1. Imagine you pay $25 to buy a swimming goggle from Amazon. You believe it is indeed worth around $30 though. Also imagine it costs $17 for amazon to deliver the goggle to you. Calculate the consumer surplus and the supply chain surplus (you need to show your calculations). How can Amazon try to increase the supply chain surplus?
2. Walmart has designed its supply chain to enable frequent replenishment at its retail stores in a cost-effective way. What is the advantage of frequent inventory replenishment (e.g., once a week) versus a less frequent one (e.g., once a month)?