A Cost Analysis Of Amazon Prime Air (Drone Delivery)
Abstract
This paper estimates the costs of the Prime Air delivery system proposed by Amazon.com, Inc. that uses drone technology to deliver packages to customers’ doorsteps. The paper sets forth a benefit-cost analytical framework to examine the labor-saving technology of the drone system by modeling the Prime Air system in Chattanooga, TN. The model addresses FAA regulations, drone design, logistics, and related factors to predict how Amazon might set up and operate the drone system. Cost savings per package delivered of one-third or more relative to ground delivery, exclusive of R & D costs, seem feasible.
Downloads
Published
Issue
Section
License
By making research freely available, we help support the greater global exchange of knowledge. There are no article submission or processing charges. Each journal volume is preserved via the Walker Library's three level preservation methods including local and cloud storage. The author(s) retains/retain the copyright to the work, but grants the Journal the right to publish, display, and distribute the work in print and electronic format. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons CC BY-NC-ND 4.0 license that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal. For more information on this license go to https://creativecommons.org/licenses/by-nc-nd/4.0.
