IST 202 Exam 3
44) Which of the following statements is true with regards to packaged and custom software? A) Packaged software are applications that are designed and developed exclusively for a specific organization. B) The development costs of custom software are much higher than for packaged software because of the time, money, and resources that are required to design and develop them. C) Packaged software is well suited for tasks that are unique to a particular business. D) Custom software is cost effective since the vendor that builds the application can spread out development costs through selling to a large number of users. E) Custom software is highly useful for standardized, repetitive tasks, such as writing a report or preparing a presentation.
B) The development costs of custom software are much higher than for packaged software because of the time, money, and resources that are required to design and develop them.
47) In the 1990s, business process management was known as ________. A) business systems management B) business process reengineering C) business service reengineering D) application performance management E) application service management
B) business process reengineering
32) Systems that focus on the specific needs of individual departments and are not designed to communicate with other systems in the organization are referred to as ________. A) internally focused applications B) externally focused systems C) stand-alone applications D) enterprise-wide systems E) enterprise-information systems
C) stand-alone applications
29) Designing and developing applications that support the primary business activities are a part of the ________ activities. A) operations and manufacturing B) outbound logistics C) technology development D) procurement E) inbound logistics
C) technology development
28) Which of the following is a support activity? A) outbound logistics activities B) operations and manufacturing activities C) technology development activities D) customer service activities E) marketing and sales activities
C) technology development activities
49) According to business process management, which of the following would be the next step taken by management after identifying the ways in which the information systems can be used? A) identifying the critical processes that are to be redesigned B) understanding and measuring the existing processes as a baseline for future improvements C) reducing costs and shortening the time it takes to get products to market D) designing and implementing a prototype of the new process E) developing a vision for the organization that specifies the business objectives
D) designing and implementing a prototype of the new process
14) In the context of core business processes, which of the following uses a push-based approach? A) order-to-cash B) procure-to-pay C) production-to-order D) make-to-stock E) make-to-order
D) make-to-stock
25) Administrative activities focus on the ________. A) design and development of applications that support the primary business activities B) hardware and software that must be implemented to support the applications that the primary activities use C) business activities associated with employee management D) processes and decision making to orchestrate the day-to-day operations of an organization E) purchasing of goods and services that are required as inputs for the primary activities
D) processes and decision making to orchestrate the day-to-day operations of an organization
Distribution planning leads to the development of the overall ________. A) production plan B) safety stock plan C) demand forecast D) transportation schedule E) sourcing plan
D) transportation schedule
46) ________ is a systematic, structured approach to improvement, in which people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures, such as quality, cycle time, or cost. A) Business process management B) Business activity monitoring C) Business service management D) Application performance management E) Application service management
A) Business process management
42) Which of the following software is cost effective since the vendor that builds the application spreads out the development costs by selling copies to a large number of users? A) packaged software B) bespoke software C) adapted software D) corrected software E) custom software
A) packaged software
Supply chain planning begins with ________. A) product demand planning and forecasting B) distribution planning C) production scheduling D) inventory planning E) safety stock planning
A) product demand planning and forecasting
1) Traditionally, companies are organized around five distinct functional areas. Which of the following is one of those areas? A) supply chain management B) risk management C) technology management D) communication management E) systems management
A) supply chain management
2) Which of the following is a core business process? A) time-to-purchase B) make-to-stock C) plan-to-produce D) account-to-report E) hire-to-retire
B) make-to-stock
55) ________ support the primary external activities of the organization for dealing with suppliers and customers. A) ERP essence components B) ERP aggrandized components C) ERP abridged components D) ERP extended components E) ERP core components
D) ERP extended components
11) ________ immediately after the purchase order is issued in the procure-to-pay process. A) Payment is settled B) Price and terms are negotiated C) Credit is checked D) Goods are received E) Invoices are received
D) Goods are received
56) Specifically, ERP extended components focus primarily on ________. A) customer relationship management and product lifecycle management B) product lifecycle management and supply chain management C) customer relationship management and human capital management D) human capital management and supply chain management E) customer relationship management and supply chain management
E) customer relationship management and supply chain management
31) A ________ information flow relates to the information that is produced by a company and sent along to another organization. A) stand-alone B) legacy C) packaged D) custom E) downstream
E) downstream
34) A(n) ________ is an integrated suite of business applications for virtually every department, process, and industry, allowing companies to integrate information across operations on a company-wide basis using one large database. A) legacy system B) management information system C) decision support system D) distributed system software E) enterprise system
E) enterprise system
36) A(n) ________ coordinates business processes with customers, suppliers, and business partners of an organization. A) internally focused system B) legacy system C) stand-alone system D) intermediary system E) externally focused system
E) externally focused system
57) Which of the following is true regarding the formula for success of an enterprise system? A) Enterprise systems implementations should include personnel from different departments. B) The success of an enterprise system depends directly on the support received from middle-management. C) Enterprise systems are simple to understand and implement when compared to stand-alone systems. D) Using outside consultants tends to complicate the implementation of an enterprise system. E) Once enterprise systems go live, employees experience an immediate growth in productivity.
