IDEAS home Printed from https://ideas.repec.org/a/mts/jrnlee/v16y2016i1p1-12.html
   My bibliography  Save this article

A Cost Analysis of Amazon Prime Air (Drone Delivery)

Author

Listed:
  • Adrienne Welch Sudbury
  • E. Bruce Hutchinson

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.

Suggested Citation

  • Adrienne Welch Sudbury & E. Bruce Hutchinson, 2016. "A Cost Analysis of Amazon Prime Air (Drone Delivery)," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 16(1), pages 1-12, Fall.
    • Handle: RePEc:mts:jrnlee:v:16:y:2016:i:1:p:1-12
    as

    Download full text from publisher

    File URL: http://capone.mtsu.edu/jee/2016/pp1-12ms615.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jacek Buko & Marek Bulsa & Adam Makowski, 2022. "Spatial Premises and Key Conditions for the Use of UAVs for Delivery of Items on the Example of the Polish Courier and Postal Services Market," Energies, MDPI, vol. 15(4), pages 1-17, February.
    2. Lemardelé, Clément & Estrada, Miquel & Pagès, Laia & Bachofner, Mónika, 2021. "Potentialities of drones and ground autonomous delivery devices for last-mile logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    3. Jeng-Shyang Pan & Pei-Cheng Song & Shu-Chuan Chu & Yan-Jun Peng, 2020. "Improved Compact Cuckoo Search Algorithm Applied to Location of Drone Logistics Hub," Mathematics, MDPI, vol. 8(3), pages 1-19, March.
    4. Chen, Heng & Hu, Zhangchen & Solak, Senay, 2021. "Improved delivery policies for future drone-based delivery systems," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1181-1201.
    5. She, Ruifeng & Ouyang, Yanfeng, 2024. "Hybrid truck–drone delivery under aerial traffic congestion," Transportation Research Part B: Methodological, Elsevier, vol. 185(C).

    More about this item

    Keywords

    cost-benefit framework; drone delivery system; new technology;
    All these keywords.

    JEL classification:

    • D29 - Microeconomics - - Production and Organizations - - - Other
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mts:jrnlee:v:16:y:2016:i:1:p:1-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael Roach (email available below). General contact details of provider: https://edirc.repec.org/data/efmtsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.