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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jack T. Pearson who wrote (20887)	11/8/1997 3:25:00 AM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Competitors who have been adopting BTO have been selling out of inventory, and should be seeing a onetime, temporary bump in margins. Jack you've got it backwards. If prices are falling, margins will decrease because you used more expensive inventory than the replacement cost (regardless of whether you use FIFO or LIFO accounting). Parts will cost more (not less) when they are removed from inventory. So Dell should be able to reap the full benefit of falling prices because it essentially has zero inventory. Margins for CPQ should increase after it has used up its older expensive parts inventory. Remember, inventory is booked at cost, not replacement value. Regards, Paul