Question

Dell has been selling computers for over 25 years with its unique, direct build-to-order, sales model. Read about Dell on pages 90–93 in our textbook and also watch the Dell Supply Chain video and answer the following questions:

• Why has Dell's direct supply chain been so successful?

Answer 1

The main reason behind the success of the supply chain is that it has a greater impact on the online sales. The positive impact on the sales results in the inventory cost, facility costs, transportation costs, and the information costs of Dell in the computer industry. By selling the laptop and computers online, the inventory is reduced to the minimum level and the inventory is aggregated in some selective locations only. This also lowered the facility cost which in turn controlled the information cost and affects the transportation cost which forms the major portion of total cost.