See work below in description Coursework Example | Topics and Well Written Essays - 750 words

See work below in description - Coursework Example The semiconductor markets are so minute to influence the equilibrium of the industry. It is also revealed that the flow of supply of these semiconductors is not reliable and cannot be predicted. Therefore, it can be termed to be stochastic. Introducing stochastic modeling techniques without backorders to the suppliers, ensures that the management is able to predict the supply patterns of its suppliers (Nagle and Hogan, 2006). This allows the introduction of a Reorder Point within their semiconductor inventory, the Reorder point is a particular level of inventory when reached, demands for replacement of depleted stock. Through such a point Universal management will reduce the stock outs. To effect on this, an automated inventory control technique ascertains the firm not to be faced by stock depletion. It allows automatic stock taking and stock use to establish the Reorder point. These are essential management tactics that the universal management ought to consider. The other alternative that the management ought to consider is to identify one of its key suppliers of the semiconductors and negotiate for a merging deal. The merging in this case is a vertical one. In such a deal, two or more firms having different products, but for a particular finished commodity join together to acquire a firm and reliable supply chain. For instance, semiconductors and engines aid in the manufacture if automobile vehicles. Therefore, this is an opportunity that the universal has to consider to stabilize and solve its supply chain problem. The introduction of the stochastic modeling and an automated inventory process is helpful to the firm since they introduce the reorder point to eliminate stock outs. The automated inventory system allows accuracy and timeliness of stock materials, as well as, to their designated destinations (Nagle and Hogan, 2006). The programming models allow prediction of the stochastic supply patterns, hence, Universal will eliminate