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Toyota executives did a calculation about how much money they spent on steel sheets from Nucor Corporation over the last ten years. The expenditure on

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Toyota executives did a calculation about how much money they spent on steel sheets from Nucor Corporation over the last ten years. The expenditure on steel sheets was indeed a significant recurring cost to Toyota. So, Toyota has decided to build their own steel plant. Our Assistant Professor, Sangeeta Rani, declares that this is a totally bad idea for many reasons, the main one, in her view, is the problem of capacity matching. Now, you explain clearly and fully how indeed Assistant Professor, Sangeeta Rani, could be correct. (4 marks)

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