OIM 210 1nd Edition Lecture 5 Outline of Last Lecture 1. Moore’s Law2. E-wasteOutline of Current Lecture 1. Amazon’s Business ModelCurrent Lecture- Amazon’s warehouse per square foot is the equivalent of 17 Rhode Islands. Huge warehouse selection- All Amazon employees must spend at least 2 days every 2 years at the customer service desk- Amazon is very customer focused. This is very unlike other company’s business models- For instance, the Amazon prime and Amazon prime air creation helps deliver goods to customers faster than ever before- Speed is king in retail- Amazon has very impressive cash conversion. In fact they have negative cash conversion which means they get the money from the customer before they get the product and still manage to deliver the product at an incredible speed- Innovation drives Amazon’s business model. For example, the use of robots to organize merchandise has greatly improved Amazon’s business- Amazon also uses Dynamic Pricing. Dynamic Pricing is when the price of a product variesbased on supply and demand- A/B testing is used frequently in Amazon’s design planningo Give customers two, or more different options, and see which one converts the most sales- Collaborative filtering also has huge conversion rates. This is when they suggest other items they think you might be interested in- Also use an economy of scale. Have the long tail, essentially meaning they have just about every product you can imagine- Amazon Web Services is another way Amazon thrives. Amazon Web Services helps othercorporations run their business online and on the cloud - 80% of startups use Amazon Web Services These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a