A Method For Reduction of Risk E-Commerce Through Fuzzy Logic Approach

IPASJ International Journal of Management (IIJM)
A Publisher for Research Motivation........
Volume 1, Issue 1, June 2013
Web Site: http://www.ipasj.org/IIJM/IIJM.htm Email: editoriijm@ipasj.org ISSN 2321-645X
A Method for Reduction of Risk E-commerce Through Fuzzy Logic Approach

Mr. Hariom Rawat1, Dr. D. N. Goyal2
1,2
Management studies,Coimbatore, V. AnandKumar, Karpagam University Coimbatore
ABSTRACT
This work describes the event of a fuzzy call web (FDSS) for the assessment of risk in E-commerce (EC) development. A Webbased paradigm FDSS is recommended to help global organization project managers in identifying potential global organization risk factors and also the corresponding project risks. A risk analysis model for global organization development using a fuzzy set approach is projected and incorporated into the FDSS. For running the fuzzy set approach, the researchers use MATLAB code. The analysis methodology includes these stages: initially, distinctive the factors effect on the event of the Ecommerce with the assistance of experts; second, shaping the acceptable membership function for every issue. There are a unit 3 layers within the fuzzy system that each layers output is input for next layer. Then, the system calculates the ultimate risk through SUGENO logical thinking engine for E-commerce. So the recommended architecture for the model with the assistance of specialists is given during this paper.
Keywords: FDSS, E-commerce
1. INTRODUCTION
E-commerce (EC) is a trendy business methodology that addresses the requirements of organizations, merchants, and customers to chop prices while up the standard of products and services and increasing the speed of service delivery. The term additionally applies to the employment of pc networks to go looking and retrieve info in support of human and company decision making (Kalakota and Whinston, 1996). It has been adopted wide in most enterprises. Although EC offers varied business opportunities, EC development is laid low with varied forms of risk and risk management is critical to avoid these problems. Indeed, a task that's important to the correct management of EC development is that the assessment of risk. a crucial step in advancing our data requires that we have a tendency to perceive and address these risks. According to Leung et al. (1998), most project managers worry regarding the time concerned in risk management once it involves characteristic and assessing risks. However, with the help of computers and the use of package systems, the time for risk analysis are often considerably reduced. Risk analysis can be conducted by victimisation the speculation of chance, which estimates the chance and consequences of any given risk. EC development is comparatively new most firms, and solely restricted info is available on the associated risks. the appliance of fuzzy pure mathematics (FST) to risk analysis looks appropriate; per se analysis is extremely subjective and related to inexact and obscure info. There is a need to style and develop a fuzzy call support system (FDSS) to help EC practitioners to guage the risks related to EC development. This paper describes the analysis and development of a FDSS that can be wont to effectively support EC project managers in conducting risk assessment in EC development. The motivation for this work is that the recognized absence and want for a system that helps within the evaluation of a companys risk level Associate in Nursingd provides an overall risk analysis of EC development.
