Please answer the questions A B C and D. Revolved around the microchips and Auto Industry.

Resources - The Bible - Online Educational Resources - Website: IWU Online Campus Library Services - Article: FOCUS-Chip makers have a message for car makers: Your turn to pay . Article: Used Cars Fetching Higher Prices as Demand Outstrips Supply Instructions 1. Review the rubric to make sure you understand the criteria for earning your grade. 2. Auto and truck producers around the globe are experiencing a shortage of microchips for new vehicle production. Even a small, inexpensive vehicle may require over 100 microchips. The result is a stymying of production of vehicles around the globe, and thus, restrictions on supply of new vehicles, particularly in the US. a. Utilizing the two following sources of information, explain in a 3-page case study how this shortage has affected new car prices. Demonstrate with a supply and demand illustration. No precision is necessary on the supply and demand curve. i. FOCUS-Chip makers have a message for car makers: Your turn to pay ii. Used Cars Fetching Higher Prices as Demand Outstrips Supply b. As part of the assignment, explain how new vehicle shortages and the concomitant increase in prices have affected used vehicle prices. Are they substitutable? c. With production levels being artificially low due to the chip shortages, explain how other suppliers, such as glass, steel, plastic composites, and electronics have been affected by the chip shortage. d. What are some options for those throughout the supply chains and distribution channels for addressing their reduced output? Explain with examples. 3. When you have completed your assignment, save a copy for yourself and submit a copy of the Word document and spreadsheet to your instructor using the Assignment submission page by the end of the workshop. By Jane Lanhee Lee, Sarah Wu and Kevin Krolicki Aug 3 (Reuters) - The shortages of computer chips that forced global automakers to scrap Sponsored Links X production plans for millions of cars over the ash. Mont N.D. past two years are easing - at a new and Minn. daho S.D. Wis. permanent cost to the car companies. Wyo. Mich Neb! lowa Pa. New. Ohio Utah Ind. What had been "war room operations" to Colo. ivar Kan. Mo Va. Ky. manage chip shortages are becoming N.C. Ariz Okla, Tenn. N.M. Ark. S.C. embedded features of vehicle development, Miss] Ala. Ga. Texas say executives in both industries. That has Fla. shifted the risks and some of the costs to automakers. The US States People Are Fleeing And The Ones... Forbes Newly created teams at the likes of General Motors Co GM.N, Volkswagen AG VOWG_p.DE and Ford Motor Co F.N are negotiating directly with chipmakers. Automakers like Nissan Motor Co Ltd 7201.T and others are accepting longer order commitments and higher inventories. Key suppliers including Robert Bosch ROBG.UL and Denso 6902.T are investing in chip production. GM and Stellantis STLA.MI have said they will work with chip designers to design components. Taken together, the changes represent a fundamental shift for the auto industry: higher carte marshande an works in chin downlanment and morn. scanital commitment in nurhandsTaken together, the changes represent a fundamental shift for the auto industry: higher costs, more hands-on work in chip development and more capital commitment in exchange for better visibility in their chip supplies, executives and analysts say. It is a U-turn for automakers who had previously relied on suppliers or their suppliers to source semiconductors. Online. Public. Special In-State For chip makers, the still-developing Tuition for |ndiana partnership with automakers is a welcome - ' _ RBSidentS. and overdue reset. Many semiconductor - - executives point the finger at automakers' ____ lack of understanding of how the chip supply PURDUE GL''r BA L chain works and an unwillingness to share m cost and risk - for a large part of the recent crisis. The costly changes are coming togetherjust as the auto industry appears to be moving past the worst of an even more costly crisis that by one estimate has cut 13 million vehicles from global production since the start of2021. THEY NEVER CALLED C.C. Wei, chief executive ofthe world's biggest chipmaker Taiwan Semiconductor Manufacturing Co 2330.TW, said he had never had an auto industry executive call him - until the shortage was desperate. 'WE HAVE UNDERSTOOD' The average semiconductor content per vehicle will exceed $1,000 by 2026, doubling from the first year of the pandemic, according to Gartner. One example: the battery-powered Porsche Taycan has over 8,000 chips. That will double or triple by the end of the decade, according to Volkswagen. "We have understood that we are a part of the semiconductor industry," said Volkswagen Group's Berthold Hellenthal, a senior manager for semiconductor management. "We have now people dedicated just to strategic semiconductor management." Securing - and keeping - chip engineers will be a challenge for automakers, which will have to compete against the likes of Alphabet Inc's GOOGL.O Google, Amazon.com Inc AMZN.O and Apple Inc AAPL.O, said Evangelos Simoudis, a Silicon Valley venture capital investor and adviser who works with both established automakers and startups. "I think that that would lead to acquisitions," he said. DX State Farm What does a Personal Price PlanTM feel like? Unlike Tesla Inc TSLA.O, which designs its own core chips, Simoudis said traditional automakers will have to juggle production of legacy auto models as they make new investments.Since last year, a shortage of semiconductors and supply chain constraints have severely curtailed the new car supply. This in turn has decreased the availability of used cars. With the pandemic convincing consumers to seek personal transportation over public transit, demand for cars of all stripes has risen just as the supply diminished, pushing up prices for both. But with fewer new cars being bought, there are fewer trade-ins, driving up the prices of those that are being traded in. "The ongoing inventory shortage has caused a broad ripple effect in market ' conditions. As new vehicles became more elusive, shoppers pivoted to the used-car market, pushing used-car prices up 37% in the first quarter,\" saidjenni Newman, Cars.com editor-in-chief. "Eager for quality inventory, dealers are making lucrative offers for popular vehicles maintained in good condition with low mileage.\" Used car valuations continue to increase. Given the market for second-hand cars is far larger than that of new cars in 2021, 40.9 million used cars were sold in the U5. versus 14.95 million new cars higher prices have a bigger impact. Survey notes high prices for trade-ins According to a recent Cars.com survey, 99% of dealers indicated they are paying more for trade-ins now than two years ago. Payouts have increase between 11% and 20%, according to 60% ofthose questioned, with 1 in 3 dealers saying their payouts have risen 20% or more from two years ago. WW ' Consumers aren't domplaining, at least if they're trading in their cars. Sixty-three Higher rates and prices having an impact New car prices rose 12.5% year over year, according to the US. Bureau of Labor Statistics. Interest rates are also rising, with the US. Federal Reserve hiking interest rates by three-quarters of a percentage point last week. It's largest rate hike since 1994. And there are indications the Federal Reserve could hike rates another 075 percentage points at the central bank's next meeting in July. This would raise the interest rates for car loans, reducing consumers buying power as all vehicle prices rise. But as new cars continue to become less affordable, and new car buyers continue to consider used cars, rising rates make new cars even less affordable they they already were, which could stoke the used car market even further, exacerbating an ongoing trend. The average price of used cars increased 35.3% in the past year and, according to Edmunds.com, now costs more than $30,000, paid for by a 70.7-month loan (nearly six years) at 8% interest and a monthly payment of $544. The higher prices are contributing to the current bout of inflation, with the most recent Consumer Price Index showing used car prices up i.8% from April to May, . . . . Manheim indicates dealers have a 45day supply of and new vehicle prices increasmg 1 percent. used cars. and 6 25d\" wholesale supply But there are indications higher rates and prices are beginning to impact sales, as Manheim notes wholesale used-vehicle prices were unchanged in the first i5 clays ofjune from May. While that doesn't indicate prices will decline, it does indicate they could begin to level off once supply satisfies demand, although that could be months, or even years, away