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Amazon is considering expanding its logistics network by investing $1 billion in new fulfillment centers. Each center is expected to reduce delivery times by 50%
Amazon is considering expanding its logistics network by investing $1 billion in new fulfillment centers. Each center is expected to reduce delivery times by 50% and operational costs by 20%. Amazon estimates $500 million in annual cost savings from the investment.
Requirements:
- Present the investment costs and expected annual savings in a bullet-point format.
- Calculate the ROI and payback period for the fulfillment center expansion.
- Determine the net present value (NPV) and internal rate of return (IRR) for the investment.
- Analyze the strategic importance of improving logistics efficiency for Amazon.
- Discuss potential risks and challenges associated with the expansion project.
- Recommend operational strategies to maximize cost savings and efficiency gains.
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