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Fundamentals of E-Commerce V6
Assignment - A
Q1. Discuss the unique features of e-commerce.
Q2. Discuss about the various types of e-commerce, with advantage of each.
Q3. Discuss
How does the Internet change consumer and supplierrelationship .
Q4. What are the principal payment systems for electronic commerce.
Q5. Discuss the role of m-commerce in business and what are the most important m
-commerce applications?
Assignment B
Q1. What are the security issues of E-commerce?
Q2. What is E-shopping? What are the advantages and disadvantages of eshopping?
Q3. Read this Case study, then answer the questions below.
Dynamic pricing at SmithKline Beecham
When the healthcare company SmithKline Beecham bought supplies of a basic solven
t recently,
the price was 15 per cent lower than the day s spot price in the commodity market.
On other
purchases, also of highly specified solvents and chemicals, SmithKline Beecham i
s regularly
beating its own historic pricing by between 7 and 25 per cent.
The reason is that SmithKline Beecham is using the Internet to hold downward or r
everse
auctions in which suppliers bid against each other for pre-specified contracts.
FreeMarkets, the
company that manages the SmithKline Beecham auctions, quotes examples of savings
achieved
by other clients in these virtual marketplaces: 42 per cent on orders for printe
d circuit boards, 41
per cent on labels, 24 per cent on commercial machinings and so on.
As well as production items, the process also works well for many services, such
as car hire
contracts.
This pricing free-for-all sounds a little shocking at first. After all, successf
ul companies are
supposed to buy on quality, nurture critical supplier relationships, and think s
trategically. And, of
course, they still do.
Guy Allen, director of purchasing at SmithKline Beecham emphasizes that the auct
ion itself is a
new part of a still rigorous buying process. It s just one tool in our toolbox, he s
ays. The
process only works if you put good purchasing management up front. This includes
issuing a
particularly detailed request for proposals (RFP) to which hopeful suppliers res
pond as usual, but
without quoting a price.
Based on the RFPs, selected suppliers are invited to take part in the auction.
Training in using the software is available. Once the bidding starts, the partic
ipants see every bid,
but not the names of the bidders. In the final stages of the auction, each last
bid extends the
bidding time by one more minute. One auction scheduled for two hours ran for fou
r hours and 20
minutes and attracted more than 700 bids.

A buyer need not necessarily accept the lowest bid, but may still prefer to use
a tried and tested
supplier at a slightly higher price. But the reverse auction offers buyers a num
ber of benefits: it
shortens the time spent negotiating separately with each supplier, the inclusion
of non-incumbent
suppliers can help to bring pricing down and, according to Mr Allen, It makes the
process a
little more transparent, since everyone can see the lowest price on offer. In ge
neral, nonincumbent
suppliers like the process, though some incumbent suppliers are a little less ha
ppy.
SmithKline Beecham is using private online auctions for global procurement of hi
ghly specified
items at a spend that is attractive to the market. In contrast, Andrew Biggs, ma
naging director of
Bidbusiness.co.uk, is providing public reverse auction facilities for what he de
scribes as low
touch products
construction bricks and sand and gravel, for example as well as ha
ulage
services and builders skips. Buyers can post their tenders on his specialist site
s and sellers can
bid for the work using a pseudonym.
Mirroring the need for liquidity in successful financial markets, auctions need
a competitive
environment and public auction sites seek to attract more buyers and sellers thr
ough features
such as Category Watch from OpenSite, the company that supplies software for Bid
business.
This feature will notify registered users by e-mail when an item of interest to
them is posted.
Now companies that provide auction facilities are looking to factor other variab
les into their
software as well, to let buyers and sellers take account of differences in trans
port costs, lead
times, duration of warranty periods and so on.
The strength of the auction is that it allows prices to fluctuate according to d
emand and factors in
the value of opportunity. But, arguably, its weakness is the fixed nature of the
event. The auction
format demands the simultaneous attention of everyone interested in that particu
lar contract or
item.
Airlines try to match availability to demand and reward early bookers by creatin
g fare classes
where some seats on a particular flight cost more than others. The problem is th
at fare classes are
determined in advance and fare differentials can be rigid, creating a blunt tool
, according to
Sharookh Cambata, president of Greaves Travel USA, an airline ticket wholesaler.
Greaves has teamed up with Equant to develop a dynamic pricing engine to automat
ically adjust
the price of airline tickets according to demand. First, the airline needs to be
able to track all
bookings into one point, so the pricing engine can view the current request agai
nst other
demands. The pricing engine must then work rapidly. Customers booking through a
web site, for
example, are not going to wait minutes for lengthy number crunching; they want a
n instant price.

