590 Chapter 12
E-distributors: A) make money by charging a mark-up on products they distribute. B) usually operate "private" markets. C) operate in vertical markets. D) focus on selling direct products.
Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
EDI began as a(n) ________ system. A) document automation B) document exchange C) invoice generation D) MRP
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 4 Copyright © 2019 Pearson Education, Inc.
An ________ provides an online catalog that represents the products of thousands of direct manufacturers. A) e-distributor B) e-procurement company C) exchange D) industry consortium
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Office supplies are an example of: A) direct goods. B) indirect goods. C) MRO goods. D) distributed goods.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
________ is an example of an e-procurement Net marketplace. A) TheSeam B) Ariba C) Grainger D) SupplyOn
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Few large firms today have Electronic Data Interchange (EDI) systems.
Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 6 Copyright © 2019 Pearson Education, Inc.
A(n) ________ market is one that provides expertise and products for a specific industry (i.e., automobiles). A) vertical B) horizontal C) indirect D) buyer-biased
Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
An ________ is an independently owned, online marketplace that connects hundreds to potentially thousands of suppliers and buyers in a dynamic, real-time environment. A) exchange B) e-distributor C) e-procurement company D) industry consortium
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
Private industrial networks are usually owned collectively by the major firms participating in the network, while exchanges usually are created by a single sponsoring company.
Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
How are social networks being used in B2B e-commerce?
Answer: In B2B e-commerce, social networks are beginning to be common tools for procurement offers, managers of supply chains, logistics managers and others engaged in B2B e- commerce. Social networks can provide personal connections among customers, suppliers, and logistics partners that are needed to keep the supply chain functioning, and to make decisions based on current conditions. Participants in the supply chain use social networks for purchasing, scheduling, exception handling, and deciding with their B2B customers and suppliers. In many cases, supply chain social networks are private and owned by the largest firm in the supply chain network. In other cases, firms develop Facebook pages to organize conversations among supply chain network members. Public social network sites like Facebook and Twitter can be excellent for coordinating the flow of information among business partners through the supply chain. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
________ is another name for transorganizational business processes. A) Supply chain management B) Collaborative commerce C) B2B e-commerce D) Value chain management
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
D) those over 65
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
An ________ primarily serves businesses that primarily buy indirect goods on a contract purchasing basis. A) e-distributor B) e-procurement Net marketplace C) exchange D) industry consortium
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
TheSeam is an example of an: A) exchange. B) industry consortium. C) e-procurement Net marketplace. D) e-distributor.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Collaborative commerce systems: A) focus on structuring intra-firm communications. B) bring customers into the product development phase. C) provide open, competitive marketplaces. D) foster sharing sensitive internal information with suppliers and purchasers.
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
A private industrial network is an independently owned online marketplace that connects many suppliers and buyers.
Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
A(n) ________ system continuously links the activities of buying, making, and moving products from suppliers to purchasing firms, as well as integrating order entry systems. A) EDI B) ERP C) CPFR D) SCM
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
The essential characteristic of ________ is that they bring hundreds to thousands of suppliers into a single Internet-based environment to conduct trade. A) industry consortia B) exchanges C) Net marketplaces D) horizontal markets
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
Supply chain ________ refers to differentiating a firm's products or prices on the basis of superior supply chain management. A) management B) simplification C) competition D) collaboration
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 5 Copyright © 2019 Pearson Education, Inc.
The last step in the procurement process is: A) sending a remittance payment. B) sending the invoice. C) shipping the goods. D) delivering the goods.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
________ purchasing involves the purchase of goods based on immediate needs in larger marketplaces that involve many suppliers. A) Spot B) Indirect C) Vertical D) Bulk
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
________ production is a set of production methods that focuses on the elimination of waste throughout the customer value chain. A) Green B) Sustainable C) Lean D) Just-in-time
Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 15 Copyright © 2019 Pearson Education, Inc.
An ________ primarily serves businesses that primarily buy direct goods on a spot purchasing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce. 10 Copyright © 2019 Pearson Education, Inc.
The majority of inter-firm trade involves: A) spot purchasing of direct goods. B) contract purchasing of indirect goods. C) contract purchasing of direct goods. D) spot purchasing of indirect goods.
