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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: lib who wrote (1783)	9/2/1998 12:34:00 AM
From: rudedog	Read Replies (1) \| Respond to of 2578

lib - As I have mentioned in other posts, this is a two-edged sword. For a company whose model drives to maximum cash flow, minimizing inventory is a good thing in a time of declining component prices. But companies which maintain a larger inventory position (and I assume we are talking about raw parts and WIP, not finished goods) can typically get better pricing on components in general. Companies like Intel are not into charity. If Dell asks them to pick up the cost of carrying inventory, and the uncertainty of the order stream as well, you can bet that Intel will reflect that in their pricing to Dell. Most of the suppliers are very hard-nosed on these pricing policies. This is not as simple as some would make it out to be, and is not necessarily something that CPQ or IBM would want to do.