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Volume 1, Issue 1, June 2013 2. PREVIOUS WORK
Definitions of Risks related to EC, The conception of risk became fashionable in social science during the Twenties. Since then, it's been with success used in theories of higher cognitive process in social science, finance, and therefore the call science. The Merriam-Webster (1994) wordbook defines risk because the possibility of loss or injury or someone or something that makes or suggests a hazard. At present, there's no set universal definition of EC risk however info security may be a wide recognized facet of EC risk (Viehlandm, 2002). Greenstein (2000) views risks related to EC as the possibility of loss of confidential information or the destruction, generation, or use of information or programs that physically, mentally or financially harms another party, still because the chance of inflicting hurt to hardware. Mceachern (2001) uses the term cyber risk to define any risk related to EC - together with net site destruction and manipulation, unauthorized access to client records, net fraud, telecommunications theft, infringement of copyright and denial of access. On the other hand, Viehlandm (2002) focuses on managing business risk in EC. He defines EC risk because the chance of a negative impact to organization itself once developing or in operation EC strategy. during this paper, risks associated with EC development ar the risks of direct or indirect loss to the organization in development Associate in Nursing EC project, that refers to any project that involves development stages as coming up with, analysis, design and implementation of Associate in Nursing EC system. The Significance of Fuzzy Risk Analysis for EC Through victimisation EC, firms ar ready to connect with their commercialism partners for just in time production and just in time delivery, that improves their competitiveness globally. though EC offers nice opportunities, there's little doubt that EC development involves several risks. during this study, we have a tendency to will gift risks to EC still because the risks that EC development shares with ancient systems. each EC development is coupled to a distinct degree of risk. However, most companies don't establish and assess EC-related risk. EC development contains a ton in common with IT project development. several IT and EC development cannot be completed on-time and on-budget (Stoehr, 2002). Proper risk management is a necessary component of project success (Stoehr, 2002) as a result of while not appropriate risk management it fails to attain significant come back on investment or defensive/ competitive purpose. one among the vital phases in risk management is risk analysis, that involves a process of risk identification and risk assessment. Proper risk assessment will enhance the possibility of successful project implementation (Anderson and Narasimhan, 1979). McDonald (2000) and Stoehr (2002) point out that firms have to be compelled to perform a risk analysis before participating EC development. Fuzzy Risk Analysis analysis, The techniques of risk analysis ar powerful tools to help folks manage uncertainty. Thorough risk analysis estimation and analysis will offer valuable support for higher cognitive process. There ar several risk analysis techniques presently in use that try to evaluate and estimate risk. These techniques are often either qualitative or quantitative betting on the information offered and therefore the level of detail that's required (Bennett and Bohoris, 1996). Quantitative techniques trust heavily on applied mathematics approaches, which embrace Monte Carlo Simulation (White, 1995), Fault and Event Tree Analysis (White, 1995; Floyd Bennett and Bohoris, 1996), Sensitivity Analysis (White, 1995), Annual Loss Expectancy (Rainer and Snyder, 1991), Risk Exposure (Boehm, 1989), Failure Mode and Effects Analysis (White, 1995), etc; qualitative techniques trust more on judgment than on applied mathematics calculations such as state of affairs Analysis (Rainer and Snyder, 1991), FST (Rainer and Snyder, 1991), etc. Quantitative and qualitative techniques have their own blessings and disadvantages. Among these techniques, the application of FST to risk analysis looks appropriate; as such analysis is extremely subjective and associated with inexact and obscure info. Since FST was introduced by Zadeh (1965) to upset issues in which unclearness was gift, linguistic values have been wide wont to approximate reasoning.
3. RESEARCH OBJECTIVES
Research objectives during this paper ar as follow: To establish the factors touching E-commerce development risk To recommend a model to investigate the risks in E-commerce development supported symbolic logic Research queries Research queries during this work are: 1-What are the risks concerned within the E-commerce development? 2-What is that the sensible and reliable model of analyzing the risk in E-commerce development?
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Figure : System Architecture
RESEARCH Technique The purpose of this study is to style and develop a FDSS to help EC project managers in characteristic potential risk factors and evaluating the corresponding EC development risks. FDSS is constructed following the five-stage system development methodology, that is predicated on a generic IS development (Nunamaker, 1990), incorporated with the method for fuzzy risk analysis (Schmucker, 1984; Tee and expert, 1991; Tah and Carr, 2000; Wat and Ngai, 2001). though this method development methodology is developed for the FDSS, we believe that different researchers will simply follow as a tenet to design and develop different FDSS for risk analysis in other application areas. The system development process consists of 5 stages, namely, construction of fuzzy risk analysis model, development of system architecture, analyzing and planning of the system, building of the example, and analysis of the system. an summary of those 5 stages of system development is shown in figure one. First, a fuzzy risk analysis model was made because the kernel of the system. Second, system design was developed. Third, system style and analysis were distributed in modularity with process functionalities of the system components Associate in Nursingd an understanding of however they move with one. Fourth, the example system was inbuilt order to find out additional regarding the ideas, framework, and design through the system-building method. Finally, the example system was evaluated by EC consultants and potential users. elaborate descriptions of every part are given within the following sections. To outline the membership functions and calculate the risks and develop the model, we've got used MATLAB package. Also, Visual Basic is chosen for development of the fuzzy risk analysis element.
