Review questions and Read CH 12

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Jan 9, 2024

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1. Explain the differences between B2B commerce and B2B e-commerce. B2B Commerce is all types of inter-firm trade while B2B e-commerce (B2B digital commerce) is that portion of B2B commerce that is enabled by the In- ternet and mobile apps. 2. What are the key attributes of a B2B e-commerce website? What early technologies are they descended from? B2B e-commerce websites are a nat- ural descendant of automated order entry systems, but there are two impor- tant differences: (1) the far less expensive and more universal Internet be- comes the communication media and displaces private networks, and (2) B2B e-commerce websites tend to serve horizontal markets—they carry products that serve a wide variety of industries. The early technologies are descended from automated order entry systems. 3. List at least five potential benefits of B2B e-commerce. • Lower administrative costs • Lower search costs for buyers • Reduce inventory costs by increasing competition among suppliers (in- creasing price transparency) and reducing inventory to the bare mini- mum • Lower transaction costs by eliminating paperwork and automating parts of the procurement process • Increase production flexibility by ensuring delivery of parts at just the right time (known as just-in-time production) 4. Name and define the two distinct types of procurements that firms make. Explain the difference between the two. direct goods and indirect goods. Di- rect goods are goods integrally involved in the production process—for in- stance when an automobile manufacturer purchases sheet steel for auto body production. Indirect goods are all other goods not directly involved in the production process, such as office supplies and maintenance products. 5. Name and define the two methods of purchasing goods. contract purchas- ing and spot purchasing. Contract purchasing involves long-term written agreements to purchase specified products, with agreed-upon terms and quality, for an extended period of time. Generally, firms purchase direct goods using long-term contracts. Spot purchasing involves the purchase of goods based on immediate needs in larger marketplaces that involve many suppliers. 6. Define the term supply chain, and explain what SCM systems attempt to do. What does supply chain simplification entail? Supply Chain - the links that connect business firms with one another to coordinate production. SCM sys- tems attempt to continuously link the activities of buying, making, and mov- ing products from suppliers to purchasing firms, as well as integrating the demand side of the business equation by including the order entry system in the process. Supply chain simplification entails reducing the size of the sup- ply chain and working more closely with a smaller group of strategic supplier firms to reduce both product costs and administrative costs while improving quality

7. Explain the difference between a horizontal market and a vertical market. horizontal market is a market that serves many different industries. vertical market is a market that provides expertise and products for a specific indus- try 8. How do the value chain management services provided by e-procurement companies benefit buyers? What services do they provide to suppliers? Value chain management (VCM) services provided by e-procurement companies in- clude automation of a firm’s entire procurement process on the buyer side. For suppliers, e-procurement companies provide catalog creation and con- tent management, order management, fulfillment, invoicing, shipment, and settlement. 9. What are the three dimensions that characterize an e-procurement mar- ketplace based on its business functionality? Name two other market charac- teristics of an e-procurement marketplace. long-term contractual purchasing of indirect goods (MRO); they create online horizontal markets, but they also provide for members’ spot sourcing of MRO supplies. Two other market char- acteristics of an e-procurement marketplace are SAP Ariba and Ariba Net- work 10. Identify and briefly explain the anticompetitive possibilities inherent in B2B e-commerce marketplaces. The anti-competitive possibilities inherent in Net marketplaces are they establish the prices of the goods they offer in four primary ways 11. List three of the objectives of a private B2B network. Three of the objec- tives of a private industrial network are Developing efficient purchasing and selling business processes industry-wide, Developing industry-wide resource planning to supplement enterprise-wide resource planning, and Increasing supply chain visibility—knowing the inventory levels of buyers and suppliers. 12. What is the main reason many of the independent exchanges developed in the early days of e-commerce failed? The main reason independent ex- changes failed is that they did not attract enough players to achieve liquidity (measured by the number of buyers and sellers in the market, the transac- tion volume, and the size of the transactions). 13. Explain the difference between an industry consortium and a private B2B network. industry consortium is an industry-owned vertical market that en- ables buyers in the industry to purchase direct inputs (both goods and ser- vices). Private B2B networks are Internet-based communication environ- ments that extend far beyond procurement to encompass supply chain effi- ciency enhancements and truly collaborative commerce where the buyers work with the sellers to develop and design new products. 14. What is CPFR, and what benefits could it achieve for the members of a private B2B network? collaborative resource planning, forecasting, and re- plenishment (CPFR)involves working with network members to forecast de- mand, develop production plans, and coordinate shipping, warehousing, and

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