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Technology Stocks : Dell Technologies Inc.

DELL 132.08

-0.8%

3:59 PM EST

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To: K. M. Strickler who wrote (37106)	4/8/1998 5:10:00 PM
From: Jim Patterson	Read Replies (2) of 176387

I agree that the Just in time model is a very effecient model. Where it breaks down is when demand is slower than Capacity. No matter what, Capacity utilization will have the greatest impact on Margins. Run full out and have a channel that fluctuates due to short term supply and demand. You can fill orders quickly and your plants can run 100%, very efficient. With the JIT model, Delivery times increase when demand is very high. If demand slows significantly, and Plant capacity drops below 90% for any lenth of time, The model starts to fail. Granted you do avoid the cost of carrying inventory, but the utilization rate is very important. Please explain if you have a vastly different opinion. This is just my understanding Thought I would re Post this and see if I got any responce. Jim

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