Read the case and answer the questions below:

Tesla is forcing the auto industry to rapidly change. Large, established automakers now are making fully electric and hybrid electric cars. Automakers are starting to explore and include artificial intelligence $($AI$)$ in their cars. Not only that, but Tesla's software design is state$-$of$-$the$-$art: the fact that Tesla can update vehicle software over$-$the$-$air $($OTA$)$ as if it were Apple updating an iPhone is extraordinary. But Tesla struggles to meet deadlines and frequently delivers flawed vehicles, and profitability remains elusive. Many use Tesla's failings to argue that the company shouldn't be followed as an innovator or even as a true automaker. In fact, Tesla is a good example of how critical stable supply chains are to the success of an automotive company.

Tesla missed Model $3$ production goals in Q$32017$ due to supplier issues, and ended up having to redesign a key part of the Model $3.$ Tesla's supply chain is still in the development phase, and right now Tesla doesn't have the capital and supplier relationships that other big automakers have. "For better or worse, Tesla makes its own batteries, so it's heavily dependent on its own sources," said an automaker expert. $"$If that went down, batteries are heavily commoditized, so there wouldn$$t be too much of a hiccup, but there would be some down time."

Because Tesla's supply chain often relies on single source suppliers, one can quickly fit the puzzle pieces together to see how and why Tesla has struggled. According to a Tesla statement, the electric car manufacturer does have more supply chain volatility than other automakers. Supply chains are critical to an automaker's success, but the most critical part of the automaker's supply chain is its relationship with suppliers $$ and that might be where Tesla is weakest.

In general, the auto industry doesn't single source, and the average auto supply chain is far more efficient and effective than Tesla's. When it comes to suppliers, Tesla's lack of funding is a huge issue. For example, Tesla is trying to ramp up production of the Model $3,$ necessitating a high volume of parts and components from its suppliers. Because of that capital expense, Tesla might hold off on paying upfront costs for the parts and wait until the car starts selling before paying suppliers.

That compounds the problem; now Tesla has to produce and sell as many cars as possible in order to pay suppliers and maintain strong supplier relationships. But because Tesla is still learning how to mass produce electric cars, Tesla is still new to the auto industry $$ production problems still arise, making it increasingly difficult to sell and deliver quality cars at an efficient rate.

Tesla shows how crucial it is for an automaker to have all the twists worked out of its supply chain before pursuing such big goals, like skipping the prototype stage and rushing to produce $5,000$ cars a week right away, which is how Tesla approached the Model $3.$ While Tesla can be seen as an inspiration to the industry, it also serves as an example of what happens when you lack capital, sufficient cash flow and an unstable supply chain. But if Tesla can keep investors hooked on its vision of a future filled with electric cars, it may just be a matter of time before it becomes an industry bedrock.

QUESTIONS:

$1.$ The supply chain consists of $4$ cycles: procurement, manufacturing, replenishment and customer order cycles. Which $2$ of these $4$ cycles had the most problems in Tesla$$s supply chain? Justify.