Greaves will soon start trials of the new system, called Web-fares , but Mr Cambata
believes it
also has potential for other pre-booked travel services, such as hotel accommoda
tion. Using the
system, a web site user would quickly get the price for the flight or service th
ey wanted, but
could also be directed to a cheaper alternative at a different time.
Online auctions are no longer just for surplus goods or unwanted gifts, and the
advent of dcommerce
is more than marketing hype. The concept of dynamic pricing is gathering interes
t
very quickly. For example, Transco, the UK provider of gas piping infrastructure
, has recently
introduced web-based auctions to sell capacity in its pipelines, since demand fo
r gas fluctuates
according to weather and other conditions.
Dynamic pricing is a convincing example of the way in which the internet will fu
ndamentally
change the way we do business.
Questions
1. Explain how SmithKline Beecham is achieving lower prices than traditionally t
hrough ecommerce.
2. To what extent do you think this approach would work for companies smaller th
an
SmithKline Beecham?
3. What are the implications for a dynamic pricing engine referred to a supplier
and its
customers.
Assignment C
1 By Electronic Commerce we mean:
a. Commerce of electronic goods
b. Commerce which depends on electronics
c. Commerce which is based on the use of internet
d. Commerce which is based on transactions using computers connected by
telecommunication network
2 For carrying out B2B e-Commerce the following infrastructure is essential:
(i) World Wide Web
(ii) Corporate network
(iii) Electronic Data Interchange standards
(iv) Secure Payment Services
(v)Secure electronic communication link connecting businesses
a. i, ii, iii
b. ii, iii, iv
c. ii, iii, iv, v
d. i, ii, iii, iv, v
3 For carrying out B2C e-Commerce the following infrastructure is essential (i)
World Wide Web
(ii) Corporate network
(iii) Electronic Data Interchange standards
(iv) Secure Payment Services
(v) Secure electronic communication link connecting businesses
a. i, iv
b. i, iii, iv
c. ii, iii
d. i, ii, iii, iv
4 For carrying out C2C e-Commerce the following infrastructure is essential
(i) World Wide Web
(ii) Corporate network
(iii) Electronic Data Interchange standards
(iv) Secure Payment Services

(v)Secure electronic communication link connecting businesses

a. i and ii
b. ii and iv
c. i and iii
d. i and iv
5 Advantages of B2C commerce are
(i) Business gets a wide reach to customers
(ii) Payment for services easy
(iii)Shop can be open 24 hours a day seven days a week
(iv)Privacy of transaction always maintained
a. i and ii
b. ii and iii
c. i and iii
d. iii and iv
6 B2C commerce
a. includes services such as legal advice
b. means only shopping for physical goods
c. means only customers should approach customers to sell
d. means only customers should approach business to buy
7 Advantages of B2C commerce to customers are
(i)wide variety of goods can be accessed and comparative prices can be found
(ii) shopping can be done at any time
(iii)privacy of transactions can be guaranteed
(iv)security of transactions can be guaranteed
a. i and ii
b. ii and iii
c. iii and iv
d. i and iv
8 Disadvantages of e-Commerce in Africa are
(i) internet access is not universally available
(ii) Credit card payment security is not yet guaranteed
(iii) Transactions are de-personalized and human contact is missing
(iv) Cyberlaws are not in place
a. i and ii
b. ii and iii
c. i, ii, iii
d. i, ii, iii, iv
9 Electronic Data Interchange is necessary in
a. B2C e-Commerce
b. C2C e-Commerce
c. B2B e-Commerce
d. Commerce using internet
10 EDI requires
a. representation of common business documents in computer readable forms
b. data entry operators by receivers
c. special value added networks
d. special hardware at co-operating Business premises
11 EDI standards are
a. not universally available
b. essential for B2B commerce
c. not required for B2B commerce
d. still being evolved
12 In B2B e-Commerce
(i) Co-operating Business should give an EDI standard to be used
(ii) Programs must be developed to translate EDI forms to a form accepted by
application program
(iii) Method of transmitting/receiving data should be mutually agreed
(iv) It is essential to use internet
a. i, ii 1
b. i, ii, iii

c. i, ii, iii, iv
d. ii, iii, iv
13 EDI use
a. requires an extranet
b. requires value added network
c. can be done on internet
d. requires a corporate intranet
14 EDI over internet uses
a. MIME to attach EDI forms to e-mail messages
b. FTP to send business forms
c. HTTP to send business forms
d. SGML to send business forms
15 By security in e-Commerce we mean
(i) Protecting an organization s data resource from unauthorized access
(ii) Preventing disasters from happening
(iii) Authenticating messages received by an organization
(iv) Protecting messages sent on the internet from being read and understood by
unauthorized persons/organizations
a. i, ii
b. ii, iii
c. iii, iv
d. i, iii, iv
16 A firewall is a
a. wall built to prevent fires from damaging a corporate intranet
b. security device deployed at the boundary of a company to prevent unauthorized
physical access
c. security device deployed at the boundary of a corporate intranet to protect i
t
from unauthorized access
d. device to prevent all accesses from the internet to the corporate intranet
17 A firewall may be implemented in
a. routers which connect intranet to internet
b. bridges used in an intranet
c. expensive modem
d. user s application programs
18 Firewall as part of a router program
a. filters only packets coming from internet
b. filters only packets going to internet
c. filters packets travelling from and to the intranet from the internet
d. ensures rapid traffic of packets for speedy e-Commerce
19 By encryption of a text we mean
a. compressing it
b. expanding it
c. scrambling it to preserve its security
d. hashing it
20 Encryption is required to
(i) protect business information from eavesdropping when it is transmitted on in
ternet
(ii) efficiently use the bandwidth available in PSTN
(iii) to protect information stored in companies databases from retrieval
(iv) to preserve secrecy of information stored in databases if an unauthorized p
erson
retrieves it
a. i and ii
b. ii and iii
c. iii and iv
d. i and iv
21 Encryption can be done
a. only on textual data
b. only on ASCII coded data

