MGT 330 SEMESTER PROJECT

Submited to,

Seeratus Sabha

Lecturer, Independent University of Bangladesh

Submited By,

1. MD. Ahsanur Rahman -1820668

2. Atokiya Akila -1920936
3. Ahnaf saadman -1731068
4. Sadman sakib -1721038

Section:3

Submission date:05 January 2021

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Letter of Transmittal

5 January 2021

Seeratus Sabah

Lecturer, Independent University,Bangladesh School of Business .Dhaka, Bangladesh.

Subject: Permission for Submitting the final report on operational management.

Dear Miss,

It is an indeed a great pleasure for us to be able to handover the result of our hardship of the
MGT-330 report. We are very much grateful to submit this task which is the operational
management on case study as you have ordered us to do in this semester. The entire duration of
preparing this report has been immensely helpful to us, a golden opportunity to increase our
ideas, concepts and interpersonal skills in terms of what we learned from the course.

We tried our level best to build up the information for you as ample as possible. We will be
obliged to provide further amplification on this report whenever required.

Sincerely yours,

oAtokiya Akila

o Sadman Sakib

o MD.AHSANUR RAHMAN

o Ahnaf Sadman

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 EXECUTIVE SUMMARY

By now we all know that Amazon is the name of the most renowned web today. With the
growing e-commerce trend and specially in the situation of COVID-19 Amazon is constantly
adapting and innovating the chances in the environment to maintain the best quality competitive
advantage. As Amazon is the leader of all the E retailer industry toss it the company which only
a few can compete with.Amazon is the shopping portal and is noworld business to another level.
With the developing web based business pattern, Amazon is continually adjusting and innov
atingchanges in the climate to "keep up" its serious advantage.Because of Amazon's rankas head
of the e-retailer industry with a market capitalization of $77.62 billion, there are fewcompanies
that can compete.The organization has had the option to purchase out organizations like Zappos,
and IMDB, to lighten their competition .Amazon has additionally extended their Web presence
inbecoming a solitary one-stop dealer on the Internet through coordination of their
"shoppingportal" and "item search portal".This sets up extreme rivalry from "online
generalmerchants" like eBay, and "general entrances" like Google. At last, Amazon has
demonstrated to be unfading in the industry.However, there areeconomic issues confronting the
organization that could prompt their demise.With expanding oilprices, Amazon is seeing rising
transportation costs, which could straightforwardly impede their capacity toprovide free delivery
and most minimal costs on the Web.Another pervasive issue is the new taxationlaws in Web
exchanges, which have just been set up in certain states in the UnitedStates.These new
assessments represent a major danger to online organizations and may acquaint newopportunities
with rival Amazon from the blocks and concrete companies.In request forAmazon to stay
effective, they should distinguish goals to these issues. To soothe suchissues, Amazon should
keep on doing what has isolated them from their opposition, and remain"customer obsessed".By
putting clients first, Amazon will be compelled to advance ways tokeep costs low for clients
through financial downturns, and mitigate issues encompassing onlinesales charges.

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TABLE OF CONTENT :
PAGE

INTRODUCTION …………………………………………………………………………… 5

CASE…………………………………………………………………………………………..6

INVENTORY MANAGEMENT ……………………………………………………………...7

INVENTORY OUT SOURCING……………………………………………………………...8

SHIPMENT MODEL …………………………………………………………………………9

ANALYSIS…………………………………………………………………………………10,11

ISSUE………………………………………………………………………………………….12

CONCLUSION…………………………………………………………………...……………13

REFERANCE………………………………………………………………………………….14

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 INTRODUCTION:

