QUESTION FOUR

Amazon can join a consortium to pool demand from many different companies and increase its purchasing power. Critically discuss each of benefits and drawbacks listed below, Amazon can encounter by joining a purchasing consortium: $(25)$

Benefits

$-$ Economies of Scale

$-$ Economies of Process

$-$ Economies of Information

Drawbacks

$-$ Set$-$up Costs

$-$ Longer lead times

$-$ Reduced Flexibility.