Dell 2010 Annual Report Download - page 53
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Table of Contents
minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
Purchase obligations do not include contracts that may be canceled without penalty.
We utilize several suppliers to manufacture sub-assemblies for our products. Our efficient supply chain management allows us to enter
into flexible and mutually beneficial purchase arrangements with our suppliers in order to minimize inventory risk. Consistent with
industry practice, we acquire raw materials or other goods and services, including product components, by issuing to suppliers
authorizations to purchase based on our projected demand and manufacturing needs. These purchase orders are typically fulfilled within
30 days and are entered into during the ordinary course of business in order to establish best pricing and continuity of supply for our
production. Purchase orders are not included in the table above as they typically represent our authorization to purchase rather than
binding purchase obligations.
Purchase obligations decreased approximately $18 million from January 29, 2010, to $365 million at January 28, 2011. The decrease was
primarily due to the fulfillment of commitments to purchase key components and services, partially offset by the renewal of or entry into
new purchase contracts.
Interest — See Note 5 of Notes to Consolidated Financial Statements included in "Part II — Item 8 — Financial Statements and
Supplementary Data" for further discussion of our debt and related interest expense.
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