University of Austin Companys Warehousing Efficiency & Responsiveness Questions

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How do      the location and size of warehouses affect the performance of a firm such      as Amazon? What factors should Amazon take into account when deciding      where and how big its warehouses should be?

Amazon      has built new warehouses as it has grown. How does this change affect      various cost and response times in the Amazon supply chain?

McMaster-Carr      sells MRO equipment from five warehouses in the United States. WW Grainger      sells products from more than 350 retail locations, supported by several      warehouses. In both cases, customers place orders using the Internet or on      the phone. Discuss the pros and cons of the two strategies.

  1. Consider      a firm such as Apple or Dell, with very few production facilities      worldwide. List the pros and cons of this approach and why it may or may      not be suitable for the computer industry.                                                                                            

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SOLUTIONS

Discussion 1:
The geographical setting and size of a company’s warehouses will have a direct determination on
the company’s efficiency and responsiveness. This also includes facility costs, transportation
costs, and inventory utilized by the company. The dispersion of Amazon’s warehouse allows the
inventory to ensure a steadier supply of stocks to meet customer’s demands efficiently at a
shorter time. Generally, having more warehouses at strategically locations increases higher
service levels at a fair cost as well as reducing transportation costs. Although, this adds higher
in...

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