c. on any bit string

d. only on mnemonic data
22 A digital signature is
a. a bit string giving identity of a correspondent
b. a unique identification of a sender
c. an authentication of an electronic record by tying it uniquely to a key only
a
sender knows
d. an encrypted signature of a sender
23 A digital signature is required
(i) to tie an electronic message to the sender s identity
(ii) for non repudiation of communication by a sender
(iii) to prove that a message was sent by the sender in a court of law
(iv) in all e-mail transactions
a. i and ii
b. i, ii, iii
c. i, ii, iii, iv
d. ii, iii, iv
24 In electronic cheque payments developed, it is assumed that most of the
transactions will be
a. customers to customers
b. customers to business
c. business to business
d. banks to banks
25 In Electronic cash payment
a. a debit card payment system is used
b. a customer buys several electronic coins which are digitally signed by coin
issuing bank
c. a credit card payment system is used
d. RSA cryptography is used in the transactions
26 In Electronic cash payment
(i) a customer withdraws coins in various denominations signed by the bank
(ii) the bank has a database of issued coins
(iii) the bank has a database of spent coins
(iv) the bank cannot trace a customer
a. i, ii
b. i, ii, iii
c. i, ii, iii, iv
d. ii, iii, iv
27. E-business is:
1. the use of electronic communications to support the full range of business pr
ocesses.
2. an organisation using electronic media to sell direct to its customers.
3. an organisation using electronic media to purchase from to its suppliers.
4. any electronically mediated communication between an organisation and its
stakeholders.
5. none of the above.
28. Sell-side e-commerce is:
1. any electronically mediated communication between an organisation and its
stakeholders.
2. the use of electronic communications for all business processes.
3. an organisation using electronic media to purchase from to its suppliers.
4. an organisation using electronic media to sell to its customers directly or i
ndirectly.
5. 5. none of the above.
29. Which of the following is a limitation of E-Commerce?
a. Ability to operate 24 hours a day.
b. Integration of distributor and supplier IT systems.
c. Special network and hardware requirements.
d. Increased market area

30. What type of commerce occurs when a business sells its products over the
Internet to other businesses?
a. B2B
b. B2C
c. C2B
d. Enterprise commerce
31. ________is a software that helps a web server process web pages containing
server-side scripts or tags.
a. web server
b. server operating system
c. network operating system
d. none of the above
e.
32. In order to prevent the theft of credit card numbers and banking
information, the _________________communications protocol is used.
a. TCP/IP
b. HTML
c. XML
d. SSL
33. What are plastic cards the size of a credit card that contains an embedded
chip on which digital information can be stored?
a. Customer relationship management systems cards
b. E-government identity cards
c. FEDI cards
d. Smart cards
34 Which of the following is used in B2B to pay for purchases?
a. e-commerce
b. financial electronic data interchange
c. electronic data exchange
d. electronic checks
35. An agent of the biller that accepts remittance information on behalf of the
Biller is
a. Biller payment provider (BPP)
b. Biller service provider (BSP)
c. Consolidator
d. Customer service provider (CSP)
36. A chemical manufacturer has transactions that are predominantly:
a. business to business
b. consumer to consumer
c. consumer to business
d. business to consumer
37. E-business infrastructure refers to:
a. e-business networking
b. e-business client/server environment
c. e-business applications
d. e-business content hosting
e. all of the above.
38. The website for a company is hosted on a:
a. web infrastructure.
b. Web client
c. Web page
d. Web server
39. Which of the applications has most increased business usage of the Internet?
a. World Wide Web (WWW).
b. Extensible Markup Language (XML).
c. Electronic Data Interchange (EDI).
d. Usenet Newsgroups
e. None of the above
40 The typical sequence for a web transaction is:
a. script runs on server, user presses submit on form, transmitted across Intern

et,
result returned.
b. transmitted across Internet, user presses submit on form, script runs on serv
er,
result returned.
c. transmitted across Internet, script runs on server, result returned, user pre
sses
submit on form.
d. result returned, user presses submit on form, transmitted across Internet, sc
ript
runs on server.
e. none of the above
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