A) Enterprise systems implementations should include personnel from different departments.
38) ________ are applications written by third-party vendors that are used by many different users and organizations. A) Packaged software B) Custom software C) Bespoke software D) Personalized software E) Tailored software
A) Packaged software
TRUE OR FALSE: Information systems management is one of the traditional functional areas that companies are organized around.
FALSE
50) How is business process management similar to quality improvement approaches such as total quality management? A) They are intended to be cross-functional approaches to improve an organization. B) They focus on radical redesign and drastic improvement of processes. C) They focus on incremental change of processes. D) They focus on the activities typically occurring at the operational level of the organization. E) They focus on providing capabilities for discovering "hidden" predictive relationships while conducting a forecast.
A) They are intended to be cross-functional approaches to improve an organization.
Fen-phen was an anti-obesity medication that consisted of two drugs: fenfluramine and phentermine. Fenfluramine was initially marketed by American Home Products, but was shown to cause potentially fatal pulmonary hypertension and heart valve problems. This eventually led to the withdrawal of the product and legal damages of over $13 billion. This is an example of ________. A) a product recall B) lean manufacturing C) production control D) the bullwhip effect E) a green business
A) a product recall
27) Human resource activities ________. A) are classified as a support activity since the primary activities cannot be accomplished without the employees to perform them B) include the design and development of applications that support the primary business activities C) include the purchasing of goods and services that are required as inputs to the primary activities D) integrate the internal applications with suppliers, business partners, and customers E) streamline the organization's internal value chain
A) are classified as a support activity since the primary activities cannot be accomplished without the employees to perform them
58) In service-oriented architecture, ________. A) business processes are broken down into individual components or services B) business processes of an organization are standardized C) business processes of an organization are carried out by a large, comprehensive system D) business processes are shared with channel partners E) business processes are modified to prevent illegal activities within the process
A) business processes are broken down into individual components or services
19) Which of the following goods are produced using the make-to-order approach? A) commercial aircraft B) shampoos C) lipsticks D) televisions E) refrigerators
A) commercial aircraft
Production scheduling ________. A) focuses on the coordination of all activities needed to create the product or service B) focuses on delivering products or services to consumers as well as warehousing C) leads to the development of a sourcing plan D) focuses on the development of inventory estimates E) focuses on delivering products or services to consumers as well as invoicing and payment collection
A) focuses on the coordination of all activities needed to create the product or service
41) Packaged software is ________. A) highly useful for standardized, repetitive tasks B) developed exclusively for a specific organization C) unique to a particular business or organization D) an application that needs to be maintained internally when changes are required E) used to accommodate a customer's particular preferences and expectations
A) highly useful for standardized, repetitive tasks
16) Which of the following uses a pull-based approach? A) make-to-order B) make-to-stock C) plan-to-produce D) account-to-report E) acquire-to-dispose
A) make-to-order
9) Which of the following is the first step in the procure-to-pay process? A) negotiate price and terms B) issue purchase order C) receive goods D) receive invoice E) settle payment
A) negotiate price and terms
4) For most businesses, the ________ process entails several subprocesses including creating a customer record, checking the customer's creditworthiness, creating an order, checking and allocating stock, and shipping. A) order-to-cash B) make-to-order C) procure-to-pay D) make-to-stock E) plan-to-produce
A) order-to-cash
20) ________ are performed by the functional areas that process inputs and produce outputs. A) Base activities B) Core activities C) Support activities D) Extended activities E) Focus activities
B) Core activities
53) ________ support the important internal activities of the organization for producing their products and services. A) ERP focus components B) ERP core components C) ERP extended components D) ERP base components E) ERP covering components
B) ERP core components
33) Legacy systems can prove problematic when information from multiple departmental systems is required to support business processes and decision making. Which of the following is most similar to the above scenario? A) Chuck's is a retail chain that has an inventory management system which is tied to an RFID system. This system notifies Chuck's managers when the inventory in its stores falls below a certain level. B) Quick Software Solutions has an automated system to track employee absence. It also uses a non-automated system like attendance registers that employees sign every day. This information is updated to Quick's database management system on a weekly basis. C) Nuok Tires supplies its products to Fresto, an automobile manufacturer. Nuok Tires' factories are located close to Fresto's factories to minimize transportation costs. D) Fender, a guitar manufacturer, allows customers to design their guitars online. Potential buyers need to send the design with the order to receive their customized guitars. E) Jsutmi successfully pursues a just-in-time inventory system. Recently, however, it has not been able to meet demand due to labor problems.
