IS Chapter 9

From your reading of the Land O' Lakes case study, the company implemented which type of system to improve supply chain efficiency? A) Enterprise resource planning system B) Supply-chain planning system C) Supply-chain execution system D) Push-based supply system

B. Supply-chain planning system

Concurrent supply chains are made possible by which technology? A) ERP systems B) The Internet C) Supply-chain management systems D) Just-in-time supply-chain technologies

B. The Internet

A ________ is a method of interaction with a customer, such as telephone or customer service desk. A) point of presence B) touch point C) sales point D) client channel

B. Touch point

Which of the following features is the main reason an enterprise system helps a business improve decision-making? A) Standardized business processes B) Up-to-the-minute data sharing C) Reducing redundant business processes D) Analytical tools

B. Up-to-the-minute data sharing

Which supply chain planning function determines how much product is needed to satisfy all customer demands? A) Distribution management B) Replenishment planning C) Demand planning D) Order planning

C. Demand planning

________ modules deal with issues such as setting objectives, employee performance management, and performance-based compensation. A) SCM B) SFA C) ERM D) PRM

C. ERM

Enterprise application vendors are now including ________ features, such as tools for data visualization, flexible reporting, and ad hoc analysis, as part of the application. A) ESS B) SAP C) on-demand D) business intelligence

D. Business intelligence

A company's organizations and processes for distributing and delivering products to the final customers is the: A) supplier's internal supply chain. B) external supply chain. C) upstream portion of the supply chain. D) downstream portion of the supply chain.

D. Downstream portion of the supply chain.

Which of the following statements about enterprise applications is not true? A) Enterprise applications require organizational learning. B) Enterprise applications introduce "switching costs." C) Enterprise applications are based on organization-wide definitions of data. D) Enterprise applications are best implemented when few changes in business processes are required.

D. Enterprise applications are best implemented when few changes in business processes are required.

Supply chain ________ systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. A) demand B) delivery C) planning D) execution

D. Execution

From your reading of the chapter's opening case, Nvidia implemented new information systems in order to achieve which of the main six business objectives? A) Customer and supplier intimacy B) Operational excellence C) Survival D) Improved decision making

D. Improved decision making

The business value of an effective supply-chain management system includes all of the following except: A) faster time to market. B) cost reduction. C) supply matched to demand. D) increased inventory levels.

D. Increased inventory levels.

Components or parts of finished products are referred to as: A) upstream materials. B) raw materials. C) secondary products. D) intermediate products.

D. Intermediate products.

Why is overstocking warehouses not an effective solution for a problem of low availability? A) It does not speed product time to market. B) It is an inefficient use of raw materials. C) It increases sales costs. D) It increases inventory costs.

D. It increases inventory costs.

SFA modules in CRM systems would provide tools for: A) assigning and managing customer service requests. B) capturing prospect and customer data. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information.

D. Managing sales prospect and contact information.

) ________ modules use many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners. A) SCM B) SFA C) ERM D) PRM

D. PRM

Supply chain software can be classified as either supply chain ________ systems or supply chain ________ systems. A) push; pull B) demand; continual C) upstream; downstream D) planning; execution

D. Planning; execution

The bullwhip effect is countered by: A) globalization. B) disintermediation. C) implementing an SCM. D) reducing information uncertainty

D. Reducing information uncertainty

Uncertainties arise in any supply chain because of: A) inaccurate or untimely information. B) poor integration between systems of suppliers, manufacturers, and distributors. C) inefficient or inaccurate MIS. D) unforeseeable events.

D. Unforeseeable events.

Identify and describe the two types of customer relationship management applications.

Operational CRM and analytical CRM are two types of CRM. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer-relationship management applications dealing with the analysis of customer data to provide information for improving business performance.

Identify two supply-chain models. Which is better?

Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. Pull-based refers to a supply chain driven by actual customer orders or purchases so that members of the supply chain produce and deliver only what customers have ordered. Pull-based models are better.

Identify two classifications for supply-chain software. For each classification, identify four capabilities.

