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Technology Stocks : Dell Technologies Inc.

DELL 125.88

-1.6%

Dec 31 3:59 PM EST

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To: ed who wrote (34434)	3/15/1998 6:57:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

How in the world can you contend that the advantage Dell got from the BTO model has been eliminated. It was Compaq's attempt to emulate a portion of that model that got it into so much trouble. The difficulty is this: Dell's BTO model is a "pull" model, whereby orders from customers trigger assembly and inventory decisions. Compaq's system is a "push" system because it relies on sales forecasts for inventory purchasing. So long as final assembly is in the hands of the channel it will be an inherently less efficient model than Dell's, if for no other reason, the fact that there is an additional cost (profit) center -- the channel. So emulation of the model requires a JIT assembly system, and that can't be done so long as CPQ relies on the channel. So, your statement is completely incorrect. Regards, Paul

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