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce. 9 Copyright © 2019 Pearson Education, Inc.
8) Which of the following is another name for a private industrial network? A) industry consortia B) EDI system C) PTX D) net marketplace
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
Which of the following primarily deal with direct goods? A) e-distributors and independent exchanges B) exchanges and e-procurement Net marketplaces C) exchanges and industry consortia D) e-procurement Net marketplaces and industry consortia
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
All of the following have led to the development of outsourcing of manufacturing around the world except: A) technology. B) globalization of trade. C) environmental concerns. D) high levels of wage disparity between the developed and undeveloped worlds.
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
EDI document structures are defined by: A) a single international standards body. B) individual suppliers and buyers. C) industry committees. D) each purchaser.
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
Which of the following is a method of inventory cost management that seeks to eliminate excess inventory? A) lean production B) sustainable production C) just-in-time production D) supply chain simplification
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
2) In 2017, the total amount of B2B e-commerce in the United States was approximately: A) $6.3 billion. B) $63 billion. C) $630 billion. D) $6.3 trillion.
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
EDI was developed to reduce the cost, delays, and errors inherent in the manual exchanges of documents among firms.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Exchanges are not directly tied to ERP systems used by large firms.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
An ________ serves businesses that primarily buy direct goods on a contract purchasing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces. 20 Copyright © 2019 Pearson Education, Inc.
1) Analysts predict that B2B e-commerce in the United States will grow to approximately ________ by 2021. A) $7.6 billion B) $76 billion C) $760 billion D) $7.6 trillion
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
The liquidity of a market is measured by all of the following except: A) price transparency. B) number of buyers and sellers in market. C) volume of transactions. D) size of transactions.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
4) Which of the following terms refers to the links that connect business firms with one another to coordinate production? A) supply chain B) B2B e-commerce C) vertical market D) horizontal market
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
All of the following are potential benefits of B2B e-commerce except: A) lower administrative costs. B) lower search costs. C) lower price transparency. D) lower transaction costs.
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
5) Automated order entry systems: A) show goods from a single seller. B) increased the costs of inventory replenishment. C) are typically owned by the purchasing firm. D) no longer play an important role in B2B commerce.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
All of the following are forms of collaboration among businesses except: A) RFQs. B) CPFR. C) demand chain visibility. D) marketing coordination and product design.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
What is the difference between accountable and sustainable supply chains?
Answer: Accountable supply chains provide information to consumers about the labor conditions of employees of the firm's suppliers and ensure that these conditions are satisfactory to their consumers. Sustainable supply chains take a somewhat wider focus, as they take both social and ecological interests into account throughout the firm's decision making, including issues such as carbon foot prints, impact on the environment and community. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
All of the following are potential benefits of B2B e-commerce except: A) increased production flexibility. B) increased product cycle time. C) increased opportunities to collaborate with suppliers and distributors. D) increased visibility and real-time information sharing among all participants in the supply chain network.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
3) Which of the following was the first step in the development of B2B e-commerce? A) Electronic Data Interchange (EDI) B) automated order entry systems C) computerized inventory databases D) digital invoices
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 2 Copyright © 2019 Pearson Education, Inc.
7) B2B e-commerce websites: A) are a predecessor of industry consortia. B) tend to serve horizontal markets. C) are buyer-side solutions. D) are considered a type of EDI system.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 3 Copyright © 2019 Pearson Education, Inc.
All of the following are important trends in B2B e-commerce in 2017-2018, except: A) the growing emphasis on obtaining real-time data. B) the migration of B2B hardware and software to cloud computing and cloud apps. C) a decline in the number of Net marketplaces. D) the increasing use of social network platforms.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
All of the following are weaknesses of EDI except: A) EDI is not well suited for electronic marketplaces. B) EDI lacks universal standards. C) EDI does not provide a real-time communication environment. D) EDI does not scale easily.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
The term BYOD refers to employees: A) working from home. B) being allowed or encouraged to their own mobile devices and laptops. C) using mobile devices for work. D) bringing work devices to the home.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
Which of the following statements about B2B marketing is not true? A) Mobile B2B marketing consumes less than 20% of B2B digital marketing budgets. B) Only 10% of B2B marketers use mobile marketing technologies. C) Content marketing is one of the primary and most effective marketing tools in B2B marketing. D) The disparity between the amount spent on B2B marketing compared to B2C e-commerce reflects the different nature of much of B2B e-commerce when compared to B2C e-commerce.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
________ is a method for ensuring that suppliers precisely deliver ordered parts at a specific time and to a particular location. A) Having an adaptive supply chain B) Tight coupling C) Supply-chain management D) Materials requirement planning
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 13 Copyright © 2019 Pearson Education, Inc.
