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    Dell Computers

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    Snap Shot of Scenario:

    Dell Computer, with close supplier relationships, encourages suppliers to focus on their individual technological capabilities to sustain leadership in their components. Research and development costs are too high and technological changes are too rapid for any one company to sustain leadership in every component (See attachment for complete scenario).

    I need help to:

    - State any business problem that company needs to resolve.
    - Briefly summarize relevant background information.
    - Describe how company with issues, if relevant.
    - Comment on the appropriateness of these actions based on case understanding
    - Respond to the case questions included at the end of the case in the text.

    I need help to respond to the discussion questions below:

    1. How has Dell used its direct sales and build-to-order model to develop an exceptional supply chain?
    2. How has Dell exploited the direct sales model to improve operations performance?
    3. What are the main disadvantages of Dell's direct sales model?
    4. How does Dell compete with a retailer who already has a stock?
    5. How does Dell's supply chain deal with the bullwhip effect?

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    Solution Preview

    Step 1
    The problems that Dell faces are that research and development costs for suppliers are too high and if the technology changes before they have recouped their research and development costs the suppliers may suffer losses. Another problem that Dell has is that the outbound shipping costs are relatively high when compared with selling through retailers and distributors.
    The background information is that Dell has designed its supply chain to support its business model. Dell maintains close relationship with suppliers and encourages them to maintain technological leadership. With this strategy, Dell is able to offer built to order products to its customers. It has been successful because it has gained competitive advantage, growing market share, and low capital investment. Dell is able to offer an unlimited variety of products. Each product is made to order and satisfies its customers. Dell has been able to speed its products to the ...

    Solution Summary

    This answer offers cogent arguments relating to Dell Computers