Solved Assignments, BSIT - 62 PART: TA 6 sem E- Commerce ~ gniithelp

Qus 1. What are the categories of operations under E-Commerce? Explain.

ANS: The following categories of operations came under e-commerce.

 Transactions between a supplier/a shopkeeper and a buyer or between two companies over a public network like the service provider network (like ISP).With suitable encryption of data and security for transaction, entire operation of selling/buying and settlement of accounts can be automated.

 Transactions with the trading partners or between the officers of the company located at different locations.

Information gathering needed for market research.

Information processing for decision making at different levels of management.

Information manipulation for operations and supply chain management.

Maintenance of records needed for legal purposes, including taxation, legal suits etc.

 Transactions for information distributions to different retailers, customers etc. including Advertising, sales and marketing.

Qus 2. What is the role of encryption in E-Commerce? Explain.

ANS: Messaging services offer solutions for communicating non-formatted (unstructured)data-letters, memos, reports – as well as formatted (structured) data such as purchase orders, shipping notices, and invoices. It supports both synchronous (immediate) and asynchronous (delayed) message delivery and processing. It is not associated with any particular communication protocol. No preprocessing is necessary, although there is an increasing need for programs to interpret the message. Messaging is well suited for both client-server and peer-to-peer computing models.

The main disadvantages of messaging are the new types of applications it enables –which appear to be more complex, especially to traditional programmers – and the jungle of standards it involves. Also, security, privacy, and confidentiality through data encryption and authentication techniques are important issues that need to be resolved.

3. Explain the architecture frame work of electronic commerce?

ANS: The electronic commerce application architecture consists of six layers of functionality, or functionality, or services: (1) applications; (2) brokerage services, data or transaction management; (3) interface and support layers; (4) secure messaging,security, and electronic document interchange; (5) middleware and structured document interchange; and (6) network infrastructure and basic communications services.

Electronic Commerce Application Services: The application services layer of e-commerce will be comprised of existing and future applications built on the innate architecture. Three district classes of electronic commerce applications can be distinguished; customer-to-business, business-to-business, and intra-organization.

Information Brokerage and Management:  The information brokerage and management layer provides service integration through the notion of information brokerages, the development of which is necessitated by the increasing information resource fragmentation. We use the notion of information brokerage to represent an intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client.Information brokerage does more than just searching. It addresses the issue of adding value to the information that is retrieved. For instance, in foreign exchange trading,information is retrieved about the latest currency exchange rates in order to hedge currency holdings to minimize risk and maximize profit. With multiple transactions being the norm in the real world, service integration becomes critical.

Secure Messaging and Structured Document Interchange Services:  The importance of the fourth layer, secured messaging, is clear. Broadly defined,messaging is the software that sits between the network infrastructure and the clients or electronic commerce applications, masking the peculiarities of the environment. In General, messaging products are not applications that solve problems; they are more enablers of the applications that solve problems.Messaging services offer solutions for communicating non-formatted (unstructured)data-letters, memos, reports – as well as formatted (structured) data such as purchase orders, shipping notices, and invoices. It supports both synchronous (immediate) and asynchronous (delayed) message delivery and processing. It is not associated with any particular communication protocol. No preprocessing is necessary, although there is an increasing need for programs to interpret the message. Messaging is well suited for both client-server and peer-to-peer computing models.

Middleware Services: Middleware is a relatively new concept that emerged only recently. With the growth of networks, client-server technology, and all other forms of communicating between /among unlike platforms, the problems of getting all the pieces to work together grew.In simple terms, middleware is the ultimate mediator between diverse softwareprograms that enables them talk to one another.
Another reason for middleware is the computing shift from application centric to data centric. To achieve data –centric computing, middleware services focus on three elements: transparency, transaction security and management, and distributed object management and services.

 Transparency:  Transparency implies that users should be unaware that they are accessing multiple systems. Transparency is essential for dealing with higher-level issues than physical media and interconnection that the underlying network infrastructure is in charge of. The ideal picture is one of a “virtual{“ network: a collection of work-group,departmental, enterprises, and inter enterprise LANs that appears to the end user or client application to be a seamless and easily accessed whole. Transparency is accomplished using middleware that facilitates a distributed computing environment. The goal is form the applications to send a request to the middleware layer, which then satisfies the request any way it can, using remote information.

 Interface and Support Services: Interface and support services, will provide interfaces for electronic commerce applications such as interactive catalogs and will support directory services – functions necessary for information search and access. Interactive catalogs are the customizedinterface to consumer applications such as home shopping.An interactive catalog is an extension of the paper-based catalog and incorporatesadditional features such as sophisticated graphics and video to make the advertisingmore attractive.

4. List the OMC’s [order Management Cycle] generic steps.?

ANS: OMC [Order Management Cycle] has the following generic steps:

• Order Planning and Order Generation
• Cost Estimation and Pricing
• Order Receipt and Entry
• Order Selection and Prioritization
• Order Scheduling
• Order Fulfillment and Delivery
• Order Billing and Account / Payment Management
• Post-sales Service

5. Explain mercantile models from the merchant’s perspective?

ANS: The order-to-delivery cycle from the merchant’s perspective has been managed with an eye toward standardization and cost. To achieve a better understanding, it is necessary to examine the order management cycle (OMC) that encapsulates the more traditional order-to-delivery cycle. OMC has the following generic steps.

