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Technology Stocks : Dell Technologies Inc.

DELL 127.02

-0.7%

12:32 PM EST

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To: Eddie Kim who wrote (37685)	4/13/1998 6:33:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Eddie, Pfeiffer and Mason said their inventory problems were multiquarter issues, so your statement: "Hopefully this is only a short term problem. is wishful thinking. The high end problem exists because you cannot combine financially efficient JIT manufacturing with a distribution channel architecture. This failure gets really costly when you face either obsolescence of inventory or rapidly falling component prices. Compaq faces both problems. To do JIT requires getting rid of the distribution channel. A distribution channel is antithetical to an efficient BTO system because it must, per force, build up a parts inventory. In addition, I think that Compaq is leery about jettisoning its dealer network. As I pointed out some quarters ago, this scheme will almost probably cause a quality control nightmare, because assembly is out of Compaq's direct control. Think about these issues. TTFN, CTC

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