Amazon's Inventory Management System

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AMAZON 2 How Amazon.com manages inventory. What are the company's unique concerns? How does the company address these concerns? To compete in the highly competitive online marketplace, Amazon.com must ensure that its inventory system is responsive to customer needs. Because Amazon caters solely to online consumers, it is very easy for shoppers to find alternative sources on the web, if Amazon is out-of-stock. "When items first arrive, they are immediately scanned and sorted"¦company policy dictates that a barcode scanner logs and scans an incoming item within the first 12 hours of its arrival" to ensure that if a customer wishes to purchase the item he or she will see the item is available (Master 2012) "Then, items go into one of 50 receiving areas to be sorted and stored. In some instances, the consumer good is such a hot seller that it will not even be shelved. Rather, the item ends up in 'mass land,' an area filled with pallets of goods ready to go out" such as the most recent additions to the Harry Potter or Fifty Shades of Grey saga (Master 2012). Amazon must also ensure that its products are delivered in a timely fashion, given that speed of delivery is yet another significant competitive component of being an online retailer. Amazon has a special algorithm "to determine the best shipping route and method for each item to make sure the consumer good arrives on time as its specified location" (Master 2012). However, the use of this system is not purely

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