CommodoreAmiga
Well-Known Member
Hypothetically, if they had a 2MM order from Ford and a 100k order from Rivian but only 1.5MM chips available then it absolutely makes sense to fulfill Rivian.This is true, however there aren’t all that many other places to go for chips should one of the manufacturers get fed up with their chip supply. Supply chains have gotten so complex and dependent with JIT manufacturing that even missing 5% of chips in a shipment could mean the production line is impacted.
If they give Ford all their stock, they still fall short. Now Ford and Rivian are upset and both contracts are in breach.
If they give Ford 1.4MM units and fulfill all 100k for Rivian, then they’re still short on Ford but they satisfied one contract and made Rivian happy. And although Ford got less, it’s not that much less, relative to their whole order.
So in a bad situation, fulfilling small orders in full and large orders in partial may net vendors the best result/outcome.
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