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Electronic Data Interchange (EDI)

Please answer following questions. Give examples and detail answers

1. What is electronic data interchange (EDI)? Describe in detail the advantages of using EDI in physical distribution activities

2. Compare and contrast direct and indirect marketing distribution channels. Describe some circumstances when direct distribution would be preferred and some circumstances when indirect distribution would be the choice.

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1. What is electronic data interchange (EDI)? Describe in detail the advantages of using EDI in physical distribution activities

Electronic Data Interchange (EDI) is an automated way of exchanging documents which come in standardized electronic form between one organization and another. It is done directly from one computer application in an organization to another. It has replaced the paper-based purchase orders, confirmations and invoices, and other related types of documents with its electronic equivalents. EDI enables organizations to connect with each other even with different equipments. There is a direct way of transacting business from one computer to another in a vendor's databases and ordering systems. It facilitates faster, easier, and cheaper means of communication and closer integration is promoted among organizations.

EDI replaces the process of faxing and mailing of paper documents through the use of specific computer record formats which are based from accepted standards between companies but each of them can be flexible for as long as it fits the needs and purposes of their business. EDI is widespread as it is used in various types of industries wherein these companies ask their partners to use EDI also for standardization and compatibility purposes. EDI improves the efficiency and effectivity in the way companies perform their tasks.

EDI is beneficial to organizations. Since there is a computer-to-computer exchange of information, paper documents are minimized and this helps cut costs. It also saves labor, time, and effort/energy in printing and sending the documents through mail. It takes and hours to send paper documents while with EDI, it only takes seconds and minutes for one document to reach another company. There are also fewer errors since the processing is done through computer systems and not by hand or manually. There is a faster flow of business transactions with EDI. When transactions are quick and fast, ...

Solution Summary

The solution discusses EDI and it compares and contrasts direct and indirect marketing distribution channels. References are not included.