Amazon.com (Amazon) is one of the principal web based shopping destinations dispatched in
1995. Since its beginning, it has been reliably positioned as extraordinary compared to other
retail locales on the Internet and is viewed as the general model for effective Internet retailing. In
March 1998, Amazon was positioned among the best 20 web locales in practically all the
significant market reviews. As per an examiner, "When you consider web shopping, you
consider Amazon first. The Forrester Force Rankings in 2000, positioned Amazon as the best
web based shopping webpage. Amazon owed an enormous piece of its ubiquity to its incredible
client support, which was because of its excellent stock administration. Amazon understood that
there were a great deal of major parts in the e-following industry and in this manner it expected
to merge its situation as a standout amongst other internet shopping destinations. Appropriately,
it took a few measures. To build its income, it added a few new items to its site. In 1999, on a
normal, it included another item its site once in like clockwork. It went into key coalitions with a
few organizations to build the scope of items accessible on its site. Afterward, it reinforced its
Customer Satisfaction Network by getting items straightforwardly from the wholesalers instead
of loading all the products in its distribution center. Amazon was well known among its clients
for transportation the merchandise inside the assessed time, prompting fulfilled clients, improved
piece of the overall industry and rehash business. Before the finish of 2002, Amazon had 22.3
million enlisted clients on its site. By 2003, Amazon turned into the greatest book, music what's
more, video retailer on the Internet and offered more than 4.7 million books, recordings, music
CDs, DVDs, PC games and different items.

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 CASE:
The case provides an overview of Amazon.com's inventory management. Jeffrey Preston Bezos
the author of Amazon.com dispatched the organization when he understood that Internet gave
enormous degree to web based exchanging. Despite the fact that the site was initially dispatched
as an online book shop it at last offered a few different items to stay informed concerning the
opposition. The case investigates the various items and highlights offered on the site. The case
likewise examines Amazon's offers and its models for picking vital accomplices. It at that point
explains on the methodologies embraced by Amazon for dealing with its stock. It likewise
discloses Amazon's choice to re-appropriate stock administration to merchants. The case
investigates Amazon's choice to sell the results of contending retailers on its site. It finishes up
with a short note on what's to come challenges in Amazon's stockroom management. ''The
logistics of distribution are the iceberg below the waterline of online bookselling,'' Jeff Bezos,
founder and chief executive of Amazon.com The Internet has changed the way that we perceive
business and the way that we as consumers may make our purchases. In fact, the online
consumer today knows the convenience of purchasing a book online and having it delivered to
their door in a matter of a few days. There is no more need to fight crowds, find a parking spot,
and deal with traffic. The high street and mail order systems still have a place in the mix of
purchase routes; however it is no longer the only method of making purchases. The Internet
revolution has seen a massive increase in the long distance purchases made by consumers, as
geographical barriers are no longer as important as they were. The lack of geographical
importance has influenced the strategy of Internet companies. One of the first companies that
took advantage of this was the online bookshop Amazon.com. The case provides an overview of
Amazon.com's inventory management. Jeffrey Preston Bezos the founder of Amazon.com
launched the company when he realized that Internet provided immense scope for online trading.
Although the site was originally launched as an online bookstore it eventually offered several
other products to keep abreast of the competition. The case takes a look at the different products
and features offered on the site. The case also discusses Amazon's value propositions and its
criteria for choosing strategic partners. It then elaborates on the strategies adopted by Amazon
for managing its inventory. It also explains Amazon's decision to outsource inventory
management to distributors. The case takes a look at Amazon's decision to sell the products of
competing retailers on its site. It concludes with a brief note on the future challenges in
Amazon's warehouse management. The continued success of Amazon.com can be attributed to
its diversity in terms of geography as well as its diverse selection of merchandise, ranging from
media such as books, CD's, and videos to online auctions and house wares. Amazon.com
currently operates four international websites in France, Britain, Germany and Japan giving it
global Internet exposure. One of several factors that have proven Amazon.com successful is that
it has the first mover advantage. Not only was it first in its industry, it has also been successfully
marketed. But as with any Internet site, the actual presentation and processing are seen as a result
of the underlying technology and the way the company uses it.