Which of the following primarily serve horizontal markets? A) e-distributors and exchanges B) e-distributors and e-procurement Net marketplaces C) e-procurement Net marketplaces and industry consortia D) exchanges and industry consortia
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Which of the following primarily deal with indirect goods? A) e-distributors and industry consortia B) e-distributors and e-procurement Net marketplaces C) exchanges and industry consortia D) exchanges and e-procurement Net marketplaces
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces. 18 Copyright © 2019 Pearson Education, Inc.
Private industrial networks are direct descendants of: A) e-procurement Net marketplaces. B) existing EDI networks. C) independent exchanges. D) industry consortia.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
What is the first step in the procurement process? A) negotiate price B) qualify the seller and its products C) issue a purchase order D) search for suppliers
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
________ is defined as the use of digital technologies to permit organizations to work together to design, develop, build, and manage products through their life cycles. A) SCM B) Social e-commerce C) EDI D) Collaborative commerce
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
Which of the following primarily involve long-term sourcing? A) e-distributors and exchanges B) e-distributors and industry consortia C) e-procurement Net marketplaces and exchanges D) e-procurement Net marketplaces and industry consortia
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Which of the following statements about Walmart's Global Replenishment System (GRS) is not true? A) GRS is an online analytics package. B) GRS is a just-in-time inventory management system. C) GRS is predictive, not just reflective, of past sales. D) GRS is based on past point-of-sale data.
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation. 22 Copyright © 2019 Pearson Education, Inc.
What services do e-procurement Net marketplaces provide?
Answer: E-procurement Net marketplace services include providing a marketplace for long term contractual purchasing as well as some spot-sourcing of indirect goods (MRO). They provide value chain management services to both buyers and sellers. VCM services include automation of a firm's entire procurement process on the buyer side (e.g., purchase orders, sourcing, requisitions), and automation of the selling business processes on the seller side (e.g., catalog creation, order management, invoicing). Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Operating on a global scale is one goal of collaborative commerce.
Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
Collaborative commerce can be accomplished using EDI.
Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
Highly centralized supply chains produce higher short-term costs, but also lower long-term risk protection.
Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
Industry consortia are used for spot purchasing of MRO supplies.
Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces. 21 Copyright © 2019 Pearson Education, Inc.
6) Which of the following statements about EDI systems is true? A) They typically serve vertical markets. B) They are seller-side solutions. C) They evolved from private trading exchanges. D) They still play an important role in B2C commerce.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
NeweggBusiness is an example of a(n): A) e-distributor. B) exchange. C) private industrial network. D) e-procurement Net marketplace.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Which of the following is an example of an e-distributor? A) Amazon Business B) PowerSource Online C) SupplyOn D) Elemica
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
An ________ primarily serves businesses that buy indirect goods on a spot purchasing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces. 19 Copyright © 2019 Pearson Education, Inc.
Which of the following statements about cloud-based B2B systems is not true? A) Much of the expense of the system is shifted from the B2B network provider to the firm. B) B2B network providers charge customers on a demand basis. C) Network effects apply, enabling the spreading of costs. D) Cloud-based B2B data networks can be implemented in short periods of time.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
All of the following are major trends in B2B e-commerce in 2017-2018, except: A) a movement toward implementing highly centralized supply chains to reduce risk. B) a growing emphasis on the use of business analytics software (business intelligence) to understand very large data sets. C) a growing emphasis on rapid-response and adaptive supply chains rather than lowest-cost supply chains. D) an increase in regional manufacturing and supply chains to attempt to combat the risks of far- flung global networks.
Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 12 Copyright © 2019 Pearson Education, Inc.
An example of an indirect good in the fast-food industry is: A) mustard. B) paper napkins. C) beef. D) sugar.
Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
Which of the following is not a typical barrier to the implementation of a private industrial network? A) It requires participating firms to share sensitive data. B) It requires the large network owners to give up some of its independence. C) It requires a significant investment of time and money. D) It requires a change of mindset and behavior of employees.
Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation. 23 Copyright © 2019 Pearson Education, Inc.
Identify and describe the major stages in the development of B2B commerce.
Answer: B2B commerce has evolved over a 35-year period through several technology-driven stages. The major stages in this evolution were the development of automated order entry systems, electronic data interchange (EDI), digital storefronts, private industrial networks, and Net marketplaces. Automated order entry systems began in the mid-1970s with the use of telephone modems to send digital orders to health care products companies. Modems were eventually replaced by personal computers using private networks in the late 1980s, and by Internet workstations accessing electronic online catalogs in the late 1990s. By the late 1970s, a new form of computer-to-computer communication called electronic data interchange (EDI) emerged. EDI is a communications standard for sharing business documents such as invoices, purchase orders, shipping bills, product stocking numbers (SKUs), and settlement information among a small number of firms. Virtually all large firms have EDI systems, and most industry groups have industry standards for defining documents in that industry. B2B e-commerce websites emerged in the mid-1990s along with the commercialization of the Internet. These storefronts are online catalogs of products made available to the public marketplace by a single supplier. Net marketplaces emerged in the late 1990s as a natural extension and scaling up of the electronic storefronts. These marketplaces bring hundreds to thousands of suppliers — each with electronic catalogs and potentially thousands of purchasing firms — into a single Internet-based environment to conduct trade. Private industrial networks also emerged in the late 1990s as natural extensions of EDI systems and the existing close relationships that developed between large industrial firms and their suppliers. Private industrial networks (also referred to as private trading exchanges, or PTXs) are Internet-based communication environments that extend far beyond procurement to encompass truly collaborative commerce. Private industrial networks permit buyer firms and their principal suppliers to share product design and development, marketing, inventory, production scheduling, and unstructured communications. These networks are the most prevalent form of Internet-based B2B commerce, and this will continue into the foreseeable future. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 8 Copyright © 2019 Pearson Education, Inc.
Why is B2B e-commerce seen as a potential revenue source for B2B firms?
Answer: B2B e-commerce shows promise because purchasing supplies for a firm is a costly process. For example, firms estimate that each corporate purchase order costs at least $100 in overhead. Using B2B e-commerce to automate B2B purchasing could save, overall, trillions of dollars. In turn, this could enable lower prices, increased productivity, and even greater wealth for a nation. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication; Analytical thinking Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
Define and discuss the terms B2B commerce, B2B e-commerce, and supply chains in the context of the history and significance of B2B e-commerce.
Answer: Before the Internet, business-to-business transactions were referred to simply as trade or the procurement process. The term B2B commerce refers to all types of inter-firm trade to exchange value across organizational boundaries. B2B commerce includes the following business processes: customer relationship management, demand management, order fulfillment, manufacturing management, procurement, product development, returns, logistics/transportation, and inventory management. The term B2B e-commerce (or B2B digital commerce) refers to that portion of B2B commerce that is enabled by the Internet (including mobile apps) to assist firms in buying and selling a variety of goods to each other. The links that connect business firms in the production of goods and services are referred to as the supply chain. Supply chains are a complex system of organizations, people, business processes, technology, and information, all of which need to work together to produce products efficiently. The process of conducting trade among businesses consumes many business resources. Across the economy this amounts to trillions of dollars spent annually on procurement processes. If a significant portion of this inter-firm trade could be automated and parts of the procurement process assisted by the Internet, millions or even trillions of dollars could be freed up for other uses resulting in increased productivity and increased national economic wealth. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 7 Copyright © 2019 Pearson Education, Inc.
9) Which of the following is the fastest growing form of B2B e-commerce? A) e-distributors B) exchanges C) private industrial networks D) industry consortiums
Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
Describe at least five characteristics of Net marketplaces.
