Question: In March 2 0 0 0 , lightning hit a power line in Albuquerque, New Mexico. The strike caused a massive surge in the surrounding
In March lightning hit a power line in Albuquerque, New Mexico. The strike caused a massive surge in the surrounding electrical grid, which in turn started a fire at a local plant owned by Philips Electronics and damaged millions of microchips. As a result, the mobile phone company Ericsson, which purchased the microchips from Philips and had no alternative source, encountered production problems that lasted for months and caused a loss of $ million in sales. If Ericsson had been using inhouse manufacturing, which advantage would have helped them in this scenario?
a When components and raw materials involve intellectual property, making affords complete protection of the intellectual property.
b Making components and raw materials inhouse allows the company more control over deliveries.
c Inhouse production is advantageous because it secures the supply source.
d Inhouse sourcing is sometimes the only option for components and raw materials that are scarce, highly specialized, or particularly of national security concern.
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