BSIT-62 E-Commerce

Assignment: TA (Compulsory)
1) What are the categories of operations under E-Commerce? Explain.
Ans:-Broadly speaking the following categories of operations came under ecommerce:
i. 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 dataand
security for transaction, entire operation of selling/buying and settlement of accounts can be
automated.
ii. Transactions with the trading partners or between the officer of the company located at different
locations.
iii. Information gathering needed for market research.
iv. Information processing for decision making at different levels of management.
v. Information manipulation for operations and supply chain management.
vi. Maintenance of records needed for legal purposes, including taxation, legal suits etc.
Vii.Transactions for information distributions to different retailers, customers etc. including
advertising, sales and marketing.
2) What is the role of encryption in E-Commerce? Explain.
Ans:-Encryption can help with authentication, non repudiability, and asset
management.Authentication is also a significant problem, and the vendor is usually responsible to
ensure that the person using the credit card is its owner. Without encryption there is not way to do
this.Security- public-key encryption techniques are being incorporated in various electronic
mail systems. This will enable systems to ensure the privacy of EDI messages.
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 i
nterchange; and (6) network infrastructure and basic communications services.

(i) 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 in
tra-organization.
(ii) 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, orprofit
maximization for a client.Information brokerage does more than just searching. It addresses the
issue of addingvalue 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.
(iii) 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 customized interface to consumer applications such
as home shopping.An interactive catalog is an extension of the paper-based catalog and
incorporates additional features such as sophisticated graphics and video to make
the advertisingmore attractive.
(iv) 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 clientsor electronic commerce
applications, masking the peculiarities of the environment. Ingeneral, 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)dataletters, 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.
(v) 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 software programs that
enables them talk to one another. Another reason for middle ware is the computing shift from
application centric to data centric. To achieve data centric computing, middle
ware services focus on three elements: transparency, transaction security and management, and
distributed object management and services.
(vi) 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 interenterprise LANs that appears to the end user or
client application to be a seamless and easily accessed whole. Transparency is accomplished using
middle ware 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.
4. List the OMCs [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 merchants perspective?
ANS:- The order-to-delivery cycle from the merchants 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 a 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 entryphase 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, longterm 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 reportsto
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 companys 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 types 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 paper cash. 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 practice 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

prime facile proof of ownership. Also,

cash can be held and used by anyone even those who dont have a bank account, and cash places
no risk on the part of the accept-or that the medium of exchange may not be good.Properties of ecash: 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), bankauthorized credit, or a bank-certified cashierscheck. When e-cash created by one bank is accepted
by others, reconciliation must occur without any problems. Stated another way, ecash without proper bank certification carries the risk that when deposited, it might be returned for
insufficient funds.E-cash must be inter-operable that is, exchange able

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
computers 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 canview the cards 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 Internetenvironment, be
anywhere in the world and consequently be difficult to catch withoutappropriate 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.
Assignment: TB (Compulsory)
PART A
1. Explain different operations carried out in e-commerce.
Ans:- 1) Transaction 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.
2) Transaction with the trading partners or between the officers of the company located at different
locations.
3) Information gathering needed for market research.
4) Information processing for decision making at different levels of management.
5) Information manipulation for operations and supply chain management.