B) Quick Software Solutions has an automated system to track employee absence. It also uses a non-automated system like attendance registers that employees sign every day. This information is updated to Quick's database management system on a weekly basis.
Which of the following is the main objective of information systems that focus on improving supply chains? A) discouraging vendor-managed inventory systems B) accelerating product development and innovation C) discouraging sustainable production processes D) decentralizing the organizations E) encouraging the bullwhip effect
B) accelerating product development and innovation
6) In the order-to-cash process, once "checking credit" is done, it is followed by ________. A) collecting payment B) creating an order C) allocating stock D) picking, packing, and shipping E) preparing and sending the invoice
B) creating an order
43) Which of the following types of software is best suited for tasks that are unique to a particular business? A) collaborative B) custom C) groupware D) packaged E) ready-made application
B) custom
39) Applications that are designed and developed exclusively for a specific organization are known as ________. A) collaborative software B) custom software C) groupware D) ready-made application software E) packaged software
B) custom software
24) Outbound logistics activities focus on the ________. A) processing of orders B) distribution of end products within the order-to-cash business process C) pricing of goods and services D) transformation of raw materials into end products E) receiving and stocking of raw materials, parts, and products
B) distribution of end products within the order-to-cash business process
37) A system that communicates across organizational boundaries is sometimes referred to as a(n) ________. A) legacy system B) interorganizational system C) intraorganizational system D) internally focused system E) stand-alone system
B) interorganizational system
13) In the ________ process, goods are produced based on forecasts and are stored in a warehouse and sales orders are then fulfilled from inventory. A) configure-to-stock B) make-to-stock C) make-to-order D) engineer-to-order E) assemble-to-order
B) make-to-stock
17) Which of the following is typically the first step in the make-to-stock process? A) scheduling production B) procuring inputs C) processing sales orders D) negotiating price and terms E) creating customer records
B) procuring inputs
Using analytical tools to optimally utilize labor, materials, and equipment is a part of the ________ step of supply chain planning. A) demand forecasting B) production scheduling C) distribution planning D) inventory planning E) transportation scheduling
B) production scheduling
The term ________ is commonly used to refer to a collection of companies and processes involved in moving a product from the suppliers of raw materials to the customer. A) distribution resource planning B) supply chain C) procurement D) demand chain E) value network
B) supply chain
The key use of the manufacturing execution module of supply chain management is to ________. A) forecast and plan anticipated demand for products B) support production processes taking into account capacity and material constraints C) ensure that the materials required for production are available where needed, when needed D) assign optimal safety stock and target stock levels in all inventories in the supply network E) support receiving, storing, and picking of goods in a warehouse
B) support production processes taking into account capacity and material constraints
________ focuses on delivering products or services to consumers as well as warehousing, delivering, invoicing, and payment collection. A) Product demand planning B) Production planning C) Distribution planning D) Safety stock planning E) Inventory planning
C) Distribution planning
54) Financial management, operations management, human resource management, and other important internal activities require the support of ________. A) ERP essence components B) ERP exterior components C) ERP core components D) ERP extended components E) ERP basis components
C) ERP core components
________ is a business model in which the suppliers to a manufacturer manage the manufacturer's inventory levels based on preestablished service levels. A) Just-in-case manufacturing B) Scan-based trading C) Vendor-managed inventory D) Lean manufacturing E) Just-in-time
C) Vendor-managed inventory
One major problem affecting supply chains are ripple effects referred to as the ________. A) backflush effect B) multiplier effect C) bullwhip effect D) incremental effect E) stockwhip effect
C) bullwhip effect
7) According to the order-to-cash process, what would the next step be for an online retailer after creating an order for a customer? A) collect payment B) create customer record C) check and allocate stock D) pick, pack, and ship E) prepare and send invoice
