Question: Allstar 3 0 0 0 is a medium - sized semiconductor fabrication plant in Dallas, Texas. The company has been in business for over 2
Allstar is a mediumsized semiconductor fabrication plant in Dallas, Texas. The company has been in business for over 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 four years, 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 longterm 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 However, this would require a substantial investment in remodeling of the facility and purchasing of expensive equipment from a producer in Seoul, South Korea. To proceed with this option, it would be also necessary for Allstar to obtain a loan from a bank and hire additional staff. It is estimated that it will take at least months for the new production facility to start producing.
Allstar leadership is faced with a dilemma. If they dont 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 longterm demand is uncertain.
You are hired by Allstar as a consultant to help make the right business decision and to come up with an action plan.
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