MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The six important business objectives of information technology are new products, services, and business models; customer and supplier intimacy; survival; competitive advantage; operational excellence; and 1) _______ A) improved flexibility. B) improved business practices. C) improved decision making. D) improved efficiency. 2) Dell Computer's use of information systems to improve efficiency and implement "mass customization" techniques to maintain consistent profitability and an industry lead illustrates which business objective? 2) _______ A) survival B) improved flexibility C) competitive advantage D) improved business practices 3) Verizon's implementation of a Web-based digital dashboard to provide managers with real-time information such as customer complaints is an example of 3) _______ A) customer and supplier intimacy. B) improved efficiency. C) improved flexibility. D) improved decision making. 4) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the use of information systems to achieve which business objective? 4) _______ A) improved efficiency B) competitive advantage C) customer and supplier intimacy D) survival 5) The three activities in an information system that produce the information organizations use to control operations are 5) _______ A) input, processing, and output. B) input, output, and feedback. C) information retrieval, research, and analysis. D) data analysis, processing, and feedback. 6) An example of a business using information systems to create new products and services is 6) _______ A) the Mandarin Oriental hotel's customer-preference tracking system. B) Apple Inc.'s iPod. C) Verizon's Web-based digital dashboard. D) Wal-Mart's RetailLink system. 7) An example of a business using information systems to attain operational excellence is 7) _______ A) the Mandarin Oriental hotel's customer-preference tracking system. B) Apple Inc.'s iPod. C) Wal-Mart's RetailLink system. D) Verizon's Web-based digital dashboard. 8) Which systems are typically a major source of data for other systems? 8) _______ A) decision-support systems B) executive support systems C) transaction processing systems D) management information systems 9) ________ systems are especially suited to situations in which the procedure for arriving at a solution may not be fully defined in advance. 9) _______ A) Decision-support B) Knowledge management C) Transaction processing D) Management information 10) Executive support systems are information systems that support the 10) ______ A) knowledge and data workers in an organization. B) long-range planning activities of senior management. C) decision making and administrative activities of middle managers. D) day-to-day processes of production. 11) Non-typical business problems with causes and effects that are rapidly changing are typically handled by which type of information system? 11) ______ A) TPS B) DSS C) ESS D) MIS 12) Which type of system would you use to determine the five suppliers with the worst record in delivering goods on time? 12) ______ A) MIS B) DSS C) TPS D) ESS 13) Which type of system would you use to change a production schedule if a key supplier was late in delivering goods? 13) ______ A) ESS B) DSS C) TPS D) MIS 14) A(n) ________ system collects data from various key business processes and stores the data in a single, comprehensive data repository, usable by other parts of the business. 14) ______ A) automatic reporting B) management information C) transaction D) enterprise 15) An example of a highly structured decision is 15) ______ A) granting credit to a customer. B) calculating the best trucking routes for product delivery. C) creating a new product. D) estimating the effect of changing costs of supply materials. 16) ________ systems integrate supplier, manufacturer, distributor, and customer logistics processes. 16) ______ A) Supply-chain management B) Collaborative distribution C) Reverse logistics D) Enterprise planning 17) Which of the following types of system helps coordinate the flow of information between the firm and its suppliers and customers? 17) ______ A) extranet B) intranet C) KMS D) TPS 18) Which types of systems consolidate the relevant knowledge and experience in the firm to make it available to improve business processes and management decision making? 18) ______ A) extranets B) TPS C) KMS D) CRM 19) Which of the following industries has a low barrier to entry? 19) ______ A) computer chip B) restaurant C) airline D) automotive 20) A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force. 20) ______ A) new market entrants B) product differentiation C) traditional competitors D) low number of suppliers 21) The four major types of competitive strategy are 21) ______ A) low-cost leadership; new market entrants; product differentiation; and focus on market niche. B) low-cost leadership; substitute products and services; customers; and suppliers. C) new market entrants; substitute products and services; customers; and suppliers. D) low-cost leadership; product differentiation; focus on market niche; and customer and supplier intimacy. 22) When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a ________ strategy. 22) ______ A) market niche B) process efficiency C) product differentiation D) mass customization 23) ________ is the ability to offer individually tailored products or services using the same production resources as bulk production. 23) ______ A) Magnitude customization B) Mass customization C) Size customization D) Dimension customization 24) Which of the following best illustrates the use of information systems to focus on market niche? 24) ______ A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing. B) A restaurant chain analyzing local sales figures to determine which menu items to serve. C) A department store creating specialized products for small groups of customers. D) A bookseller selling an e-book reader that reads only the bookseller's books. 