Intel Corp (INTC)

[Windsock]

Your example works for most OEMs but not for Dell.

Dell will order parts and demand a delivery commitment from a vendor. Dell requires that the vendor keep the parts in inventory for immediaate shipment and Dell keeps a minimal inventory. For something like hagh value processors with varying specs, the parts will be JIT and arrive only as build is scheduled.

If Dell doesn't get PC orders it won't take delivery of the parts. If the parts aren't used Dell cancels the orders and the vendor is screwed. A firm non-cancelable order has no meaning with Dell.

Doing business with Dell is a real nightmare. The Dell method of lets be reasonable is: "Do it our way... or get lost. We have other vendor choices."