Currently in international market and domestic market, there are two types of the purchasing methods purchaser uses. One method for the buying the products from the market is “spot market buying” and the second method of buying the products is with “future contract”. The on the spot method is also called “cash market” or “physical market”, where the products, currencies or commodities sold for cash and delivers the products immediately or within short period of time. For example, “oil, grains, silver, beef, sugar, natural gas, milk, and gold are done through the spot market, where the prices are the set by open market and the transfer of cash and goods takes place immediately”, and deliver as requested date in the future or within short period of time. The spot market is an instantaneous exchange for the current list or spot price for a particular commodity. With the integration of internet technology, the spot market has become even more efficient and useful especially in the energy industry. If energy companies have large surpluses of energy, the internet can give them a chance to find buyers in current need almost immediately. Though the spot market is good for company I need “right now”, its drawback is the fluctuating prices that can cause chaos when calculating the logistics over the long term.
There are several pros and cons of on spot buying, such as; it conducts the market research and supplier identification quickly in new market. Also, it provides easy access for lower value purchases. Moreover, it improves the sourcing productivity; as well as alleviates the capacity issues that enhance the productivity of plant and category buyers. Also, it provides easy platform ability for market tests across geographies
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...vent of the futures contract negotiated by Calpine, it did not fulfill the need for sodium hypochlorite, which implementing the spot market as a way to assure the efficiency of operations that would be the decision most logically made. If Calpine’s buyers or sellers know that they will be buying certain chemical in future, and selling certain number of products or energy, then they should consider taking a long term future contract for purchasing, and short tern future contract for selling the products which hedge its positions in market. So, operations ramp up, more energy needs to be supplied for the increased demand that was not accounted for in the purchase of the particular chemical Calpine ordered. Supply of the chemical dwindles and it up to the men and women at Calpine to search the spot market to find a company with a surplus looking to sell “on the spot.”
Express Parts, Inc. made a proposal about an internet-based trading system which would enable distributors to post inventories and prices to an internet platform and thus give customers the opportunity to shop for prices.
The Pacific Oil Company is going through renegotiations. The company grew immensely early in its conception. The Pacific Oil Company is a “producer of industrial petrochemicals” (Lewicki, Saunders, & Barry, 2010). In 1979 the Pacific Oil Company established a contract with the Reliant Corporation. Pacific Oil company was purchasing “vinyl chloride monomer” (VCM) from the Reliant Corporation. The initial contract was established in 1979, the contract was now set to expire in 1982. The contract would need to be renewed or renegotiated at this point.
· There is the possibility of the supplier integrating forwards in order to obtain higher prices and margins. This threat is especially high when
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
Inventories can also be depicted, and quantities listed. With the proper programming, once an item is ordered, it is subtracted from the inventory, thus showing the proper amount that is actually available for sale. The Internet and international business is an interesting topic- discussing an area of business that will probably be around for many years and possibly centuries to come. Since its earliest days, the Internet has been a means of communication, an essential tool in almost instant communication.
In the competitive environment, it is necessary for moving products involves reception of products at an intermediate location, store, repackage, clear customs and transport to final destination. The other factor in the supply chain logistics is speed given information flows fast in the internet era. The customer expects everything quick accustomed to the instant status access to the information. With the real time inventory, customer expects the location of the product, it is next scheduled movement and the final delivery schedule.
Operating in real time is important for supply chain management in B2C environments, because it allows manufacturers to "perfect real time transactions", which are typically requested of mega vending retailers (Reese, 2004).
Beam and Segev (1997) defined an electronic auction as a special case of electronic negotiation and an electronic reverse auction (e-RA)-synonymously named online reverse auction - is a frequently used type of electronic auction in B2B commerce. Among different procurement methods an electronic reverse auction emerged in the mid 1990s started to play an important role. Initially it was adapted by automotive and aerospace procurement managers for commodity parts. Nowadays it is applied and extensively used by many companies both of public and private sectors, non-profit organizations. Annual spend sourced by e-RAs could be normally estimated at 10-15% for an average company and at half of annual spend for aggressive players. As Moorhouse noted (2008) analysts have noted that among Fortune 500 companies, almost all private sector firms of this size employ reverse auctioning today to some extent. Fast acceptance and growing popularity of eRAs is generally explained by Internet development and based on it software systems. Smart and Harrison (2003) pointed that the Internet, and new e-Procurement applications, allow companies to trade with an almost infinite number of suppliers online at very low cost. Sustainability of this technique is confirmed by many years of efficient implementation and economic value it adds. For buyers there were some valuable advantages of this method such as automating of many issues of sourcing process for incumbent suppliers, reducing costs by attracting contender vendors, shortening time spent on purchasing and making company’s needs more open on the market. This technique also increases transparency of the process providing equal participant’s treatment due to ‘compromising free’ approach and making s...
A market economy is a society that is industrialized. For example, there are factories and workers that make goods. But a society does not need capitalism to be industrialized. A market economy is where there are people who compete. They try to get money by themselves and only for them. They are money greedy and the want it all. This is a goal and this is what a market economy focuses on. But even though society is industrialized, they have limits. They are controlled by the government. For example, Social Security is controlled by the government. When the government controls, institutions do not have many rights. For social security, there are qualifications and these qualifications are made by the government. But the poor face more problems than the rich. For example, the rich have more power and control the ways there
Let’s say in small villages & remote areas where only few people have internet access. The customer can go to their local store & use the shop keeper’s internet connection to browse & select goods from Amazon.in. The shop keeper record their order & alert customer when their products are delivered to the store. They collect the cash payment & pass the money, minus a handling fee to Amazon. This arrangement intelligently patches the problem of conducting e-commerce in a cash economy. Also, the store owners report an increased in sales of their
It is inside of the human beings nature to trade with each other since their apparition there are million of years. From the middle age to nowadays societies, the use of the currency as mean of trade become popular among societies and more people were able to establish commerce of different articles. Having Decided to open a small ice cream stand on campus called “Ice-Campused” to apply my business and economical skill I noticed that there are days where ice creams remain unsold but other days where there are not enough ice creams for the number of customers. Knowing that Fluctuating Demand corresponds to the demand in the commerce sector, which rises and falls sharply in response to changing economic conditions and consumer spending patterns there are several factors, which cause the shifts in demand.
In B2B market, the buying behavior is very distinct. There are large order sizes with strong purchasing power and also the process of buying is lengthy and complex due to paper work and also risks are high due to bulk purchases.
This shift in power from the seller to the buyer is mutually beneficial to the consumer and busines...
The high take-up of the Internet leads to variety of opportunities in front of companies. People are more online than ever. They spend many hours each day on Social Networks such as Facebook and Google+. It is no wonder that buying and selling can now be done in a more convenient way. Although traditional shopping is still thriving, online shopping can be an alternative for people wanting to save time and money. If a certain customer plan to go shopping, it could be stressful and also be time consuming. E-business has made shopping or any kind of transactions online much easier and convenient. It introduces new facilities, opportunities and way of shopping for both vendors and customers.
For instance they can purchase anything at any point of time without going out to any physical store; they can compare the prices of the product from different websites and can purchase from the site where they are getting cheaper; it also saves time; customers can also avoid pressure when having a face to face interaction with the salesperson etc. We can summarize these factors into 4 categories: