3/15/2016

Practice Problem 1: Amazon Prime | Week 1 Practice Problems | CTL.SC1x Courseware | edX

MITx: CTL.SC1x Supply Chain Fundamentals

Week 1: Overview of Supply Chain Management & Logistics > Week 1 Practice
Problems > Practice Problem 1: Amazon Prime

Bookmarks
Bookmark

Course
Overview &
Logistics
Entrance
Survey

Week 1:

Overview of
Supply Chain
Management
& Logistics
Welcome to Week
1
Lesson 1: Supply
Chain Perspectives
Lesson 2: Core
Concepts &
Approaches
Week 1 Practice
Problems
Supplemental
Materials for
MicroMasters
Week 1 Graded
Assignment
Homework due Feb
24, 2016 at 15:00 UTC

Week 2:
Forecasting I Introduction

Week 3:

PRACTICE PROBLEM 1: AMAZON PRIME

In the summer of 2014, Amazon.com, the largest online retailer in the
United States, launched an option for its premium customers (also known
as 'Prime' customers) to accept slower deliveries in exchange for a credit
applicable to online content. A Prime customer placing a Prime eligible
order would normally receive this package, for free, within a time window
of 2 business days. With the new option, the customer can instead accept
a longer delivery time, and as a reward, receive a $1 credit for use in
online video purchases.

Part 1
Which of the following statements is true about the example above?
a) It simplifies Amazon's distribution decisions and will reduce its
operating costs
b) It simplifies Amazon's distribution decisions, at the expense of
customer service
c) It expands the scope of a distribution decision beyond the
distribution function

d) It increases the complexity of a distribution decision, by adding

constraints

EXPLANATION

https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/eb6a807af0324d9caaaab908133f3e7c/63b1fbbfbc1b4438b2bd073bb398f635/

1/3

3/15/2016

Practice Problem 1: Amazon Prime | Week 1 Practice Problems | CTL.SC1x Courseware | edX

Forecasting II Exponential
Smoothing

Week 4:
Forecasting III Special Cases &
Extensions
Week 5:
Inventory
Management I
- Deterministic
Demand

The routing and transportation selection decisions now involve the

customer. While it does introduce complexity to the system, it is not
due to an additional constraint.

You have used 1 of 3 submissions

Part 2
Which of the following statements is also true about the example above?
a) It retains the same objective, but decreases the number of
variables
b) It changes the objective entirely, while keeping complexity
roughly the same
c) It adds some new variables and reduces the number of
constraints

d) It expands the jurisdiction of the distribution function

EXPLANATION

The ability to ship an item at a slower pace allows for greater flexibility
and higher utilization of transportation assets. Therefore this
essentially adds a new decision variable since Amazon may decide to
still ship the item within the two day window if it improves the
economics and removes the constraint of having to always ship
within that time frame.

You have used 1 of 3 submissions

Part 3

https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/eb6a807af0324d9caaaab908133f3e7c/63b1fbbfbc1b4438b2bd073bb398f635/

2/3

3/15/2016

Practice Problem 1: Amazon Prime | Week 1 Practice Problems | CTL.SC1x Courseware | edX

Which of the following statements is true about the example above?

a) It may bring the opportunity for better results

b) It creates the potential for runaway complexity

c) It fails to compensate Amazon's customers properly
d) It may reduce complexity and the need for collaboration

EXPLANATION

Obviously, it can do no worse than staying within the established two

day window.

You have used 1 of 3 submissions

All Rights Reserved

edX Inc. All rights reserved except where noted. EdX, Open edX and the edX and Open EdX logos are registered
trademarks or trademarks of edX Inc.

https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/eb6a807af0324d9caaaab908133f3e7c/63b1fbbfbc1b4438b2bd073bb398f635/

3/3