Paint additive shortage from Japanese supplier impacts car colors

A Wall Street Journal article (March 26, 2011) describes a shortage of an additive, Xirallic, made of coated glass flakes, and by a Merck plant in Japan.  This additive is shipped to paint makers in Germany and then to car manufacturers.  The Japanese tsunami  impacted this plant, located close to the earthquake area and with no power, water or utilities. The impact is that Ford has canceled production of cars with the red and tuxedo black color, while Chrysler has canceled 1o colors.  Does this disruption show the importance of third and fourth tier manufacturers  with large market shares ? Will the decreased colors impact overall sales or will it result in sales being shifted to other colors ? Should retail prices of these colors be increased so that only those customers who really want the specific colors are provided the cars ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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