Demand allocation strategies in the seasonal retail industry

Abstract

Amazon.com is a publicly-held company headquartered in Seattle, Washington. It revolutionized the retail industry by being one of the first major companies to sell goods over the Internet. It is an international company servicing countries throughout the world with goods ranging from books to jewelry. Amazon.com fulfills its customers' orders through a series of fulfillment centers throughout the United States. The goal of this thesis is to present a framework for testing and validating off-peak demand allocation strategies. Using Amazon.com as a primary study, this framework explores variable cost and transportation cost for the retail industry. The Amazon.com organization is discussed. Then a presentation on variable cost and transportation cost is introduced. A model is then introduced that ties variable and transportation costs together. This thesis concludes with a discussion on labor and transportation improvements implemented by other companies.