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1) Describe the evolution of Amazon’s.com inventory and supply chain management in the US from its inception.
In 1995, Jeff Amazon formulated a mission statement “use the Internet to transform book buying into the fastest, easiest, and most enjoyable shopping experience possible”. The first DC was built in Seattle followed by another built in Delaware in 1997. The initial focal points for Amazon in the US (in 1995) was speed, ease, and gratification, and besides its swift success it shortly became known as the “Earth’s Biggest Bookstore”. As the business depended on wholesalers to carry stock and supply books upon demand, the company kept low inventory levels and low safety stock. They relied on the procurement strategy, which consists of holding modest inventory. Consequently they were in direct association with the publishers and a typical order fulfilment for Amazon spanned form four to seven days. The capacity of the DC expanded and major logistics investment occurred. In 1997, the new DC in Delaware situated Amazon closer to its East Coast customers which decreased the lead times and dependence on the supplier (Ingram). One year later Amazon expanded its product lines by launching music CD’s, DVD’s and videos. As competition continued to strengthen, Amazon engaged in a massive growth strategy (Get Big Fast strategy) which intended to increase its returns per customer, product selection and physical infrastructure. Amazon then turned to software experts that used i2 technologies. This software pointed out regions to consider DC based on customer demand and supplier locations, inbound and outbound freight rates, warehousing expenses, and labor. Six new DC were then established which intended to serve the market with a two to three day delivery lead time. It cost Amazon $320 million for the addition of distribution capability, but increased its capacity to pack, wrap, and ship to almost one million boxes a day. According to Bezos, “this has been the fastest...