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 INVENTORY MANAGEMENT :

At the point when Bezos began his endeavor, he focused on problem free activities. He needed to
offer his clients a wide choice of books, however didn't have any desire to invest energy and cash
on opening stores and distribution centers and in managing the stock. He anyway understood that
the best way to fulfill clients and at a similar clock ensure that Amazon delighted in the
advantages of time and cost productivity was to keep up its own stockroom. Building stockrooms
and working them was a very intense choice for Bezos. Each distribution center cost him around
$50 million and to get the cash, Amazon gave $2 billion as bonds. In 1999, Amazon added six
stockrooms in Fernley, Nevada; Coffeyville, Kansas; Campbellsville, Kentucky; Lexington,
Kentucky; McDonough, Georgia; and Grand Forks, North Dakota. Overall, Amazon had ten
stockrooms. The majority of these stockrooms were set up in states with practically zero deals
charge At the point when Bezos began his endeavor, he focused on issue free tasks. He needed to
offer his clients a wide choice of books, yet didn't have any desire to invest energy and cash on
opening stores and stockrooms furthermore, in managing the stock. He anyway understood that
the best way to fulfill clients and at the same time ensure that Amazon delighted in the
advantages of time and cost proficiency was to look after its own stockroom. Building
distribution centers and working them was an exceptionally extreme choice for Bezos. Each
distribution center cost him around $ 50 million and to get the cash, Amazon gave $ 2 billion as
bonds. In 1999, Amazon added six distribution centers in Fernley, Nevada, Coffeyville, Kansas,
Campbellsville/ Kentucky, Lexington, Kentucky, McDonough, Georgia and Grand Forks, North
Dakota. Overall Amazon had ten stockrooms. In the exact year Amazon expanded its overall
warehousing limit from 300,000 square feet to more than 5,000,000 square feet. Since Amazon
requested books and other items from distribution centers exclusively after the clients had
consented to get them the return rate was as it were 0.25 percent contrasted with the return pace
of 30% in numerous sections of the online retail industry. Amazon‟s distribution centers which
was a quarter-mile long yards wide put away large number of books, CDs, toys and equipment.
They were very much kept up and totally automated. Indeed the quantity of lines of code utilized
by Amazon‟s stockrooms was equivalent to the number utilized by its site. At whatever point a
client submitted a request a progression of mechanized occasions followed which made stock
administration easier.When a client requested a book from Amazon his receipt referenced the
title of the book followed by a scanner tag. This was a code of numbers, for example, 6-5-4
which showed the book‟s area in the stockroom. PCs imparted signs to the laborers remote
beneficiaries advising those things must be taken out the racks. The laborers chose the request in
which the things must be picked and afterward confirmed the heaviness of every item. These
items were kept in a green box which contained requests of various clients, when this got filled
they were set on transport line and shipped off main issue. Here the standardized tags were

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coordinated with the request numbers to discover who might get every thing. At that point they
were stuffed and allocated. Most of the requests were sent either through the United States postal
help or United States package administration whichever is found closer. In the Christmas period
of 1999, Amazon was resolved not to frustrate any client who visited its site for his vacation
shopping. Appropriately Bezos chose to stock the stores with each conceivable thing that clients
were probably going to purchase. In spite of the fact that this methodology was appreciated‟
however Bezos confronted a great deal of issues. It was then Bezos understood the significance
of Inventory Management and chose to decrease the size of inventories, this was made
conceivable by dealing with the stockrooms effectively. Amazon made cautious choices about
which items to purchase from where. At that point the organization chose to oversee dispersing
channels. A significant choice was taken was purchasing of books, CDs recordings and so forth
straightforwardly from distributers as opposed to from wholesalers. They updated the product
and furthermore attempted split shipments. Amazon likewise attempted to chop down its costs. It
chose to reevaluate a portion of its normal exercises so that it could focus better on its center
exercises. It collaborated with different organizations for transportation the stock. In this way,
while the accomplices dispatched the things, Amazon utilized on its online business ability. It
redone the design of its distribution centers making it simpler for the organization to find and
sort clients. By doing this it figured out how to save all the costs identified with dispatching and
delivery orders. Improved stock the board assisted Amazon with getting net benefit of $ 5
million in the final quarter of 2001 after amassing a shortfall of $2.86 billion out of a long time
since its dispatch in 1995.