7) Transaction for information distributions to different retailers, customers etc. Including adverting,
sales and marketing.
The use of computers in these area not only make the operations quicker, but also error free and
provides for consolidated approach towards the problem.It is not that the concept of e-commerce is
totally without side effect.There are several areas of security, safety against fraud etc., the concept of
legal acceptance that is however to be solved.
2. What are the basic banking services provided in e-commerce ?
Ans:1).Basic banking services: -normal customer would be transacting with his bank most of the time.
They are mainly related to personal finances. A customer has with his bank can be classified into the
following:
i) Checking his accounts statements ii) Round the clock banking (ATM) iii) Payment of bills etc. iv)
Fund transfer and v) Updating of his pass books etc.
2).Home shopping: -We assume it is television based shopping. It may be noted that this concept is
picking up now in India in a small way, wherein the channels set apart only a very small portion of
their broadcasting time to teleshopping. Customer can order the items over phone. The goods are
delivered to his home and payment can be made in the normal modes. Concepts of traditional
marketing like negotiations, trial testing etc. are missing from this scheme and it is most suitable for
those customers who are almost sure of what they need to buy but who are to busy to go to the
shops.
3).Home entertainment: The next example of this type of commerce is home entertainment.
Dubbed on line movies, it is possible for the user to select a movie/CD online and make his cable
operator play the movie exclusively for him (movie on demand) cause against payment like Tata
Sky. Payment can be either online/ payable to his account. It is also possible to play interactive
games online/download them to your computer to play. The concept of downloading games/news
etc. At a cost to the mobiles is also a similar concept.
4).Micro-transaction for information: The telephone directories provide a basic type of microtransaction. If we want by one particular type of item say books they list the addresses and
phone numbers of the various book dealers whom we may contact. Similar facilities are available on
the internet may be for more number of items and also with more details. This can be though of as
an extension of the earlier described television based ordering.
3. Explain the three stages of e-commerce architecture on web ?
Ans:The electronic commerce application architecture consists of six layers of functionality or services:

(1) Applications Services: The application services layer of e-commerce will be comprised of existing
and hope applications built on the native architecture.
(2) Brokerage services, data or transaction management: The information brokerage and
management layer provides service integration through the concept of information brokerages, the
development of which is necessitated by the increasing information resource fragmentation. The
concept 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. 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. The brokerage function is the support for data management and traditional
transaction services. Brokerages may provide tools to accomplish more sophisticated, time-delayed
updates or future- compensating transactions.
(3) Interface and support layers: Interface and support services, will provide interfaces for electronic
commerce applications such as interactive catalogs and will support directory services job needed
for information search and access. Interactive catalogs are the modified interface to consumer
applications such as home shopping. An interactive catalog is an extension of the paper-based
catalog and incorporates additional features. The primary difference between the two is that unlike
interactive catalogs, which deal with people, directory support services interact directly with software
applications. For this reason, they need not have the multimedia flash and ballet generally
associated with interactive catalogs.
4. What are the desirable characteristics of an electronic market place ?
Ans:- Desirable characteristics of E-Marketplace:
The following criteria are essential for consumer-oriented electronic commerce:
i).Critical mass of buyers and sellers. The trick is getting a critical mass of corporations and
consumers to use electronic mechanisms. In other words, the electronic marketplace should be the
first place customers go to find the products and services they need.
ii).Opportunity for independent evaluations and for customer dialogue and discussion. In the
marketplace, not only do users buy and sell products or services, they also compare notes on who
has the best products and whose prices are outrageous. The ability to openly evaluate the wares
offered is a fundamental principle of a viable marketplace.
iii).Negotiation and bargaining. No market place is complete if it does not support negotiation.
Buyers and sellers need to be able to haggle over conditions of mutual satisfaction, including money,
terms and conditions, delivery dates, and evaluation criteria.

iv).New products and services. In a viable marketplace, consumers can make requests for products
and services not currently offered and have reasonable expectations that someone will turn up with
a proposed offering to meet that request.
v).Seamless interface. The biggest barrier to electronic trade is having all the pieces work together
so that information can flow seamlessly from one source to another. This requires standardization.
On the corporate side, companies need compatible EDI software and network services in order to
send electronic purchase orders, invoices, and payments back and forth.
5. Explain electronic tokens present in payment systems.
Ans:- None of the banking or selling payment methods is completely adequate in their present form
for the consumer-oriented e-commerce environment. Totally new forms of financial instruments are
also being developed. One such new financial instrument is electronic tokens in the form
of electronic cash / money or checks. Electronic tokens are designed as electronic analogs of
various forms of payment backed by a bank or financial institution. Simply stated, electronic tokens
are equivalent to cash that is backed by a bank. 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.
PART B
1. a) How does the commence and e-commerce are related ? Explain.
(chech answer itself)
Ans:- Concept of Commerce and E-Commerce: -Commerce is normally associated with the buying
and selling of items. Commerce is one of the oldest activities of human beings and the concept of
traders selling and buying items is a part of history. Markets are a common place where the buyers
and sellers meet along with their products. Money is also an essential part of the market place. The
concept of money, we have several concepts of banking, various methods of representing and
transferring money like cheques, MOUs, Drafts etc.
The key element of e-commerce is information processing. Every stage of commerce, except of
route production of goods and their physical delivery can be automated. The tasks that can be
automated include information gathering, processing, and manipulation and information distribution.
b) What are the desirable characteristics of e-commerce ?

