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Technology Stocks : Dell Technologies Inc.

DELL 133.92

-4.9%

3:59 PM EST

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To: Jock Hutchinson who wrote (105418)	2/26/1999 3:52:00 PM
From: edamo	Read Replies (1) of 176387

re: dell model...rising component prices... give you all a point to ponder...dell did not invent the model, it is a tuned version of the j-i-t system that the japanese have used for years...inventory causes pricing problems...even if you average, you may be caught with either the wrong cost in inventory, or even worse, stale material...no inventory allows a manufacturer/assembler to react quickly to changes, without severely effecting cost..you blanket contract your supplier purchases, with commitments to fixed price for the duration of the contract...the onus of cost control falls on the down stream vendor who has committed his supply to you.....you source globally and take advantage of currency hedges...many ways to stabilize purchase costs...necessary in the high tech industry where obsolesence of parts comes all too soon...ala moores law...maybe simplistic, chuz can follow up with numbers, if he accepts my premise...ciao to you...ed a.

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