1. Inventory Management Presented by : Ashutosh Kumar Jha(91011) Deepinder Singh(91016) DivanshuKapoor (91017)Harsh Agrawal (91022) Nishant Singh(91039) SwetaAgarwal (91059)

2. "In the physical world it's the old saw: location, location, location. The three most important things for us are technology, technology, technology." - Jeff Bezos, CEO, Amazon.com

4. Consistently ranked as one of the best retail sites on the Internet.

5. According to an analyst, "When you think of web shopping, you think of Amazon first."

7. The company is in coalition with other retailers and offer various new, and used items in categories.

10. Work in process(semi finished items that are stored temporarily)

11. Finished goods(waiting in stores for delivery)

12. Transit inventory (need to transport items)

13. Buffer inventory(uncertainties of supply and demand)

15. To protect against stock-outs

16. To take advantage of quantity discounts

17. To protect against inflation

18. To protect the uncertainties of supply and demand

19. Unpredictable events

20. Seasonal increase in demand

23. Time and money not to be spent in dealing with the inventory.

24. Satisfy customers ; forced to build warehouses.

26. Computerized warehouses

27. Increased warehousing capacity from 300,000 sq. feet to over 5 million sq. feet

29. Appreciated; but faced a lot of problems in inventory management

31. Deciding the Strategy Inventory goals: right product in the right quantity to the right place at the right time. Reduce redundant inventory Blockage of working capital. Low inventory turnover. Cost of holding > cost of outsourcing Thus they OUTSOURCED

33. Outside distributors at Amazon for three kinds of products: cell phones, computers and books, excluding those on best-seller lists

34. CellStar handled the cell phone sales

36. Drop-Shipment Model

37. Disadvantages of Drop-Shipment Model The variable cost incurred by multiple delivery attempts and reverse logistics. Multiple delivery attempts cost the company about 20-30% of the total cost for home deliveries. 35% of orders placed at Amazon belonged to different product categories.

38. Amazon.com’s Customer Fulfillment Network

39. Steps taken for improvement Made improvements in its distribution centre which reduced 12% of the wrong inventory to 4% by 2002. Tightened its operation to ensure that it did not miss any customer orders.

40. Success Story Till 2001 Amazon was in deficit of US$2.86 billion. Earned its first ever profit of $5 million in the 4th quarter of 2001. Year 2002 recorded sales of $3.93 billion which was 26% higher than sales of 2001. Cost of operating warehouses reduced from 20% to 10% where as the capacity increased 3 times. Inventory turnover was 20 times as compared to other retailers having 15 times.