4. RESULTS AND DISSCUSSION

Constrauct a Fuzzy Risk Analysis Model Most existing risk analysis models are supported quantitative techniques like Monte Carlo Simulation and Annual Loss Expectancy. However, the information that's associated with most uncertainty factors is not numerical. FST provides Associate in Nursing approximate model for the analysis of the danger Janus-faced by EC comes through a linguistic approach. The procedure for fuzzy risk analysis is predicated on the works from Refs. (Schmucker, 1984; Tee and expert, 1991; Tah and Carr, 2000; Wat and Ngai, 2001) that consisted of 5 steps: risk identification, language illustration, fuzzy assessment aggregation, fuzzy weighted average computation, and linguistic
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approximation. The following sections provides a elaborate description of every step. Risk Identification The first step is to conduct risk identification and compile an inventory of the foremost important uncertainty factors and their descriptions. Before conducting fuzzy risk analysis, one should establish the elements of risks associated with EC development. However, little empirical research has targeted on characteristic the potential risk factors that threaten EC development. In the study of Wat et al. (2004), a source-based approach to categorizing EC development risks is at the start used, with technical, structure, and environmental risks as 3 primary supply classes. Then the potential risks related to EC was known with fifty one risk items (table 2) related to EC development based mostly on a comprehensive literature review and interviewed with EC practitioners. Associate in Nursing empirical study was conducted with forty eight interviews expertly used for the analysis. The demographic characteristics of expertise ar shown in table one. An alpha correlational analysis (EFA) of the survey data unconcealed ten major dimensions of risks associated with EC development, namely: (1) resources risk, (2) requirements risk, (3) marketer quality risk, (4) clientserver security risk, (5) legal risk, (6) social control risk, (7) outsourcing risk, (8) physical security risk, (9) cultural risk, and (10) reengineering risk (figure 2). As a result of the study (Wat and Ngai, 2004) the danger classification framework as shown in figure a pair of helps within the formulation of ways of accessing risks to EC development. In continuous we have a tendency to categorise these ten variables to three levels; Technical, structure and environmental level Natural Language illustration According to Karwowski and Mital (1986), traditional approaches to risk assessment acquire their overall risk scores by calculative the merchandise of exposure, likelihood, and therefore the consequences of a possible accident attributable to the hazard. an easier approach that is advocated by some risk consultants is to multiply the severity of consequences by the chance of their occurrence, because the chance of incidence automatically includes exposure (Waring and Glendon, 1998). for instance, Jakob Behmen (1989) outlined risk impact as the product of the chance of Associate in Nursing unsatisfactory outcome (Likelihood) and therefore the loss to the parties affected once the result is unsatisfactory (Severity). Consequently, 2 linguistic variables, Likelihood and Severity, ar outlined to calculate the risk. In FWA, Likelihood is that the rating issue (Ri), and Severity is that the coefficient issue (Wi) that corresponds to rating clotting factor. each linguistic variables have 5 terms. Likelihood is expressed in terms of Very Unlikely, Unlikely, Medium, Likely, and Very likely (figure 3). Severity is expressed as Minimal, Low, Moderate, High, and Critical (figure 4). during this study, the membership functions of the linguistic terms are characterised by triangular fuzzy numbers, as these ar fairly often used in applications like fuzzy controllers, and in managerial higher cognitive process, business and finance, and the social sciences, etc. (Bojadziev and M. Bojadziev, 1997).
