Service Operations Management Case Analysis Report

Jul 7th, 2015
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Introduction Dell was founded in 1983 by Michael Dell, an 18 year old college freshman from Texas who started out upgrading hard drives for IBM compatibles on nights and weekends. Within a year, his service business had grown to an incredible $6 million from performing computer upgrades for local area businesses and he dropped out of school to concentrate on the business. When Dell changed his offering to custom built-to-order machines, the business exploded, with $70 million in sales by the end of 1985. Evolving into an assembler company, Dell was able to exploit many opportunities in hardware industry and swiftly adapted to meet market conditions.

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Table of ContentsFigure 1: Cumulative change in year on year change in some operating ratios4Table 1: Calculation for SGA, R&D and Special charges per unit sold.3Table 2: Year on Year Performance4Table 3: Initiatives and payoff5Table 4: IBM cost structure for servers (High and Middle range)6Table 5: Approximation of Dell employee cost structure6Table 6: Evaluation of vendor for outsourcing7IntroductionDell was founded in 1983 by Michael Dell, an 18 year old college freshman from Texas who started out upgrading hard drives for IBM compatibles on nights and weekends. Within a year, his service business had grown to an incredible $6 million from performing computer upgrades for local area businesses and he dropped out of school to concentrate on the business. When Dell changed his offering to custom built-to-order machines, the business exploded, with $70 million in sales by the end of 1985. Evolving into an assembler company, Dell was able to exploit many opportunities in hardware industry and swiftly adapted to meet market conditions. Five years later, total sales had grown to an unbelievable $500 million and Dell became nationally known as a supplier of state-of-the art desktop and portable computers. Dell continually achieved phenomenal records in sales and profit growth, eventually making it the most successful company ever in the PC industry, surpassing $25 billion in 2000. As one of the world's premier providers of computer products and servi

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