25) The Internet raises the bargaining power of customers by 25) ______ A) making more products available. B) lowering transaction costs. C) making information available to everyone. D) creating new opportunities for building loyal customer bases. 26) What significant competitive force is challenging the publishing industry? 26) ______ A) low cost of entry B) customer's bargaining power C) positioning and rivalry among competitors D) substitute products or services 27) The value chain model 27) ______ A) sees the supply chain as the primary activity for adding value. B) categorizes five related advantages for adding value to a firm's products or services. C) helps a firm identify points at which information technology can most effectively enhance its competitive position. D) categorizes four basic strategies a firm can use to enhance its value chain. 28) The primary activities of a firm include 28) ______ A) inbound logistics, operations, outbound logistics, sales and marketing, and service. B) procurement, operations, technology, sales and marketing, and services. C) procurement, inbound logistics, operations, technology, and outbound logistics. D) inbound logistics, operations, outbound logistics, technology, and service. 29) Network economics 29) ______ A) applies the law of diminishing returns to communities of users. B) sees the cost of adding new members as inconsequential. C) balances the high cost of adding new members to a community against the lower cost of using network infrastructure. D) applies traditional economics to networked users. 30) Which of the following is not true about enterprise systems? 30) ______ A) Enterprise software is expressly built to allow companies to mimic their unique business practices. B) Enterprise systems help firms respond rapidly to customer requests for information or products. C) Enterprise software includes analytical tools to evaluate overall organizational performance. D) Enterprise system data have standardized definitions and formats that are accepted by the entire organization. 31) When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the company with 31) ______ A) configuration tables. B) middleware. C) Web services. D) data dictionaries. 32) In order to achieve maximum benefit from an enterprise software package, a business 32) ______ A) selects only the software that best matches its existing business processes. B) changes the way it works to match the software's business processes. C) uses only the processes in the software that match its own processes. D) customizes the software to match all of its business processes. 33) A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers is called a 33) ______ A) value chain. B) marketing channel. C) distribution channel. D) supply chain. 34) Why is overstocking warehouses not an effective solution for a problem of low availability? 34) ______ A) It does not speed product time to market. B) It increases sales costs. C) It is an inefficient use of raw materials. D) It increases inventory costs. 35) Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain? 35) ______ A) continuous replenishment B) demand planning C) safety stock D) just-in-time strategies 36) Which of the following is not one of the main challenges in implementing enterprise applications? 36) ______ A) complex to install and configure B) dependence on third-party vendors C) loss of ownership of data D) high cost of software 37) A build-to-order supply-chain model is also called a ________ model. 37) ______ A) supply-based B) replenishment-driven C) push-based D) demand-driven 38) SFA modules in CRM systems would provide tools for 38) ______ A) capturing prospect and customer data. B) managing sales prospect and contact information. C) identifying profitable and unprofitable customers. D) assigning and managing customer service requests. 39) The measurement of the number of customers who stop using or purchasing products or services from a company is called 39) ______ A) switching costs. B) switch rate. C) CLTV. D) churn rate. 40) Analytical CRM applications 40) ______ A) provide customer-facing applications. B) provide consolidated data for operational CRM applications. C) are based on data consolidated from operational CRM applications. D) include tools for marketing automation. 41) Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company? 41) ______ A) cost per sale B) churn rate C) cost per lead D) CLTV 42) Analyzing customer buying patterns is an example of 42) ______ A) demand planning. B) operational CRM. C) analytical CRM. D) CLTV. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 43) Operational management is responsible for directing the day-to-day operations of the business and therefore needs transaction-level information. 43) ______ 44) Transaction processing systems are most commonly used by the senior management level of an organization. 44) ______ 45) A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business. 45) ______ 46) Dell Inc. is an example of a push-based model. 46) ______ 47) Most MISs use sophisticated mathematical models or statistical techniques. 47) ______ 48) Investment in IT is over 50% of all invested capital. 48) ______ 49) Studies have consistently shown that firms that invest greater amounts in information technology receive greater benefits than firms that invest less. 49) ______ 50) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers. 50) ______ 1) C 2) C 3) D 4) D 5) A 6) B 7) C 8) C 9) A 10) B 11) B 12) A 13) C 14) D 15) A 16) A 17) A 18) C 19) B 20) A 21) D 22) A 23) B 24) C 25) C 26) D 27) C 28) A 29) B 30) A 31) A 32) B 33) D 34) D 35) C 36) C 37) D 38) B 39) D 40) C 41) D 42) C 43) TRUE 44) FALSE 45) TRUE 46) FALSE 47) FALSE 48) TRUE 49) FALSE 50) FALSE