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    Amazon builds more warehouses to provide faster delivery to customers by locating closer to population centers. As Amazon grows, it needs additional warehouses to quickly fulfill increasing customer orders. Locating more warehouses near customers reduces response times. While Amazon cannot stock every product it sells due to large inventory costs, it stores high demand items in warehouses and provides lower demand items upon customer request from external sellers. Brick and mortar retailers can leverage both online and physical channels to improve their traditional supply chain. Stores should focus on bestsellers while online fulfills other items. Collecting customer data online and offering multiple channels improves convenience and reduces costs.

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    Amazon builds more warehouses to provide faster delivery to customers by locating closer to population centers. As Amazon grows, it needs additional warehouses to quickly fulfill increasing customer orders. Locating more warehouses near customers reduces response times. While Amazon cannot stock every product it sells due to large inventory costs, it stores high demand items in warehouses and provides lower demand items upon customer request from external sellers. Brick and mortar retailers can leverage both online and physical channels to improve their traditional supply chain. Stores should focus on bestsellers while online fulfills other items. Collecting customer data online and offering multiple channels improves convenience and reduces costs.

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    2K views3 pages

    Amazon

    Uploaded by

    Nono Dede
    Amazon builds more warehouses to provide faster delivery to customers by locating closer to population centers. As Amazon grows, it needs additional warehouses to quickly fulfill increasing customer orders. Locating more warehouses near customers reduces response times. While Amazon cannot stock every product it sells due to large inventory costs, it stores high demand items in warehouses and provides lower demand items upon customer request from external sellers. Brick and mortar retailers can leverage both online and physical channels to improve their traditional supply chain. Stores should focus on bestsellers while online fulfills other items. Collecting customer data online and offering multiple channels improves convenience and reduces costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 3

    1. Why is Amazon building more warehouses as it grows?

    How many
    warehouses should it have and where should they be located?

    Amazon is keen to provide faster service to its customers by getting


    closer to them by building more and more warehouses.
    As it grew, the company needs to add more warehouses to react more
    quickly to consumer orders.
    It is obvious that by increasing the number of warehouses the response
    time decrease, So by that increasing of the warehouses and locate them
    near the customer will improve response time.
    Amazon operates more than 175 warehouses around the world in more
    than 150 million square feet of space, the majority located across North
    America and Europe in addition to china and japan.

    2. Should Amazon stock every product it sells?

    No, but it can store products with high demand, while less consumable or
    ‘just in time’ products can be provided from external sellers upon request
    because storing every product that Amazon sells will lead to a large
    inventory.

    3. What advantage can brick-and-mortar players derive from setting


    up an online channel? How should they use the two channels to gain
    maximum advantage?

    By combining the power of retail and online channels the performance of


    the traditional supply chain for selling products can be greatly improved.
    Products supply chains should be structured so that retail outlets provide
    more items of bestsellers to be purchased by customers and only few
    amounts of low demand products. Besides, Internet kiosks must be
    provided in these outlets in order for the customer to order any non-
    available products via the Internet. This enables the supply chain to
    reduce stocks by aggregating low-demand products that are sold online
    while reducing transportation costs for the best-selling products in the
    retail store.

    Maximum advantage through:


    - Via the Internet, it is possible to collect more detailed information
    about customers so that to create a customer database.
    - Providing two channels to customers makes it more convenient and
    suitable for their specific needs. At the same time, it can also save
    unnecessary cost for the company.

    4. What advantages/disadvantages does the online channel enjoy in


    the sale of shoes/diapers relative to a retail store?
    Advantages:
     Save time spent on shopping
     Cheaper pricing
     Low cost of the facility

    Disadvantages:
     The cost of transportation
     Response and delivery time
     The cost of information technology

    5. For what products does the online channel offer the greater
    advantage relative to retail stores? What characterizes these
    products?

    The e-commerce channel offers the greatest advantage to products that


    are not very popular or of low demand.

    Selling these products online will help save inventory costs. Some
    examples of these products are: electronics, books, clothing, office
    supplies and household goods.
    It also provides a huge advantage for products that can be digitally
    delivered (such as books and music).
    Also Virtual Goods - like software as well as Physical goods - foreign
    products; a product that is difficult for buyers and sellers to find

    Characteristics
     The advantage or quality of products can be easily demonstrated
    from images or description on the Internet.
     Its traditional channel can be easily replaced by the e-commerce
    channel.
     Lower cost (for example, the cost of displaying and leasing
    stores can be eliminated)
     The cost of searching on a traditional channel is much higher
    than e-commerce.

    References:
    1. About Amazon Staff. (2019). Why Amazon warehouses are called
    fulfillment centers. Retrieved from
    https://www.aboutamazon.com/amazon-fulfillment/our-fulfillment-
    centers/why-amazon-warehouses-are-called-fulfillment-centers

    2. Chopra, S. and Meindl, P. (2013). Supply Chain Management:

    Strategy, Planning & Operation (5th ed.). Pearson.

    3. Ganeshan, R. and Harrison, T. P. (2016). An Introduction to Supply

    Chain Management , Retrieved from

    http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html

    4. Levi D.S., Kaminsky P., and Levi E.S. (2000). Designing and

    Managing the Supply Chain: Concepts, Strategies, and Case

    Studies, Irwin McGrawHill.

    5. Oliveira, A. and Gimeno, A. (2014). Customer Service Supply

    Chain Management: Models for Achieving Customer Satisfaction,

    Supply Chain Performance, and Shareholder Value. New York:

    Pearson.

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