Inventory Management by Amazon
Amazon has exploited several opportunities on the Internet to attract customers and increase revenues. Amazon uses the Internet to attract customers by offering a huge resource of millions of books. A large physical bookstore, in contrast, carries fewer than 100,000 titles. Amazon also uses the Internet to customize service to the individual. Amazon’s software allows it to develop and maintain customer relations by recommending books based on customer purchase history, sending reminders at holiday time, and permitting customers to review and comment on books. New titles are quickly introduced and made available online, whereas a brick-and-mortar bookstore chain must distribute and stock the titles prior to sale. Amazon takes advantage of other Internet attributes: online ordering and 24-hour-a-day, 7-days-a-week availability. To this Amazon adds delivery to the customer’s door.
Topics/Questions that should be covered in the essay:
History and background of the company.
What are the advantages and disadvantages of selling products over the Internet? Give examples of companies that have been faced with advantages and disadvantages. Specifically, describe their challenges and the methods used to overcome challenges.
If books can be downloaded online, how will Amazon’s business change? What methods could be used to forecast inventory and facility cost? What types of inventory methods does Amazon use? Would ABC Analysis be the best inventory method? Explain. What inventory method would you use? Explain. Why would the other inventory methods not be the most beneficial?
What other products could Amazon sell that is downloadable? Give examples and reasons Amazon would be successful. What challenges would they have to overcome?
What recent projects has Amazon started?
What do traditional bookstores have to gain from setting up an e-commerce site to complement their retail stores?
How does this impact on-hand inventory? What are Amazon’s competitors and how are they dealing with inventory cost and control? Can they compete with Amazon 10-15 years from now? Why or why not?
What are some of Amazon’s best practices that help establish the company as a leader in their field?
What are some best practices for managing inventory (be sure to include reference)?
How do the company’s initial mission and philosophy align with how Amazon has grown and developed over the years? Your essay should be at least 3-4 pages.