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Dr Carver

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As the class activity to ensure correct understanding of the concepts covered in the chapter, students did a very good job. B2B e-commerce, in fact, promises many strategic benefits for participating firms, both the buyers and the sellers:

1. Cost saving for running administration, for searching products and services for buyers, for inventory management due to increased competition among the suppliers (which increases price transparency) and reducing inventory to a bare minimum, and for transaction due to the elimination of paperwork and the partial automation of the procurement process.
2. Increased production flexibility by ensuring delivery of parts “just-in-time”.
3. Improved quality of products due to increased cooperation among buyers and sellers, reducing quality issues.
4. Decreased product cycle time due to the sharing of designs and production schedules with suppliers.
5. Increased opportunities for collaborating with suppliers and distributors.
6. Increased price transparency.

The three dimensions that characterize an e-procurement market based on its business functionality are that (1) they are horizontal marketplaces (2) in which long-term contractual purchasing agreements are used (3) to buy indirect goods. Other market characteristics of e-procurement Net marketplaces are that they are independently owned, that they are many-to-many markets, and that they use fixed price catalogs. E-procurement companies serve as intermediaries connecting hundreds of online suppliers offering millions of MRO goods to business firms who pay a fee to join the market, thus it is a public marketplace. They are mediated by an independent third party that purports to represent both buyers and sellers; however, they are likely to have a bias in favor of the buyer because they include the catalogs of competing suppliers and competing e-distributors.

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