Ans:- Desirable characteristics of E-Commerce: Commonsense tells us that few transactions are
friendlier for e-marketing than others. We list out the desirable features of a hypothetical market
pace let us call it e-market.
a).A minimal size of the place: Obviously for any such place to thrive there is a critical size, below
which it is not profitable to operate. This minimal number of buyers and sellers characterizes the
profitability of the place.
b).A scope for interactions: Interactions include trial runs of the products, classifications of doubts on
the part of the customers, details of after sales services, ability to compare different products and of
course scope for negotiations and bargaining.
c).Scope for designing new products: The customer need not buy only what is available. He can ask
for modifications, up-gradations etc. The supplier must be able to accept these and produce made to
order items.
d).A seamless connection to the marketplace: It is obvious that each customer will be operating with
a different type of computer, software, connectivity etc. There should be available standards sot that
any of these costumers will be able to attach himself to any of the markets without changing his
hardware/software/interfaces etc.
e).Recourse for disgruntled users: It is nave to believe that transaction of such a place end up in
complete satisfaction to all parties concerned. Especially because of the facelessness of the
customer and the supplier, there should be a standard recourse to settle such disputes.
2. a) Explain the architecture frame work of electronic commerce ?
Ans:- The electronic commerce application architecture consists of six layers of functionality or
services:
(1) Applications Services: The application services layer of e-commerce will be comprised of existing
and hope applications built on the native architecture.
Three district classes of electronic commerce applications can be famous:

a) Customer-to-

business: b) Business-to-business: c) Intra-organization:

(2) Brokerage services, data or transaction management: The information brokerage and
management layer provides service integration through the concept of information brokerages, the
development of which is necessitated by the increasing information resource fragmentation. The
concept 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
(3) Interface and support layers: Interface and support services, will provide interfaces for electronic
commerce applications such as interactive catalogs and will support directory services job needed

for information search and access. Interactive catalogs are the modified interface to consumer
applications such as home shopping. An interactive catalog is an extension of the paper-based
catalog and incorporates additional features.
(4) Secure messaging, security, and electronic document interchange: The importance of the fourth
layer, secured messaging, is clear. Messaging is the software that sits between the network
infrastructure and the clients or e-commerce applications, masking the peculiarities of the
environment. Messaging products are not applications that solve problems; they are more enablers
of the applications that solve problems.
(5) Middleware and structured document interchange: Middleware is a relatively new concept. With
the growth of networks, client-server technology, and all other forms of communicating between /
among unlike platforms, the harms of getting all the pieces to work together grew. Middleware is the
ultimate mediator between diverse s/w programs that enables them talk to one another. Middleware
is the computing shift from application centric to data centric.
(6) Network infrastructure and basic communications services: 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. Transparency is accomplished using middle ware that facilitates a
distributed computing environment. Marketing researchers have isolated several types of
purchasing:
1.Specifically planned purchases. The need was recognized on entering the store and the shopper
bought the exact item planned.
2.Generally planned purchases. The need was recognized, but the shopper decided in-store on the
actual manufacturer of the item to satisfy the need.Reminder purchases. The shopper was
reminded of the need by some store influence. This shopper is influenced by in-store
advertisements and can substitute products readily.
3.Entirely unplanned purchases. The need was not recognized entering the store like gift items.
b) List the OMCs (order management cycle) generic steps.
Ans:- 1)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.
2)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 bye each order, evaluating the cost of filling each order.

3)Order Receipt and Entry: After an acceptable price quote, the customer enters the order receipt
and entry phase of OMC.
4)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.
5)Order Scheduling: Ordering scheduling phase the prioritized orders get slotted into an actual
production or operational sequence.
6)Order Fulfillment and Delivery: The order fulfillment and delivery phase the actual provision of the
product or service is made.