.i. Order Planning and Order Generation:  The business process begins long before an actual order is placed by the customer. The first step is order planning. Order planning leads into order generation. Orders are generated in number of ways in the e-commerce environment. The sales force broadcasts ads (direct marketing), sends personalized e-mail to customers (cold calls), or creates a WWW page.

ii.Cost Estimation and Pricing:  Pricing is the bridge between customer needs and company capabilities. Pricing at the individual order level depends on understanding, the value to the customer that is generated by each order, evaluating the cost of filling each order; and instituting as system that enables the company to price each order based on its valued and cost.   Although order-based pricing is difficult work that requires meticulous thinking and deliberate execution, the potential for greater profits is simply worth the effort.

iii.Order Receipt and Entry: After an acceptable price quote, the customer enters the order receipt and entry phase of OMC. Traditionally, this was under the purview of departments variously titled customer service, order entry, the inside sales desk, or customer liaison. These Departments are staffed by customer service representatives, usually either very experienced, long-term employees or totally inexperienced trainees. In either case,these representatives are in constant contact with customers.

iv. Order Selection and Prioritization: Customer service representatives are also often responsible for choosing which orders to accept and which to decline. In fact, not all customer orders are created equal;some are simply better for the business than others.Another completely ignored issue concerns the importance of order selection and prioritization.Companies that put effort into order selection and link it to their business strategy stand to make more money.

v. Order Scheduling: During the ordering scheduling phase the prioritized orders get slotted into an actual production or operational sequence. This task is difficult because the different functional departments – sales, marketing, customer service, operations, or production-may have conflicting goals.Communication between the functions is often nonexistent, with customer service reporting to sales and physically separated from production scheduling, which reports to manufacturing or operations. The result is lack of interdepartmental coordination.

vi. Order Fulfillment and Delivery: During the order fulfillment and delivery phase the actual provision of the product or service is made. While the details vary from industry to industry, in almost every company this step has become increasingly complex. Often, order fulfillment involves multiple functions and locations. The more complicated the task the more coordination required across the organization.

vii.Order Billing and Account / Payment Management: After the order has been fulfilled and delivered, billing is typically handled by the finance staffs, who view their job as getting the bill out efficiently and collecting quickly.

viii.Post-sales Service: This phase plays an increasingly important role in all elements of a company’s profit equation: customer value, price, and cost. Depending on the specifics of the business,it can include such elements as physical installation of a product, repair and maintenance, customer training, equipment upgrading and disposal. Because of the information conveyed and intimacy involved, post sales service can affect customer satisfaction and company profitability for years.

6. What are the three type’s electronic tokens? Explain.

ANS: Electronic tokens are of three types:

• Cash or real-time. Transactions are settled with the exchange of electronic currency. An example of on-line currency exchange is electronic cash (e-cash)

• Debit or prepaid. Users pay in advance for the privilege of getting information.Examples of prepaid payment mechanisms are stored in smart cards and electronic purses that store electronic money.

• Credit or postpaid. The server authenticates the customers and verifies with the bank that funds are adequate before purchase. Examples of postpaid mechanisms are credit / debit cards and electronic checks.

7. What is e-cash? Give the properties of e-cash.

ANS: Electronic cash (e-cash) is a new concept in on-line payment systems because it combines computerized convenience with security and privacy that improve on papercash. Its versatility opens up a host of new markets and applications. E-cash presents some interesting characteristics that should make it an attractive alternative for payment over the Internet.E-cash focuses on replacing cash as the principal payment vehicle in consumer-oriented electronic payments. The predominance of cash indicates an opportunity for innovative business practices that revamps the purchasing process where consumers are heavy users of cash. To really displace cash, the electronic payment systems need to have some qualities of cash that current credit and debit cards lack. For example, cash is negotiable,meaning it can be given or traded to someone else. Cash is legal tender, meaning the payee is obligated to take it. Cash is a bearer instrument, meaning that possession is prima facie proof of ownership. Also, cash can be held and used by anyone even those who don’t have a bank account, and cash places no risk on the part of the acceptor that the medium of exchange may not be good.Properties of e-cash: E-cash must have the following four properties

• Monetary value

•Interoperability

•Retrievability

•Security

E-cash must have a monetary value; it must be backed by either cash (currency), bank-authorized credit, or a bank-certified cashier’s check. When e-cash created by one bank is accepted by others, reconciliation must occur without any problems. Stated another way, e-cash without proper bank certification carries the risk that when deposited, it might be returned for insufficient funds.E-cash must be interoperable – that is, exchangeable as payment for other e-cash, paper cash, goods or services, lines of credit, deposits in banking accounts, bank notes or obligations, electronic benefits transfers, and the like. E-cash must be storable and retrievable. The cash could be stored on a remote computer’s memory, in smart cards, or in other easily transported standard or special-purpose devices. Because it might be easy to create counterfeit cash that is stored in a computer, it might be preferable to store cash on a dedicated device that cannot be altered. This device should have a suitable interface to facilitate personal authentication using passwords or other means and a display so that the user can view the card’s contents.E-cash should not be easy to copy or tamper with while being exchanged; this includes preventing or detecting duplication and double-spending.
 Counterfeiting poses a particular problem, since a counterfeiter may, in the Internet Environment, be anywhere in the world and consequently be difficult to catch without appropriate international agreements. Detection is essential in order to audit whether prevention is working. Then there is the tricky issue of double spending (DFN88). For instance,one could use e-cash simultaneously to buy something in Japan, India, and England. Preventing Double-spending from occurring is extremely difficult if multiple banks are involved in the transaction. For this reason, most systems rely on post-fact detection and punishment.