2. You are a strategic planner for Ford Motor Company. Your current assignment i

Question

2. You are a strategic planner for Ford Motor Company. Your current assignment is to examine whether or not the hood and trunk latches should be made in-house instead of procuring them from outside vendors. The latches are basically a small metal assembly consisting of several stamped sheet metal parts and some additional components (springs, bolts, etc.) (15 pts) Discuss some of the reasons that it would be a good idea to make the latches in house Discuss some of the reasons that it would not be a good idea to make the latches in-house. · What are some of the key questions that would have to be answered before a decision could be made? ·

Explanation / Answer

Some of the reasons for in-house manufacturing include quality and control over the quality. Another reason may include the creations of brand images, having a metal latch with company’s own stamp creates a brand values, another manufacturer ‘s stamp often lowers the brand images. This is same as having another brand’s logo on the battery of a mobile phone.

Some of the reasons for not doing it in-house may include the fixed costs associated with them, company’s lack of capability in the manufacturing of the latches as well as the variable costs associated with the latches. If the cost per piece is significantly for the same quality level, the inhouse production may not be a good idea.

Some of the key question many include the following:

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