Exchange

EXCHANGE

Exchange is basically the act of obtaining something from something from someone by offering something in return

The conditions which are essential for exchange can be.

1. there should be two parties 
2. each party must have something that might be value to other party
3. each party should be capable of communicating and delivering
4. each party is free to accept or reject the exchange offer
5. each party believes that is suitable to deal with the other party

 COMMERCE

commerce is the entire process that  take place from the point of production of a commodity until it reaches the final consumer

it includes trade and all auxiliary services, such as banking, insurance, warehousing, communication ,transport and advertising

COMMERCE

Commerce  =        Trade     +       Auxiliary services

Trade

Local trade ; wholesale and retail trade

Foreign trade; import and export

Auxiliary services

1. Banking
2. Transportation
3. Communication
4. Insurance
5. Warehousing
6. Advisory services

Auxiliary services

1. Money and Banking

money is used to satisfy the finance requirements, investment purposes and to meet the day today operational

expenses. The term bank refers to the institutions which involved with activities such as accepting deposits from the public, safekeeping of deposits , and provide credit and overdraft facilities for the business community to assists them in their business activities.further more,commercial banks also provide the foreign trade.

2.Transport

Transport is useful in supplying goods and services to the consumers who are scattered all over the world, since different commodities and services required for the economy are produced in different areas.

Transport services in helpful in moving them to the areas where they are required.shipping and aviation services are helpful in transporting goods produced in different countries to the locations where they are required.

Ex. Sea / Air and Land Transportation
Finally transport helps to handover the produced goods to the traders so that they could be supplied to consumers on time and marketed before they perish.

3. Insurance 

In carrying out business activities , individuals as well as organizations have to face different risks. Businesses fail due to these risks insurances gets involved with business as a solution to problem . as theft, fire, and accidents weaken business activity , insurance intervenes to mitigate such risks. what insurance does is to make a loss or a risk that has to be borne individually to be shared  in common. as a loss to an insured property in compensated , it is possible for an individual to maintain the financial position without  being affected by the loss.

4. Warehousing

There is always a time lag between production and consumption . in most cases large scale production is based on future demand .While the producer produces the goods the retailer stores hem in a warehouse and releases them in installments from time to time ( sometimes the producer himself maintain a warehouse and releases the goods to the consumer from time to time ) . Hence an efficient warehousing system is required. Warehousing performs acivities such as ensuring the safety of goods , fulfilling consumer demand effectively, and eliminating price fluctuations.

5. Communication

Healthy commerce and trading activities a strong and effective medium of communication . A medium of communication would not educate the consumer but also disseminates commercial and trade information among each other. an efficient reliable information system would ensure benefits such as continuity in production , securing a good price for the products , access to new markets and minimization of costs. at present , the radio , television , newspapers , telephone , telex , e-mail and internet are being used as powerful communication media.