Q 4. Explain the root cause of increasing L5 manufacturing.

 Chipset supplier decommit or supply issues

 supplier was unable to deliver previously agreed chipsets – created disruption in
the desktop pc supply chain
 From the data gathered in first half of 2005, this accounted for more than L5
manufacturing as motherboards weren’t available for L6 manufacturing
 Quality/engineering issues
These issues lead to problematic motherboards that need to be repaired/replaced
by a new supply , which can create an additional demand of motherboard that was
not the part of forecast
 Dell forecast accuracy
 Due to faulty forecast , Dell needs to source its extra chipsets or risk not meeting
the customer demand.
 Long lead time made difficult for chipset supplier to provide additional chipsets.
 new product introduction
 actual demand of a newly released pc product can be volatile, the forecast uncertainty can
create a need air-freight extra motherboards.
The volatile demand can lead to the increase of L5 manufacturing.