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Operation management-About Amazon.com

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Operation management-About Amazon.com.....
Problem:
Describe the typical process discussing in depth how product/service is produced and provided,generating a blue -print. Subsequently, examine how environmental greening and sustainability issues have impacted them and what initiatives they have taken to address these issues within their operations strategy.based in your analysis you should comment on the future direction that may be observed in the operations strategy within this industry regarding environmental greening and sustainability.

The subject will be containing those items:

1- Composition

2- Typical process including PROCESS FLOW CHART

3- Environmental greening and sustainability

4- Initiatives taken by company.

5- Recommendation and comments.

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Amazon.com

Delivering Products and services
Amazon started operations in 1995 when the dot-com bubble had started. It started selling books but soon diversified portfolio of products from DVDs to kitchen appliances. The company indulges in online business activities rather than physical dealings with consumers. It involves buying and selling over internet through computer mediated network. Amazon is a perfect example of B2C business model which has highest levels of customer satisfaction and the fastest revenue growth rates. Amazon has ability to maintain operations at sufficiently profitable level, mainly due to two reasons:
Spreading too thin or taking on too many product lines
Giving away too much revenue to customers by offering free service and superior service
In delivering products and services Amazon has become web's largest retailer by focusing on customer rather than on short-term profits. The company has changed its business model several times to continuously improve efficiency of its operations, and thereby maintaining a steady commitment to keep its customers satisfied. The reach of Amazon can be attributed to following factors:
? Ubiquity: Internet is present everywhere and customers can use it to order from anywhere-home, office, or anywhere else
? Global reach: The technology can reach any global boundary
? Universal standards: Technology standards are universal throughout
? Information density: The technology reduces information costs and raises quality. ...

Solution Summary

Operations management for Amazon.com is examined. Environmental greening and sustainability is examined.

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Case problem

(See attached files for full problem description)

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Amazon.com, Inc. is the world's leading online retailer with over 17 million customer accounts in over 150 countries. The company sells books, music, DVDs, videos, toys, electronics software, video games, and home improvement products. Through its marketplace services- amazon.com auctions, zshops and sothebys.amazon.com- the company has created web-based marketplaces where buyers and sellers enter into transactions involving a wide range of products. As the company states in its 199 10-k:

We offer our customers a superior shopping experience by providing high value through selection, convenience, ease of use, low prices, product information and an intense focus on customer service. We are a proven technology leader, having developed electronic commerce innovations such as 1-click technology, personalized shopping services, easy to use search and browse features, secure payment protections, and wireless access to our stores.

The company's quarterly income statement and balance sheet appear on excel.

Required:

1. Comment on the company's "year over year" sales growth for the March and December quarters. Why do you suppose December 1999 sales outpaced March 2000 sales?
2. Compute the gross profit margin for each quarter and comment on any trend.
3. How well has the company been managing its "selling, general, and administrative expense'?
4. Why doesn't amazon.com have any "receivables" on its balance sheet?
5. Compute inventory turnover for each quarter (using the quarter-end inventory amount) and comment on any trend.
6. Analysts who cover internet stocks use the "cash burn rate" as an index of company health. The cash burn rate (in months) is:
Cash burn rate= cash on hand
Operating cash flow needs (per month)
Suppose an internet company is generating negative operating cash flows of -$300 each quarter, or -$100 per month. If it has $1,000 of cash on hand, its cash burn rate is 10 months. Unless operations turn cash flow positive, the company will run out of money in 10 months. Based on Amazon's historical growth and operating cash flows, what is its cash burn rate as of March 2000?

7. Why are analysts interested in Amazon's cash burn rate?

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