Question

The company used is Amazon

1. Are their business customers typically Users, OEMs, or Dealers/Distributors? Identify one specific customer as an example. You should really understand the differences between these three groups of customers.

2. Who would be an “upstream” supplier to your firm? What risks might your firm encounter in their supply chain relationship with this upstream provider, and how might they try to reduce the risk?

Answer 1

a) The business customers in the case of our firm which is Amazon is typically an end user. For example, a business customer could be a newspaper printing shop and it could be purchasing newsprint from Amazon for better prices and easier fulfillment. They use the newsprint for printing of newspaper and they do not indulge in direct distribution or dealership. Similarly they are not manufacturing any specific equipment and hence they are plain users of this item.

b) An upstream supplier to our firm may be a paper manufacturer. The supply chain risk that our firm faces is that due to disruption in production at one of the paper manufacturers, the supply of paper which can be sold over the online platform may be disrupted. To reduce the risk, one need to have supply relationship with multiple firms to supply them with newsprint as required and not be fully dependent on a single vendor.