1. Major Facts/Major Problems:

 The Universal Motor Company is one of the world’s largest manufacturers of automobiles and trucks.
 In 1980, purchase content was 65 percent of the cost of goods sold.
 During the late 1970s, the U.S. government began addressing the air pollution issue by establishing vehicle emissions standards and corporate average fuel consumption targets for vehicles sold in the United States.
 The U.S government-mandated standards could not be achieved with available technology. These mandated standards required the auto industry to design engine control computers to manage engine efficiency more precisely.
 The company purchased about $10 million worth of semiconductors in 1980 from twenty suppliers.
 Semiconductors were a greater cause of production disruption than were all other purchased materials.
 The 1980 situation (forward planning) demanded new thinking and a new approach to the acquisition of semiconductors.
 The Universal Motor team was battling with wither they should make-or-buy the required semiconductors. So a team of experts were assigned to develop a program analyzing the semiconductor industry. Both primary and secondary research was conducted.
 The make-or-buy issue consisted of many sub issues, which caused the entire process of designing, manufacturing, and testing to be broken down into stages.
 A 1982 environment scan revealed some very interesting facts. The first and most important was that design engineers were in incredibly short supply.
 There was adequate mask-making and manufacturing capacity for making ingots and imprinting integrated circuits.
 There were packing issues which consisted of at least two sub issues, industry capacity and packaging technology.
 The issue of testing of the packaged semiconductor devices had to do with the relative value of a semiconductor to the various