StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Essay example - Dell's Product Policy

Only on StudentShare
Finance & Accounting
Pages 4 (1004 words)
Name: Name of institution: Tutor: Dell’s Product Policy The main advantages of Dell’s inventory is it ensures low finished products, low carrying costs, as it strengthens its custom build-to-order strategy. The strategy makes marketing for defective products much easier, something that is not rare in technological products…

Extract of sample

This translates to their system having low cash conversion cycle hence cash is generated steadily. However, the system has its limitations. The low inventory held means shortage is a possibility in cases where manufacturers delay in supplying the PC chips, like in 1996. The very high dependence on on-time component supply by manufacturers poses a major threat to steady supply. In addition, changes in product means an overhaul in processes which is an expensive venture. This means that working capital can be funded through the management of inventory and cash flow cuts (Ruback & Sesia 2003). Working capital is the measure of efficiency and liquidity in a company. To obtain the computation, one needs to subtract current liabilities from the firm’s current assets. Inventory process For comparison, we assume that the cost of goods sold by the competitors remains constant. We observe that the carrying costs only depend on the DSI (Ruback & Sesia 2003). For 1995, the cost of sales =$2737, equivalent to a daily COS of 2737/365= $7.5% We make a comparison with the highest observed DSI of the competitor, Compaq, 73. Hence the inventory Compaq holds over dell is (73-32)*75=$307.5 m This means that for Compaq to acquire new goods, it has to sell its old inventory. ...
Download paper
Not exactly what you need?

Related papers

Business plan: Product Budgeting Project
Some of the assumptions taken to complete the product budgeting practice are stipulated below. Assumptions 1. The product is made up of the two raw materials named Beflow and Affton. 2. Two kinds of labour are used in the production process of the product, which are skilled and non-skilled labour. 3. For capital expenditure, since this is the first year of operations, therefore, the organization…
14 pages (3514 words)
Report On Product Costing For Dumbellow Ltd.
Furthermore, the production manager considered re-organization of production activities and also the use of a cheaper component of product Z. though all these proposals are viable; they have various shortcomings which may outweigh their expected benefit. In addition, a comparison of marginal costing and full costing (absorption costing) is dealt with in this report. The advantages of using…
12 pages (3012 words)
Finance Policy
A business’s financial position is evident from its profit and loss account and the balance sheet. The balance sheet and the profit and loss statement should communicate the appropriate results of the firm to the CEO so that he can make decisions regarding investment. The financial statements of the firm should be made available to all so that they can make their own conclusions from the…
7 pages (1757 words)
Revolutionary Footware Product
These statements shall then be used to determine if the project is viable or not. To bring out this details, the report shall develop a marginal costing statement that clearly points out the cost per unit of producing each item of the new footwear product, a break even analysis table and graph that shows the time that the project will take to break even, a cash budget that shows how cash will be…
6 pages (1506 words)
The management increased both the interim and final dividend throughout the four-year period. In 2007 the company paid an interim dividend of 6.5p which increased to 6.75p in 2008, 6.9p in 2009,7.6p in 2010 and finally 7.9p in 2011. For the case of the final dividend, the amount paid in 2008 was 13.5p, which was increased to 14.1p, 16.2p, 16.85p in 2009,200 and 2011 respectively (Associated…
3 pages (753 words)
Product Costing.
This implies that, the cost of a finished unit in inventory will include direct materials and labor, and both fixed and variable manufacturing overheads. It is notable that, absorption costing is the most preferred method for external reporting as per the Generally Accepted Accounting Principles (GAAP). Absorption costing is fundamental in tracing the variable costs of production and the fixed…
7 pages (1757 words)
Innovation Policy
Such countries have increased their focus on developing and enhancing technologies and this has helped in improving their profits. On the other side, there are countries that have developed export economies by utilising the technology that devised by importing countries. Policies of both these types of countries related to technological adaption have played a significant role in determining the…
10 pages (2510 words)