Inventory Outsourcing :
Rethinking is subcontracting an administration, for example, item plan or assembling, to an
outsider organization. The choice to rethink is frequently made in light of a legitimate concern
for bringing down expense or utilizing time and energy costs, diverting or moderating energy
coordinated at the skills of a specific business, or to utilize land, work, capital, (data) innovation
and assets. Rethinking turned out to be essential for the business vocabulary during the 1980s. It
is basically a division of work. Reevaluating in the data innovation field has two implications.
One is to commission the improvement of an application to another association, as a rule an
organization that spends significant time in the improvement of this sort of utilization. The other
is to recruit the administrations of another organization to oversee all or parts of the
administrations that generally would be delivered by an IT unit of the association. The last
mentioned idea probably wo exclude advancement of new applications.

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 Drop shipment model :
Outsourcing is an inventory network the executives procedure in which the retailer doesn't keep
merchandise in stock, yet rather moves client requests and shipment subtleties to either the
maker or a distributer, who at that point delivers the merchandise straightforwardly to the client.
As in all retail organizations, the retailers have their benefit on the effect between the discount
and retail price.In 2001 Amazon chose to re-appropriate its stock however it realized that it was
an enormous danger. At the point when Amazon dealt with its own stock it had procured the
standing of giving unrivaled client assistance, which was its greatest strength. Amazon didn't
stock each offered on its site. It loaded just those things that were mainstream and oftentimes
bought. In the event that a book that isn't so mainstream is requested Amazon mentioned that
thing from its wholesaler who at that point transported it to the organization. In the organization,
the things the things were unloaded and at that point transported to the particular clients. So
fundamentally, Amazon went about as a trans-shipment focus and guaranteed that the whole
cycle of delivery from the wholesaler to client was done productively. The fundamental
wholesalers of Amazon included Ingram Micro and Cell Star dealt with mobile phone deals
while Ingram Micro, an entire deal merchant, taken care of PCs and books. Amazon had outside
merchants for the vast majority of its items aside from the blockbusters. Further Amazon went
into contract with Ingram Micro Inc. for dissemination of work areas, PCs and other PC
embellishments. Drop shipment model was very effective so Amazon chose to stretch out this
model to all classifications as well. The significant drawback of this model was if the clients
requested just a solitary thing at a time the drop shipment model was incredibly accommodating,
however in the event that a solitary arranged had a few things, for example, a book supplied by
Ingram and a game loaded by Amazon, at that point the accompanying method was received:
Ingram sent book to ,Amazon added the game at that point sent the entire box to the client. Since
very nearly 35 percent of requests set at Amazon were of various classifications the drop
shipment model was not viable. In 2001, Bezos thought of including the results of contending
retailers and some utilized things on their site. Amazon acquired nearly a similar benefit selling
on commission as it procured on retail. A favorable position of this element was clients could
now check the costs of Amazon‟s items vis those of different retailers. So the organization didn't
have to promote its low cost. By 2003Amazon, s distribution center could deal with threefold the
volume they used to deal with in 1999, while the expense of working them diminished from 20%
of Amazons income to under 10%. In 2003 Amazon chose to slice down its transportation
charges. Clients who visited the site were welcomed with a spring up window declaring the
company‟s choice to give free delivery to the individuals who purchased at least two things in
any mix from the destinations books, music, or video stores. The organization additionally chose
to diminish delivering charges. In spite of the fact that Amazon burned through large number of
rupees in showcasing to get new clients it figured out how to influence the sum spent as a result
of its lower capital expenses. By and large actual book shops having a wide scope of books
expected to stock around 160 days worth of stock.

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 ANALYSIS :

Strengths :

 Customer Relationship Management (CRM) and Information Technology (IT) uphold

Amazon's business procedure. The organization cautiously records information on client
purchaser conduct. This empowers them to offer to singular explicit things, or groups of things,
in view of inclinations exhibited through buys or things visited.

