Page 279 - Data Science Algorithms in a Week

260 Oloruntomi Joledo, Edgar Gutierrez and Hatim Bukhari

2016; Lin & Liu, 2008) where identifying the relevant parameters is essential to profit
maximization.

FRAMEWORK FOR SIMULATING AN ECOMMERCE BUSINESS MODEL

A generic conceptual C2C framework is developed to manage system complexity,
assess viability and evaluate system behavior. To decompose the problem, system
boundaries are considered to identify strategic and tactical problem solving opportunities
(Joledo, 2016). Viewing this space as a complex system characterized by uncertainty and
varying behaviors, the proposed steps are as follows:

i. Identify all the stakeholders in the system
ii. Identify the factors (internal and external) that influence the system
iii. Evaluate the competitive landscape of the business model
iv. Define the system supply chain
v. Specify performance metrics
vi. Specify interactions between components
vii. Model the behavior of the system, and
viii. Analyze the results of the model implementation

Figure 1 illustrates how characteristics of the system are employed in developing the
proposed framework. As previously identified, organizations face an ever-increasing
number of challenges and threats such as changes in market, competitors, customer
demands and security. These risks are used to generate a mechanism for risk
classification assignable to system characteristics. The needs of the stakeholders are then
integrated into the developed framework since they define what brings value to the
system.
The ecommerce system is influenced by internal and external factors. Internal factors
include the cost of operation, management actions and policies, processes involved in
delivering value to the customers, risks associated with implementing the business model
and generated income. External factors are uncontrollable but it is imperative that the
organization responds in ways to adequately manage them. These factors include the
change in market, activities of competitors, customer demand, government regulations
and the global economy.
Managing the supply chain of the system exposes the inefficiencies associated with
achieving organizational goals. The C2C ecommerce space is mapped in order to identify
the suppliers, clients and communication requirements. Based on the information
obtained from this stage, the modeling of system complexity is applied for dynamic
analysis.