Question: Critically analyze the attached post about Tesla Recall, then outline what you learned from it and state the benefits or potential issues on the topic.

Critically analyze the attached post about Tesla Recall, then outline what you learned from it and state the benefits or potential issues on the topic.

Critically analyze the attached post about Tesla

The first major cost for Tesla in this recall is obviously the financial cost. Analysts at Guidehouse Insights estimated a $200$250 million cost just for this recall alone (Elliot, 2021). With the problem affecting roughly 158,000 vehicles, this recall poses a significant financial strike against Tesla (Elliot, 2021). Although there are sometimes recalls in the automobile industry that consist of millions of vehicles, this is a large portion of Tesla's vehicle base since its base is not nearly as large as companies such as Ford and Chevrolet (Elliot, 2021). For a recall, the financial cost can come from obtaining the vehicles, obtaining the parts for them, fixing them, releasing them, and then counting for the money lost focusing on them instead of new production. Another cost is its reputation for quality, which is now slighted by the malfunctions. This, in turn, could cost the company future sales or make buyers less enthusiastic to buy. The third major cost is time. By working on the recalled vehicles, the priority of newer vehicles in the production line is lessened so that the company can focus on making sure the vehicles that are already in customer hands are working effectively. The cost of quality for this recall can be explained by the external failure costs. The book defines external failure costs as costs that occur after the delivery of defective parts or services, or in this case, recalls (Heizer et al., 2022). The problem is these costs are difficult to quantify since they happen outside of the controlled environment of producing the product (Heizer et al., 2022). Essentially, these costs occur once the products are in the customers' hands. The reality is that the defects can accumulate with varying degrees of customer usage, maintenance, and overall care. For instance, some Tesla customers may take really good care of their vehicle, whereas some may not. In this case, some customers may be heavily loading their memory chips with data while others may not. The storage overload is what caused many of these issues (Elliot, 2021). Tesla cannot necessarily predict all these variables since they are external, but they still had $200$250 million in recall costs to take care of. Reliability is different than maintenance because reliability is defined as the probability that a machine will function the way it is supposed for a certain amount of time under specific conditions, whereas maintenance involves all activities involved in maintaining the capability of a system (Heizer et al., 2022). In the automobile industry, the responsibility of these two factors is in different hands. Reliability is the responsibility of the manufacturer, whereas maintenance is the responsibility of the customer. Once the vehicle is in the customer's hands, it is his or her responsibility to have it maintained. Assuming they take care of it, the vehicle should perform the way it is supposed to. For the manufacturer, the reliability of their vehicle is measured on the assumption that it will be properly and routinely maintained. Obviously if the customer does a poor job of this, the vehicle has a higher chance of experiencing issues. However, if the customer maintains the vehicle, they should be able to depend on its expected reliability for a certain amount of time. In the Tesla instance, the customers most likely did not expect for their vehicles to experience the defects that were shown, at least in the short time frame that they were experienced in. There may have been less of an outrage if the defects were occurring within 1012 years instead of 56 years

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!