In Chapter 11, we take a closer look at supply chains, logistics, and customer service. The growth in e-commerce and online retailing has spiked demand for warehouses—see “ US warehouses are costly and hard to come by, as e-commerce demand picks up ,” (CNBC, June 14, 2017). Use this article to logically project how these trends will impact customer service levels and each of the different costs shown in Exhibit 11-2.
Amazon appears to be interested in doing “last mile” logistics. “Last mile” refers to delivery from a final warehouse or distribution center to a customer’s door. Right now, Amazon relies mostly on UPS, FedEx, and the U.S. Postal Service to perform this part of the logistics function. Now Amazon appears to be threatening to take over the last mile as well. You can read more about this in “ Amazon Will Deliver Their Own Packages – Revolution At The Delivery Door, ” (Forbes, September 29, 2016). Considering what you learn in chapter 11 and in this article, what are likely the main reasons for Amazon to be considering this delivery [Continue Reading …]
Silicon Valley startup Zipline is delivering blood and emergency medicine to rural areas of Rwanda. You can learn more about Zipline in the YouTube video below. Review the discussion of Exhibit 11-2. Estimate how Zipline’s drone delivery effects inventory cost, cost of lost sales, and transportation costs as compared to possibly shipping supplies by car/truck over 200 miles of jungle roads. This will of course require you to make some estimates on costs, provide a an explanation. Estimate how Zipline’s drone delivery might be evaluated if it was added as a row in Exhibit 11-5.