Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: WBC who wrote (56937)	8/7/1998 10:28:00 AM
From: Chuzzlewit	Respond to of 176387

WBC, have you looked at the actual data from last year??? Compaq had a huge COGS differential over Dell. The reason that JIT keeps inventories low is that it relies on frequent small purchases rather than infrequent large purchases. This is balanced by inventory handling costs which tend to be higher. Remember, the point behind JIT is to push inventories upstream. But the real problem with traditional purchasing patterns is what happens to inventories when sales don't materialize as expected. That's why Compaq lost its component cost advantages. Conversely, the problem with JIT is when there is some unforeseen disruption in the raw materials and component delivery system, like strikes or a failure to properly forecast demand by the component manufacturers. The demands made by JIT manufacturing on suppliers is extreme and requires virtual integration of the companies. TTFN, CTC