Supply-chain planning systems and supply-chain execution systems are two classifications for supply-chain software. Supply-chain planning systems enable a firm to generate demand forecasts for a product and develop sourcing and manufacturing plans for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, distribution planning, and transportation planning. Supply-chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations. Capabilities include order commitments, final production, replenishment, distribution management, and reverse distribution.

Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain? A) Safety stock B) Continuous replenishment C) Just-in-time strategies D) Demand planning

A. Safety stock

You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take? A) Select the functions of the system you wish to use. B) Select the business processes you wish to automate. C) Map the company's business processes to the software's business processes. D) Map the software's business processes to the company's business processes.

A. Select the functions of the system you wish to use.

Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes ________ applications. A) operational CRM B) analytical CRM C) operational SCM D) analytical SFA

B. Analytical CRM

Analyzing customer buying patterns is an example of: A) CLTV. B) analytical CRM. C) operational CRM. D) demand planning.

B. Analytical CRM.

A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain is called the ________ effect. A) network B) bullwhip C) ripple D) whirlpool

B. Bullwhip

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? A) Churn rate B) CLTV C) Cost per lead D) Cost per sale

B. CLTV

The measurement of the number of customers who stop using or purchasing products or services from a company is called: A) switching costs. B) churn rate. C) CLTV. D) switch rate.

B. Churn rate.

Which of the following business objectives would be most helped by implementing an enterprise application? A) New products and services B) Customer and supplier intimacy C) Competitive advantage D) Survival

B. Customer and supplier intimacy

A build-to-order supply-chain model is also called a ________ model. A) supply-based B) demand-driven C) replenishment-driven D) push-based

B. Demand-driven

A suite of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes best describes: A) process management software. B) ERP systems. C) groupware. D) application software.

B. ERP systems.

Supply chain planning systems: A) track the physical status of goods. B) identify the transportation mode to use for product delivery. C) track the financial information involving all parties. D) track the status of orders.

B. Identify the transportation mode to use for product delivery.

Which of the following is an important capability for sales processes that is found in most major CRM software products? A) Returns management B) Lead management C) Channel promotions management D) Events management

B. Lead management

________ modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services. A) PRM B) SFA C) ERM D) CLTV

B. SFA

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: A) distribution channel. B) supply chain. C) value chain. D) marketing channel.

B. Supply chain.

To model its existing supply chain and develop optimal manufacturing plans, a firm would implement a supply chain execution system.

False

You have been hired by Croydon Visiting Nurse Services, whose business processes are all manual, paper-based processes. How might a CRM system benefit them?

A CRM system that includes patient's health records would allow any nurse to take over if another needed replacement. Assuming that the nurses had access via laptops or other PDAs to the system, a new nurse would have instant access to the patients needs. The CRM might also be able to record which types of treatments or products customers were most interested in or gave the greatest benefit to customers, and help anticipate needs. Additionally, with PRM capabilities, products needed by the nursing service would be more easily anticipated, ordered, and delivered. Since the employees work in the field, or away from a central office, Internet-based communications might provide tools for reviewing employee performance.

Customer service modules in CRM systems provide tools for: A) assigning and managing customer service requests. B) capturing prospect and customer data. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information.

A. Assigning and managing customer service requests.

When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the company with: A) configuration tables. B) Web services. C) data dictionaries. D) middleware.

A. Configuration tables.

CRM systems help businesses obtain which business objective? A) Customer and supplier intimacy B) Operational excellence C) New products and services D) Improved decision making

A. Customer and supplier intimacy

Capabilities of supply chain execution systems would not include: A) identifying the optimal transportation mode. B) tracking the flow of finished goods. C) managing materials. D) managing warehouse operations.

A. Identifying the optimal transportation mode.

A scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line best describes a ________ strategy. A) just-in-time B) frictionless C) bullwhip D) safety-stock

A. Just-in-time

Customer relationship management systems typically provide software and online tools for sales, customer service, and: A) marketing. B) account management. C) advertising. D) public relations.

