Question 2 (European Distribution Network) (18 points)

In Europe, Amazon generally stocks country-specific products within that countrys DC. However,some products are pan-European and Amazon is considering reducing redundant inventories by holding some such products at only a single DC. In your second project you are asked to identify which products to pool (if any) and strategically designate a DC for each, taking inventory holding and incremental 1 shipping costs into account. You first consider three representative products (DVD, LCD HDTV, and engagement ring) and two DCs (Orleans and Bad Hersfeld). You collect information on the three products in Exhibits 12-13 below. Assume Amazon pays suppliers upon order placement.

Analyze the European distribution network.

(a) Complete the EDN tab in Excel (14 points)

(b) Recommend where Amazon should hold each product (4 points)

Explain your decisions intuitively. Intuitive explanation means that you should not refer to any calculated numbers; use only raw data to explain your decisions. For each product, please compare demand levels, demand variability, holding costs, shipping costs to justify your warehousing strategy.

Amazon.com Question 2 Step 1: Consider stocking in both DCs and serving customers from only local DCs Sten 1a: Comnute exnected incremential shinnina cost Input parameter values or formulas in green cells. To facilitate grading, please do not modify the temblate format. Amazon's service level 1 year = Step 2: Consider stocking in a single DC Stocking in France DC DVD LCD Ring Stocking in Germany DC DVD LCD Ring sing Total Weekly rost VD Tota CD Total Step 3: In your write-up, conclude where should Amazon hold each of the three products. Fxhihit 12 Product characteristics Fxhihit 13a DVD and I.C. D weeklv demand (Normal distrihution )2 Exhihit 13h Pre-set engagement ring weeklv demand When possible, Amazon bundles multiple items from the same order to save shipping cost. Discussions with the shipping group suggests that, due to carriers' weight classes, extremely light items (