Roles of EDI application in business

Roles of EDI application in business:

EDI has been extensively used in showing the relationship between the buyer and seller. Auto manufacturer use EDI to transmit large, complex engineering design created on specialized computers. Large multinational firms use EDI  to send on-line price catalogs to customers listing their products, price discounts and terms. EDI capable business are able. to compare prices and terms and they are able to make direct orders by EDI  we take a small example for explaining role of EDI  application in business as follows.

1. Buyers computer passes purchase order to seller's computer

2. Seller's computer receives the purchase order and again it sends or passes purchase order confirmation to buyers computer

3. Sellers computer sends booking request to transport company's computer

4. Transport company's computer sends booking confirmation to sellers computer

5. Sellers computer sends advance slip notice to buyer's computer

Here we see that by using  EDI application the transaction had been taken place between buyer, seller and transport company within few minutes of time.

Risks associated with e-payments:

In e-commerce we have three risks which are associated with e-payment. Risk management is one of the challenging task to the e-commerce. To handle the risk management the e-payment application should be prepared to prevent mistakes and take necessary actions for further eradication's of the mistakes. In general we have three types of risks associated with e-payments.

They are :

1 Fraud or mistake 

2 Privacy issues 

3 Credit risk

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