 Amazon is an immense worldwide brand. It is unmistakable for two primary reasons. It

was one of the first dotcoms, and in the course of the most recent decade it has built up a client
base of around 30 million individuals. It was an early exploiter of online advancements for web
based business, which made it one of the first online retailers. It has based on nits early victories
with books, and now has item classes that incorporate gadgets, toys and games, DIY and then
some.
 Product broadening from books and CD/DVD markets has given extra clients in other
item territories and shows vital development to develop the business through new client bases

 Strong circulation channel

 Negative money cycle

 Low costs

Weaknesses:

 Amazon are subject to outside conveyance organizations to complete the conveyance

capacity of the interface with the client which can prompt wild assistance level issues and

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 potential cost increments in accordance with the more extensive transportation industry,
for example, rising fuel and expanded vehicle tax assessment. On the off chance that
these expenses are not ingested they are passed back to the buyer both with potential
negative impacts.

 As Amazon adds new classifications to its business, it chances harming its image.
Amazon is the number one retailer for books; enhancement may prompt misfortunes and decline
in brand esteem.

 The organization may eventually have to reexamine its technique of offering free
transportation to clients. It is a reasonable technique since one could visit a more nearby retailer,
and pay no expenses. Notwithstanding the transportation expenses could be up to $500m, and a
particularly high figure would without a doubt dissolve benefits.
 No district based destinations.

Opportunities :
 Online retailing is as yet not developed in India, it can tap the market.

 There are likewise open doors for Amazon to fabricate coordinated efforts with the public
area. For instance the organization reported an arrangement with the British Library, London, in
2004. The advantage is that customer‟s can look for uncommon or classical books. The library's
inventory of distributed works is presently on the Amazon site, which means it has subtleties of
more than 2.5m books on the site.

 Growth of web clients in the following five years, dominatingly in the global market

 E-business extension in Asia and the Pacific

Threats :

 Increasing transportation costs will straightforwardly affect conveyance charges to

clients - as these expenses are not assimilated into the immediate business yet paid to an outsider
it is accepted these will be straightforwardly gone to the buyer which can have a negative effect
on brand insight from the buyer perspective.

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 Competition will increment because of the low boundaries to section on the lookout:
disconnected organizations are coming on the web Hindrances to Entry Danger of section is
viewed as medium to low. Being the primary mover in online book shop industry, Amazon
would be the best illustration of what beginner firms would be confronted. The factor that
isolates Amazon from the unpracticed firms is its 8-year capital serious and ceaseless update of
administrations through acquisitions and collusions, supporting the commission-based partner
sites, and perpetual innovation improvement and advancement. Mirroring such would likewise
require relationship building which is troublesome when relationship is set up by the principal
mover, or on account of undiscovered innovation accomplices, requires critical capital and key
arrangement proposition to move the other gathering. In the two cases, known industry players
would be the benchmark requiring the arrangement a significant measure of time and cash
unfeasible for the new player. The book retail industry has exceptionally high obstructions to
passage. The capital prerequisites important to set up a blocks and mortar book shop would be
practically outlandish for a newcomer. Customers know the huge name players. High item
mindfulness and huge advertising financial plans make it very hard for new participants to go
into this industry

ISSUES :
Amazon intended to do things any other way for the 2000 Christmas season. What were the
reasons that drove to the redoing of stock administration techniques? How was stock made more
compelling at Amazon? In the Christmas period of 1999, Amazon was resolved not to baffle any
client who visited its site for seasonal shopping. Thus, Bezos chose to stock the stores with each
conceivable thing that clients were probably going to purchase. Directly from the most recent
novel to the chartbuster film of the period, he needed everything to be put away to guarantee that
none of the clients logged out of the site, frustrated. In 1999, Amazon added six distribution
centers. Overall Amazon had ten stockrooms. In spite of the fact that the methodology embraced
by him was acknowledged Bezos needed to confront a ton of issues as well while attempting to
deal with his huge stock. Building distribution centers and working them was an extremely
intense choice for Bezos. Each distribution center expense him around $50 million. Amazon‟s
stockrooms were a quarter-mile long and 200 yards wide put away a large number of books.
Bezos understood the significance of overseeing stock in his organization. He realized that
countless accumulated merchandise spoke to unutilized money which could be utilized
somewhere else in his business. Nonetheless if less merchandise were supplied, it implied that a
portion of the clients were bound to be baffled. To defeat this dull errand of stock administration,
the organization chosen to do things another way in the Christmas period of 2000. Amazon
figured out how to decrease the size of inventories even as the organization offered more items

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on its site. This was made conceivable by dealing with the distribution center effectively.
Amazon settled on cautious choices about which the items to purchase and where to get them
from. The organization at that point needed to choose which of the conveyance place it would
send its items to and afterward realize how to get and follow the item once it was in the
stockroom. Amazon additionally chose to by its books, CDs , recordings and so forth
straightforwardly from the distributers as opposed to getting them from merchants. Amazon
likewise kept a decent relationship with its sellers so it could separate best arrangement from
them. To the stock, Amazon refined its product. The new programming helped the organization
oblige stock according to the interest in various districts. Amazon likewise attempted to chop
down its costs. It chose to rethink a portion of its normal exercises with the goal that it could
focus better on its center exercises. It joined forces with different organizations for transportation
the stock. So while the accomplices dispatched the things, Amazon utilized on its online business
aptitude. It redid the design of its distribution centers making it simpler for the organization to
find and sort client orders. By doing this, it figured out how to save all costs identified with
taking care of and delivering orders. Improved stock administration assisted Amazon with
recording its first historically speaking benefits in the final quarter of 2001. Subsequent to
gathering a shortfall of $5 millions in the final quarter of 2001. This benefit was mostly ascribed
to its capacity to lessen costs in loading and transportation products. Amazon had deals record 0f
$1.1 billion in the final quarter of 2001 which was a 15% increments over the deals recorded
during a similar period the earlier year. In 2002 Amazon recorded deals of $3.93 billion which
was 26% higher than the deals of 2001($ 3.12billion).

CONCLUSION:

The rate of Amazon’s innovations in supply chain management has been mesmerizing, making it
difficult for lower-volume competitors to keep up. Amazon is forcing its major competitors to
invest more in supply chain automation, lessen the overall product delivery time, increase the
number of warehouses, and even engage in product manufacturing. Its acquisition of Whole
Foods is also a bold declaration of its move to embrace brick-andmortar retail, and further
emphasizes the convergence of traditional retail and e-commerce strategies. Most importantly,
Amazon’s unique supply chain strategies and continuous technological innovations have already
changed the way supply chain management works. With impending advances in robotics, drones,
and other autonomous vehicles, one can only guess what innovations are next for Amazon.

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 REFERENCE

Szkutak, T. (2004, November 2). Morgan Stanley Software, Services, Internet & Networking Conference
www.morganstanley.com/institutional/.../pdf/disclosures_mssoft112005.pdf www.amazon.com

Waller, M., Johnson M. E., & Davis, T. (1999). Vendor-managed inventory in the retail supply chain.
Journal of Business Logistics, 20(1), 183-203. www.portal.acm.org/citation.cfm?id=1225718

FaizalTalib Amazon Supply Chain Integration , 2010 , http://www.emeraldinsight.com/journals.htm?

articleid=1789318&show=html

S. Thomas Foster Jr “Towards an understanding of supply chain quality management

http://www.mendeley.com/research/towards-understanding-supplychain-quality-management-2/

José Carreño Ramos International Logistics and Supply Chain Congress Circuit City Ends Relationship with
Amazon.com [WWW Document]. www.retail-merchandiser.com

Case study Analysis , Evolution of an E tailer http://www.slideshare.net/djadja/case-study-amazoncom-

evolution-of-e-retailer

Case study on Amazon.com http://www.docstoc.com/docs/10321910/Casestudy-on-Amazoncom

Supply chain Management of Amazon.com www.managementparadise.com

http://www.icmrindia.org/casestudies/catalogue/Operations/OPER023.htm

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