Response to the following problem:
Record Sales Volume at Amazon.com
Have you ever realized the day before a special occasion that you forgot to purchase a gift for someone? Have you ever thought of going online, purchasing a gift, and getting it delivered the very next day? On December 24 of a recent year, more than 70,000 gift certificates were ordered on Amazon.com. These certificates were delivered, via e-mail, on December 25. Recently Amazon.com, headquartered in Seattle, experienced its busiest holiday season and set a single-day record for items ordered- averaging 24 items per second! In a letter to stockholders, Jeffrey P. Bezos, the founder and CEO of Amazon.com, explained about a Customer Review feature that had been established. This feature allows customers to rate both products and vendors. Mr. Bezos noted that "negative reviews cost us some sales in the short run." Also, an Instant Order Update feature reminds customers that they have already ordered an item if they order the same item again. Mr. Bezos stated that this feature "slightly reduced sales."
Critical Thinking
1. If the Customer Review feature and the Instant Order Update feature both reduce sales, why would Amazon.com continue to make these features available to its customers?
2. What problems might occur when Amazon.com receives orders at the rate of 24 items per second?