A. Marketing.

Which of the following is not one of the four types of customers described in the case study on Graybar? A) Niche customers B) Opportunistic customers C) Marginal customers D) Service-drain customers

A. Niche customers

________ CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation. A) Operational B) Social C) Web-based D) Sales force

A. Operational

A supply chain driven by actual customer orders or purchases follows a ________ model. A) pull-based model B) build-to-stock C) push-based D) replenishment-driven

A. Pull-based model

________ management is an important capability for customer service processes that is found in most major CRM software products. A) Returns B) Lead C) Account D) Events

A. Returns

Enterprise application vendors have created ________ to make their own customer relationship management, supply chain management, and enterprise systems work closely together with each other. A) e-business suites B) ERP systems C) middleware D) legacy systems

A. e-business suites

You have been hired by Santori, Inc., a small company that imports and distributes an Italian sparkling water. The company is interested in what benefits an enterprise system would bring. Would an enterprise application be appropriate for this company? What steps would you take in determining this?

An enterprise system may be too expensive, although there are enterprise software packages that are available to smaller companies. A cloud-based enterprise application might be the most economical way to implement an enterprise system. To determine whether this would be beneficial to Santori, I would first look at their existing business processes. It would be ideal to determine if their efficiency meets benchmarks in their industry and allows them to be competitive with other businesses in their niche. Then I would review cloud-based or open-source enterprise systems to see how each application's business processes matched up with Santori's. It would be important to compare the costs of instituting new business processes with the benefits and cost savings. Because their business is based on imports and distribution, and working with suppliers in different countries, it might be best to start off with a supply chain management system.

Identify five benefits of customer-relationship management systems.

Benefits include: better customer service, make call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional products and services, provide customer information for developing new products, increase product utilization, reduce sales and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, respond quickly to market opportunities.

Identify at least four benefits and four challenges of enterprise systems.

Benefits include: increasing operational efficiency; providing firmwide information to help decision making; standardized business processes; greater responsiveness to customer needs; greater accuracy in fulfilling product demand; reduction of inventory and inventory costs; reduction in order-to-delivery time; improving business processes; removing redundant processes and systems; lowering costs through centralized processing; and improved decision making. Challenges include: the expense of the software and related costs; the time required for implementation; deep-seated technological changes required, the deep-seated organizational changes required; overcoming organizational resistance; switching costs; data cleansing work required.

Enterprise software is built around thousands of predefined business processes that reflect: A) the firm's organization. B) industry goals. C) best practices. D) cutting edge workflow analyses.

C. Best practices.

In order to achieve maximum benefit from an enterprise software package, a business: A) customizes the software to match all of its business processes. B) uses only the processes in the software that match its own processes. C) changes the way it works to match the software's business processes. D) selects only the software that best matches its existing business processes.

C. Changes the way it works to match the software's business processes.

Selling a customer with a checking account a home improvement loan is an example of: A) operational CRM. B) direct marketing. C) cross-selling. D) cross-channel promotions.

C. Cross-selling.

Which of the following is not true about enterprise systems? A) Enterprise systems help firms respond rapidly to customer requests for information or products. B) Enterprise system data have standardized definitions and formats that are accepted by the entire organization. C) Enterprise software is expressly built to allow companies to mimic their unique business practices. D) Enterprise software includes analytical tools to evaluate overall organizational performance.

C. Enterprise software is expressly built to allow companies to mimic their unique business practices.

Marketing modules in CRM systems would provide tools for: A) assigning and managing customer service requests. B) capturing prospect and customer data. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information

C. Identifying profitable and unprofitable customers.

) Which of the following would not be considered a contact point? A) E-mail B) Web site C) Intranet D) Retail store

C. Intranet

Systems that enable a firm to generate demand forecasts for a product, and to develop sourcing and manufacturing plans for that product, best describes supply chain ________ systems. A) demand B) delivery C) planning D) execution

C. Planning

Supply chain complexity and scale increases when firms: A) move to globalization. B) manage the procurement, manufacturing, and distribution functions themselves. C) produce products and services that coordinate with hundreds or more firms and suppliers. D) modify their existing workflows to comply with supply-chain management systems.

C. Produce products and services that coordinate with hundreds or more firms and suppliers.

Operational CRM applications include tools for: A) identifying buying patterns. B) calculating CLTV. C) salesforce automation. D) pinpointing unprofitable customers.

