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AMAZON EXAM QUESTIONS
Actual Qs and Ans Expert-Verified Explanation
This Exam contains:
-Guarantee passing score -20 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: How do Amazon's three major competitive advantages reinforce eachother
Answer:
exceptional customer experience fuels a strong BRAND which makes amazon the first place most consumers shop online more consumers--> more products (SCALE) the larger the business, the easier it is for amazon to justify vertically integrating to become its own shipper in some circumstances--> keeping prices and other costs down while speeding delivery Question 2: Why are off-line rivals unable to match amazon's efficiencies that enable them to have a negative cash conversion cycle
Answer:
Amazon has:
- extremely fast fulfillment model
- bargaining power with suppliers because they sell more goods
- scale advantages which gives them negotiating leverage to secure lower prices and longer payment
terms
Question 3: What is amazon's two sided network
Answer:
Amazon & third party sellers both sell directly to customers.more customers attract more third party sellers which attracts more customers (& so on)
Question 4: What factors enable amazon to have a negative cash conversion cycle
Answer:
amazon sells goods & collects money from customers weeks before it has to pay its suppliers rapid inventory turnover & long payment terms enable this
Question 5: What are the benefits provided by chaotic storage?
Answer:
flexibility, accuracy, simplicity, optimization
Question 6: In what ways is Amazon entering the grocery business?
Answer:
- Amazon Fresh delivery
- Fresh "click and collect" pick-up centers
- purchase of whole foods.
- Amazon Go concept (Eliminates cash registers)
Question 7: How does Amazon use customer-related data to create greater customer experince?
Answer:
product reviews: when you rate products, amazon knows what you liked and what you didn't --> more data browsing: personalized web pages, recommendations, one-click ordering, look & search inside book
A/B test: experiments on customers to collect data
Question 8: The two sided network effect
Answer:
Products get more valuable as two distinct categories of participants expand (sellers can warehouse and ship products themselves or use amazons warehouses) Question 9: How is scale important to Amazon? What advantages does scale offer Amazon over its smaller rivals?
Answer:
Scale is a significant asset to Amazon:
- It gives additional bargaining leverage with suppliers
- Allows them to offer cheaper prices in many categories than nearly every other firm, online or off
- Amazon can operate with thin margins and low prices
- Created own branded product lines
- Multiple warehouses
- offer more products
- greater product selection
same day delivery for urban areas near warehouses Question 10: Understand how Amazon uses IT to enable its chaotic storage management.
Answer:
database tracks and monitors every single product that enters/leaves the warehouse and keeps track of every single shelf space (e.g. empty or contains a product) Question 11: How does Amazon's information systems reduce errors other than random stow?
Answer:
SLAM (scan, label, apply, manufacture) packed boxes are weighed, and the software does an additional check to see if the weight is what's expected -------> if an order is too light, that's a sign that a box is missing an item, too heavy and the wrong item may be in the order Question 12: What advantage does a negative cash conversion cycle give Amazon over rivals?
Answer:
they have an additional pool of cash that it can put to work on things like expanding operations, making interest bearing investments, etc.Question 13: How does Amazon use technology to improve its operations efficiency and customer experince?
Answer:
Database `- tracks/monitors products software
- informs the picker of optimal route
- gives the optimal size of cardboard box to use
- checks whether order is missing anything by checking for correct weight
Unique barcode identifies everything:
- every incoming product is assigned a specific barcode that matches the shelf space in which it will be
stores
Question 14: What is cash conversion cycle?
Answer:
Period between distributing cash and collecting funds associated with a given operation
- focuses on the difference between paying for the inventory and selling those goods
- retailer wants this number to be small as possible
Question 15: What are Amazon's three major competitive advantages?
Answer:
Large selection, low price, & customer experience
Question 16: What is chaotic storage?
Answer:
- organic shelving system without permanent areas or sections
- The products characteristics and attributes are irrelevant
- random stow: no two similar products sit next to each other which reduces the risk a picker will confuse
a size or color or otherwise grab the wrong thing Question 17: What could be the potential contributing factors for Amazon's low/negative net income between 2006 and 2015?
Answer:
Amazon spent $12 billion building out the AWS infrastructure (Bezos refused to concentrate on quarterly results Wall Street frets over & instead focused on technological innovation.)
Question 18: What is an A/B test?
Answer:
a randomized group of experiments used to collect data and compare performance among two options studied (A & B)
Question 19: How do Amazon warehouse staff know where to find items?
Answer:
Robots bring shelves to workers, a monitor indicates the item that is needed and where it can be found on the robot-conveyed-shelf, then worker grabs item off the shelf
Question 20: Why are grocery stores attractive for Amazon?
Answer:
The grocery market is massive and could fuel significant growth for amazon.
