of a successful leader of an organization, division, or department? What do followers expect from a leader?
Medium-sized semiconductor fabrication plant : How would you recommend for MGT Semiconductor Co. to proceed? Should it stay with the same production capacity or increase it as described above
Formal and informal communication : Distinguish between formal and informal communication in the workplace.
Create strategic objective for the company : Create a strategic objective for the company. Create short- and long-term goals for achieving the company's strategic plan.
Person professionalism or credibility : Discuss an example you have experienced where a person's professionalism or credibility was called into question by mistakes in their communication
Evaluate which of sources and risks : Evaluate which of the sources/risks above with which Cooper Manufacturing is involved. Explain the amount of risk associated with each.

Reviews

Write a Review

Operation Management Questions & Answers

  Major purposes served by after-the-fact project evaluation

What are some reasons that a failing project might still not be terminated? What are the major purposes served by an after-the-fact project evaluation?

  Identify an ethical problem the business has encountered

Identify an ethical problem the business has encountered. Discuss policies and procedures appropriate for this business that would support the code of ethics.

  Use social media to enhance their careers

This week we discussed how professionals can use social media to enhance their careers.

  What elements of bargaining failure might have contributed

The BBC ran a documentary last night about the decision of the U.S. and Britain to go to war with Iraq in 2003. What elements of bargaining failure might have contributed to this Iraq war?

  Discuss the purpose and guiding principles of new venture

As your company grows, how will you ensure that the vision remains viable and binding?

  Discuss the best fit of the multinational firm to its world

discuss the best fit of the multinational firm to its worldwide industry environment and the changing role of central headquarters as an organization expands into other countries.

  Authority will be accepted by subordinates

What four things should managers do to ensure that their authority will be accepted by subordinates?

  Costs of goods sold-inventory

Tech Company is a medium-sized consumer electronics retailer. The company reported $155,000,000 in revenues for 2007 and $110,050,000 in Costs of Goods Sold (COGS). In the same year, Tech Co. held an average of $20,000,000 in inventory. How many time..

  What is the total cost with the discount

What is the total cost without the discount? What is the total cost with the discount?

  Organizational policies that mandate pay secrecy

What are the advantages and disadvantages of organizational policies that mandate pay secrecy?

  What do you think about the fair use law in terms of books

Define the fair use law and how does it relate to students? What do you think about the Fair use Law in terms of books?

  Discuss about the relationship between business and politics

Discuss about the relationship between Business & Politics? Be sure to provide a link to an article or video to support your rationale.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd