The authors present four types of e-purchasing; what are they and how do they work? Which of these could be accomplished by the least IT-savvy supply chain? Why?

What will be an ideal response?

The four approaches to e-purchasing presented in the text are: 1. electronic data interchange, 2. catalog hubs, 3 . exchanges, and 4. auctions.
Electronic data interchange (EDI) is a technology that enables the transmission of routine, standardized business documents from computer to computer over telephone or direct leased lines. Special communications software translates documents into and out of a generic form, allowing organizations to exchange information even if they have different hardware and software components. Invoices, purchase orders, and payments information are some of the routine documents that EDI can handle
Catalog hubs can be used to reduce the costs of placing orders to suppliers as well as the costs of the services or goods themselves. Suppliers post their catalog of items on the hub, and buyers select what they need and purchase them electronically. The hub connects the firm to potentially hundreds of suppliers through the Internet, saving the costs of EDI, which requires one-to-one connections to individual suppliers. Moreover, the buying firm can negotiate prices with individual suppliers for items such as office supplies, technical equipment, services, and so forth. The catalog that the buying firm's employees see consists only of the approved items and the prices the buyer has prenegotiated with its suppliers. Employees use their PCs to select the items they need, and the system generates the purchase orders, which are electronically dispatched to the suppliers.
An exchange is an electronic marketplace where buying firms and selling firms come together to do business. The exchange maintains relationships with buyers and sellers, making it easy to do business without the aspect of contract negotiations or other types of long-term conditions. Exchanges are often used for "spot" purchases to satisfy an immediate need at the lowest possible cost. Commodity items such as oil, steel, or energy fit this category.
An extension of the exchange is the auction, where firms place competitive bids to buy something. For example, a site may be formed for a particular industry, and firms with excess capacity or materials can offer them for sale to the highest bidder. Bids can either be closed or open to the competition.
Answers will vary as to the least IT-intensive approach, however EDI would probably not be the best choice for this position piece.

Business

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