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Technology Stocks : ACII - AmeriChip International, Inc
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From: jbbooks1/20/2008 6:56:24 PM
   of 2396
 
Just a personal thought on random purchase orders versus long term contracts. In the Gaskins analysis, he hypothesizes that volume military orders would result in a gross profit margin of 40%. This is less than the 78% gross margin for the quarter ended August 2007.

gaskinsco.com

So if big companies like GM and Ford want to place purchase orders with ACII capriciously, rather than obtaining the benefit of reduced pricing with a long term contract, is this such a bad scenario for ACII if they can maintain a 78% gross margin? In a declining economy, are long term contracts as attractive to GM and Ford if they have a difficult time estimating their actual production needs going forward?
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