Problem 3: (Buffer Strategy) [20 points total]

The following comes from the April 1, 2017 edition of the Chicago Tribune:

Delivery services vie to offer instant or at least same-day gratification

Lauren Zumbach, Contact Reporter, Chicago Tribune

Not long ago, two-day delivery was considered a premium service. And fast, too. Fast enough, it seemed.

Now new services from Amazon and startup competitors are trying to get shoppers' purchases to them even faster.

Analysts said that while there's a reason a takeout dinner needs to get the customer in 60 minutes or less, it's less clear shoppers will be willing to pay for the same service when it comes to retail products, which rarely need to arrive so quickly.

According to a survey by Forrester Research, 29 percent of U.S. online shoppers said they're interested in guaranteed same-day delivery, a relatively small share, said e-commerce analyst Brendan Witcher.

"And interested doesn't mean they're going to pay for it," he said, particularly when so many retailers offer a free shipping option that in some cases isn't much slower.

A rapidly growing field

Companies handling the deliveries, and some customers, say it's not always about needs.

Mark Morris, 31, likes the convenience of Amazon Prime's same-day service, though he wouldn't be willing to pay extra. "There aren't a lot of things I can't find just down the street," he said.

Explain the operational and financial implications, in terms of customer service and profit, of the same day delivery strategy. Please make specific reference to the Factory Physics Framework and the portfolio of buffers in your answer.

1. In Control
2. Out of Control

Lauren Zumbach, Contact Reporter, Chicago Tribune

Not long ago, two-day delivery was considered a premium service. And fast, too. Fast enough, it seemed.

Now new services from Amazon and startup competitors are trying to get shoppers' purchases to them even faster.

Analysts said that while there's a reason a takeout dinner needs to get the customer in 60 minutes or less, it's less clear shoppers will be willing to pay for the same service when it comes to retail products, which rarely need to arrive so quickly.

According to a survey by Forrester Research, 29 percent of U.S. online shoppers said they're interested in guaranteed same-day delivery, a relatively small share, said e-commerce analyst Brendan Witcher.

"And interested doesn't mean they're going to pay for it," he said, particularly when so many retailers offer a free shipping option that in some cases isn't much slower.

A rapidly growing field

Companies handling the deliveries, and some customers, say it's not always about needs.

Mark Morris, 31, likes the convenience of Amazon Prime's same-day service, though he wouldn't be willing to pay extra. "There aren't a lot of things I can't find just down the street," he said.

Explain the operational and financial implications, in terms of customer service and profit, of the same day delivery strategy. Please make specific reference to the Factory Physics Framework and the portfolio of buffers in your answer.