Homework 1 solution: Question 1:skip Question 2: (a)The two supply network designs that the distributor can propose to counter the manufacturer's proposal are the distributor storage with package carrier delivery and the distributor storage with last mile delivery.Both of these counter-proposals offer higher order visibility for the customer while having simpler information infrastructure than with manufacturer storage.The response time for both is excellent,and the customer experience is also superior to the direct model.If the manufacturer is trying to provide excellent customer service,the increased costs in transportation and potentially higher levels of inventory may be acceptable tradeoffs (b)Amazon's greatest e-business advantage comes from book sales;they are able to list millions of book titles that a physical store cannot possibly carry on their shelves.Cost advantages for Amazon are few and far between;the item price to shipping cost ratio for books,music,and software is not as high as most consumers would prefer.Amazon certainly has no cost advantage with music and software.Both are readily sold over the Internet;it would behoove Amazon to partner with another Seattle-area company to make this the norm.Electronics, hardware,and even toys are products that most consumers would like to experience before making a selection.Any cost advantage Amazon might have in these sectors may be overshadowed by an inability to hold the item on-line. Question 3: (a) Starting from the basic models in(a),we will build more advanced models in the subsequent parts of this question.Prior to merger,Sleekfon and Sturdyfon operate independently,and so we need to build separate models for each of them. Optimization model for Sleekfon: n 3:Sleekfon production facilities. m 7:number of regional markets. Dj Annual market size of regional market j Ki maximum possible capacity of production facility i cy Variable cost of producing,transporting and duty from facility i to market j Annual fixed cost of facility i Number of units from facility i to regional market j. It should be integral and non-negative.Homework 1 solution: Question 1: skip Question 2: (a) The two supply network designs that the distributor can propose to counter the manufacturer’s proposal are the distributor storage with package carrier delivery and the distributor storage with last mile delivery. Both of these counter-proposals offer higher order visibility for the customer while having simpler information infrastructure than with manufacturer storage. The response time for both is excellent, and the customer experience is also superior to the direct model. If the manufacturer is trying to provide excellent customer service, the increased costs in transportation and potentially higher levels of inventory may be acceptable tradeoffs. (b) Amazon’s greatest e-business advantage comes from book sales; they are able to list millions of book titles that a physical store cannot possibly carry on their shelves. Cost advantages for Amazon are few and far between; the item price to shipping cost ratio for books, music, and software is not as high as most consumers would prefer. Amazon certainly has no cost advantage with music and software. Both are readily sold over the Internet; it would behoove Amazon to partner with another Seattle-area company to make this the norm. Electronics, hardware, and even toys are products that most consumers would like to experience before making a selection. Any cost advantage Amazon might have in these sectors may be overshadowed by an inability to hold the item on-line. Question 3: (a) Starting from the basic models in (a), we will build more advanced models in the subsequent parts of this question. Prior to merger, Sleekfon and Sturdyfon operate independently, and so we need to build separate models for each of them. Optimization model for Sleekfon: n = 3: Sleekfon production facilities. m = 7: number of regional markets. Dj = Annual market size of regional market j Ki = maximum possible capacity of production facility i cij = Variable cost of producing, transporting and duty from facility i to market j fi = Annual fixed cost of facility i xij = Number of units from facility i to regional market j. It should be integral and non-negative