Answer: Characteristics of Net marketplaces include (1) bias—whether the marketplace advantages sellers, buyers, or each group equally (neutral); (2) ownership—who owns the marketplace, a specific firm, group of firms, or an industry group; (3) pricing mechanism—how are prices determined for products sold: fixed prices, bidding, RFPs; (4) Scope/focus—does the marketplace serve horizontal or vertical markets; (5) value creation—what benefits are offered to customers or suppliers; and (6) access to market—is the marketplace open to everyone or limited to invitees only. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Which of the following is not a characteristic of the use of social networks in B2B e- commerce? A) It is typically unstructured. B) It helps develop a more personal relationship between participants in the supply chain. C) It enables participants to make decisions based on current conditions. D) They are always private.
Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 14 Copyright © 2019 Pearson Education, Inc.
A(n) ________ supply chain is one in which the labor conditions in low-wage, underdeveloped producer countries are visible and morally acceptable to ultimate consumers in more developed industrial societies. A) sustainable B) ethical C) lean D) accountable
Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.
All of the following are examples of direct goods in the auto industry except: A) sheet steel. B) shatter-resistant glass. C) rubber molding. D) desktop computers.
Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
Define and explain supply chain management systems, supply chain simplification, and collaborative commerce, and the relationship between these concepts.
Answer: Supply chain management systems coordinate and link the activities of suppliers, shippers, and order entry systems to automate the order entry process from start to finish including the purchase, production, and moving of a product from a supplier to a purchasing firm. Supply chain simplification refers to the reduction of the size of a firm's supply chain. Firms today generally prefer to work closely with a strategic group of suppliers to reduce both product costs and administrative costs. Instead of open bidding for orders, large manufacturers have chosen to work with strategic partner supply firms under long-term contracts that guarantee the supplier business and establish quality, cost, and timing goals. These strategic partnership programs are essential for just-in-time production models. They often involve joint product development and design, integration of computer systems, and tight coupling of the production processes of two or more companies. Collaborative commerce is a direct extension of supply chain management systems and supply chain simplification. The goal is for organizations to collaboratively design, develop, build, and manage products throughout their life cycles. The focus has changed from the simplification of transactions to the relationships between the supply chain participants. Collaborative commerce fosters the sharing of sensitive internal information between suppliers and purchasers. A rich communications environment is cultivated so that inter-firm sharing of designs, production plans, inventory levels, and delivery schedules can take place. Strategic partners in a supply chain are connected for much broader purposes, including potentially the development of shared products. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 17 Copyright © 2019 Pearson Education, Inc.
MRO goods are also known as indirect goods.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
Purchasing managers are key players in the procurement process.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce. 11 Copyright © 2019 Pearson Education, Inc.
B2B e-commerce websites tend to serve horizontal markets.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.
Just-in-time production seeks to reduce excess inventory to a bare minimum.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 16 Copyright © 2019 Pearson Education, Inc.
E-distributors operate in horizontal markets.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of Net marketplaces.
Walmart is the largest purchaser of consumer goods in the world.
Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private industrial networks, their role in supporting collaborative commerce, and the barriers to their implementation.
Define the procurement process. What are the seven basic steps in the procurement process?
Answer: The procurement process refers to the way business firms purchase the goods they need to produce the goods they will ultimately sell to consumers. Firms purchase goods from a set of suppliers that in turn purchase their inputs from another set of suppliers. These firms are linked in a series of connected transactions. The supply chain refers to this series of transactions, which links sets of firms that do business with each other. It includes not only the firms themselves but also the relationships between them and the processes that connect them. There are seven steps in the procurement process: searching for suppliers for specific products; qualifying the sellers and the products they sell; negotiating prices; credit terms, escrow requirements, quality, and scheduling delivery; issuing purchase orders; sending invoices; goods are shipped; and the buyer sends a payment. Each step is composed of separate substeps that must be recorded in the information systems of the buyer, seller, and shipper. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
What does the term supply chain visibility refer to and what benefits does it bring?
Answer: The term supply chain visibility refers to the ability of a firm to monitor the output of its first and second tier suppliers, track and manage supplier orders, and manage transportation and logistics suppliers who are moving the products. When a supply chain is visible, you know when suppliers' products will arrive, and you have accurate tracking of your goods. The benefit of a visible supply chain is that the firm can produce accurate production schedules and develop more accurate financial forecasts. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e- commerce.