5. CONCLUSION
EC development takes place during a complicated and dynamic atmosphere that features high levels of risk and uncertainty. This study has made public An approach to the assessment of the risks related to European Economic Community development victimisation FST. A model of fuzzy risk analysis was planned to help European Economic Community project managers and decision manufacturers in formalizing the kinds of thinking that are needed in assessing this risk environment of their European Economic Community development during a lot of systematic manner than before. The model is running with MATLAB computer code, shaping membership operate, then victimisation SUGENO logical thinking engine to calculate final risk. A Web-based FDSS is recommended and to incorporate the planned risk analysis model. System evaluation was performed to establish whether or not the FDSS achieved its designed purpose, and therefore the results were satisfactory. The results of the analysis powerfully supports the validity of the study approach to risk analysis victimisation fuzzy sets, and demonstrates the feasibility of evaluating European Economic Community project risk. it absolutely was assumed that the weighting assigned by every authority in the risk analysis was constant, however the relative importance placed on bound factors by individual decision manufacturers and consultants might be wide completely differrent. Further analysis is required to develop completely different weightings for various evaluators. Validity of the Model The validity of the model is given in table four using one-sample t-test with the assistance of consultants. Due to the many levels of the take a look at ar below five-hitter, and all the suggests that for variables of the model are over 5, then the validity of the model is observed. The researchers with the assistance of experts data and through a customary form show the validity of the model by testing the models variables. Benefits of victimisation FDSS
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FDSS had been prompt and therefore the results of the system analysis will show that FDSS is applied effectively for managing risks related to European Economic Community development. The computations concerned within the model of fuzzy risk analysis ar tedious if performed manually. It is a straightforward task and therefore the time for risk analysis is significantly reduced. The Web-based FDSS automates a form instrument for risk assessment that helps the European Economic Community project managers to see the general risk of EC development. the advantages of victimisation the system are as follows. Risks related to European Economic Community development are known. These risk things function a list that cowl potential risks related to European Economic Community development in technical, organizational, and environmental dimensions. EC project managers or European Economic Community practitioners is wise and be able to acknowledge the risks related to European Economic Community development. EC project managers will predict the general risk of the project before begin the implementation. AN overall risk index is used as early indicators of project issues or potential difficulties. Evaluators will keep track to evaluate this risk level of their European Economic Community development. The system provides an efficient, systematic, and more natural manner by victimisation the planned fuzzy risk analysis model. Evaluators will simply merely use the danger evaluation list and use the linguistic terms to evaluate the European Economic Community development risk level. Prioritization is important to produce focus for important risks. an inventory of hierarchal risk things associated with European Economic Community development are made. Therefore, the most serious risk item are addressed 1st Limitations of This Study Although the FDSS comes out with several advantages, it still has some limitations. the restrictions of that are summarized below. In spite of the very fact that the system shows a satisfactory read within the effectiveness and value, but FDSS don't get the possibility to check it with real-life EC comes. The validity of the system is established through in-depth case studies. This analysis solely provides the danger things supported the risk classification framework shown in figure two. The list of risks shown in Table two isn't thoroughgoing, but it is comprehensive enough for the aim of this study. For simplification, the membership functions were evenly distributed by triangular fuzzy numbers. Various membership functions have to be compelled to be calculable to be as realistic as potential.
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[14.] Wat, F. K. T., Ngai, E. W. T. and Cheng, T. C. E. (2004). Potential Risks to Ecommerce Development Using Exploratory Factor Analysis, International Journal of Services Technology and Management, (in press). [15.] Webster, M. (1994). The Merriam-Webster Dictionary, Merriam-Webster, Springfield, MA. [16.] White, D. (1995). Application of Systems Thinking to Risk Management: A Review of the Literature, Management Decision, 3 (10), pp. 35 45.
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IPASJ International Journal of Management (IIJM)

A Publisher for Research Motivation........

Volume 1, Issue 1, June 2013

Web Site: http://www.ipasj.org/IIJM/IIJM.htm Email: editoriijm@ipasj.org ISSN 2321-645X