8/16/2019 SCM Case Study Questions

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1. What are the key factors that influence the design of Amazon's U.S. distribution network?2. What are the main challenges for Amazon to relicate its U.S. oerations in !uroe?". Suose the weekly demand for a oular tablet comuter follows the normal distribution# $

%1&# 2( in U)# $ %2# 2&( in *ermany# and $ %12# 2( in +rance. Amazon sources thetablet at ,2& er unit# and the sourcing lead time is 2 weeks. !ach sourcing order costs Amazon,2 in administrati-e rocessing and transortation. he comany uses a continuous re-iew %/#0( olicy to manage in-entory and targets a 3 ser-ice le-el %k 4 2.&5(. Assume an annual

interest rate of &3 to calculate in-entory holding cost and &2 weeks in a year.a. What are the order 6uantity 0 and reorder le-el / for each 78? 7efine cycle stock as 092#safety stock as / minus the e:ected demand during lead time# and a-erage in-entory asthe sum of cycle stock and safety stock. What is the total amount of a-erage in-entoryheld in all three 78s?

b. ;f Amazon uses one single 78 to ser-e the tablet demand in all three countries# what arethe resulting 0# /# and a-erage in-entory held in the 78?