C. Salesforce automation.

Which of the following is not an example of next-generation enterprise applications? A) Open-source solutions B) Social CRM C) Stand-alone suites D) Solutions incorporating SOA

C. Stand-alone suites

A company's suppliers, supplier's suppliers, and the processes for managing relationships with them is the: A) supplier's internal supply chain. B) external supply chain. C) upstream portion of the supply chain. D) downstream portion of the supply chain.

C. Upstream portion of the supply chain.

With new flows of information made possible by Web-based tools, supply chain management can more easily follow a push-based model.

False

Identify and describe three major enterprise applications.

Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes. Enterprise systems provide many benefits including an enterprise-enabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes. Supply-chain management systems help an organization better manage its supply chain, including planning, sourcing, making, delivering, and returning items. Supply-chain management software can be categorized as a supply-chain planning system or as a supply-chain execution system. A supply-chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply-chain execution system manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. Supply-chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization. Customer-relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise. Customer-relationship management systems can be classified as operational or as analytical. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer-relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Benefits include increased customer satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and retention.

A company having difficulty with timely delivery of parts to its manufacturing plants should look to implementing a supply chain planning system.

False

All CRM packages contain modules for PRM and ERM.

False

An enterprise system helps reduce redundant business processes.

False

In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for products.

False

Safety stock acts as an inexpensive buffer for the lack of flexibility in the supply chain.

False

Supply chain execution systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product.

False

Supply chain management systems are a type of enterprise system.

False

The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.

False

What additional complexities are faced in global supply chains? How does the Internet help in managing global supply chains?

Global supply chains typically span greater geographic distances and time differences than domestic supply chains and have participants from a number of different countries. Although the purchase price of many goods might be lower abroad, there are often additional costs for transportation, inventory, and local taxes or fees. Performance standards may vary from region to region or from nation to nation. Supply-chain management may need to reflect foreign government regulations and cultural differences. All of these factors impact how a company takes orders, plans distribution, organizes warehousing, and manages inbound and outbound logistics throughout the global markets it services. The Internet helps companies manage many aspects of their global supply chains, including sourcing, transportation, communications, and international finance. As goods are being sourced, produced, and shipped, communication is required among retailers, manufacturers, contractors, agents, and logistics providers. With Internet technology, supply chain members communicate through a Web-based system. Firms use intranets to improve coordination among their internal supply chain processes, and they use extranets to coordinate supply chain processes shared with their business partners.

A company's supply chain describes how raw materials are transformed into finished products and shipped to retailers and customers.

True

Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm's customer touch points and from other sources.

True

CRM software can help organizations identify high-value customers for preferential treatments.

True

Cross-selling markets complementary products to customers.

True

Dell Inc., which produces many personalized computers as they are ordered, is an example of a pull-based supply-chain model.

True

Enterprise systems include analytical tools.

True

Enterprise systems require fundamental changes in the way the business operates.

True

In the pre-Internet environment, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes.

True

Inefficiencies in a supply chain are primarily caused by inaccurate information.

True

It can cost six times more to sell a product to a new customer than to an existing customer.

True

Major CRM application software vendors include Oracle and SAP.

True

Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs.

True

The bullwhip effect is the distortion of information about the demand for a product as it passes from one entity to the next across the supply chain.

True

The downstream portion of the supply chain includes retailers and customers.

True

Total supply chain costs in some industries approach 75 percent of the total operating budget.

True

Plant Away is an Oregon-based retailer and distributor of trees and shrubs. They have hundreds of smaller nurseries based around the country that grow the plant stock. The majority of their business is conducted online: Consumers purchase typically small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate they have in their supply chain? What might remedy these problems?

Typical problems in supply chains arise from unforeseeable events. In a plant nursery, variations in the weather, growing season, plant diseases, and crop output would be uncertainties. Other problems might be interstate regulations governing plants allowed in different states, and making sure plants survive and are healthy during transportation. It would be very important to have up-to-date forecasting of the weather or growing seasons that could anticipate possible problems, and analyze and determine the best transportation routes.