C) check and allocate stock
10) In the procure-to-pay process, the negotiation of price and terms is followed by ________. A) settling the payment B) creating the customer record C) issuing the purchase order D) receiving the goods E) receiving the invoice
C) issuing the purchase order
Computer maker, Dell, realized the problems with keeping large inventories, especially because of the fast rate of obsolescence of electronics components. Dell now keeps only about two hours of inventory in its factories. The company is most likely using a ________. A) scan-based trading system B) customer-managed inventory system C) just-in-time inventory management system D) vendor-managed inventory system E) just-in-case inventory management system
C) just-in-time inventory management system
Inventory and safety stock planning ________. A) leads to the development of the overall demand forecast B) focuses on the coordination of all activities needed to create the product or service C) leads to the development of a sourcing plan D) focuses on delivering products or services to consumers as well as warehousing E) leads to the development of a transportation schedule
C) leads to the development of a sourcing plan
21) Which of the following is a core activity? A) human resource activities B) technology development C) operations and manufacturing D) administrative activities E) infrastructure activities
C) operations and manufacturing
3) Whenever an order is placed with online retailers, the retailers put together the order, ship it,and charge the customer's credit card. This process of selling a product or service is known as the ________ process. A) make-to-order B) time-to-market C) order-to-cash D) procure-to-pay E) make-to-stock
C) order-to-cash
40) Customers can purchase ________ software off the shelf to help them with their personal documents and communications. A) personalized B) tailored C) packaged D) custom E) bespoke
C) packaged
59) By breaking down business processes into individual services, organizations can react more swiftly to changing business needs. To achieve these benefits, services have to follow three main principles: A) reusability, interoperability, and reliability B) reusability, reliability, and componentization C) reusability, interoperability, and componentization D) reusability, interoperability, and accessibility E) reusability, accessibility, and componentization
C) reusability, interoperability, and componentization
Which of the following is the key use of the distribution planning module of supply chain management? A) to ensure that the materials required for production are available when needed B) to forecast and plan anticipated demand for products C) to optimize the allocation of available supply to meet demand D) to support production processes taking into account capacity and material constraints E) to support receiving, storing, and picking of goods in a warehouse
C) to optimize the allocation of available supply to meet demand
45) The features and modules that an enterprise system comes with out of the box are referred to as the ________. A) best-practices version B) reengineered version C) vanilla version D) customized version E) modified version
C) vanilla version
18) Which of the following goods are typically produced under a make-to-order approach? A) expensive high-volume goods B) cheap high-volume goods C) very expensive low-volume goods D) mass-produced goods E) goods from external vendors
C) very expensive low-volume goods
2) Which of the following statements about just-in-time strategies is true? A) Retailers using this strategy allow suppliers to maintain ownership of inventory within their warehouses or stores until items are scanned at the point of sale. B) Companies using this strategy allow the suppliers to manage the manufacturer's inventory levels based on preestablished service levels. C) Companies using this strategy maintain large inventories of supplies, parts, warehousing resources, and extra workers to meet production contingencies. D) Companies using this strategy are trying to optimize their ordering quantities such that parts or raw material arrive just when they are needed for production. E) The manufacturer or retailer using this strategy shares real-time sales data with their suppliers, who maintain inventory levels based on preestablished agreements.
D) Companies using this strategy are trying to optimize their ordering quantities such that parts or raw material arrive just when they are needed for production.
48) According to business process management, what would be management's next step after developing a vision for the organization? A) They should identify the ways in which information systems can be used to improve the various business processes. B) They should design and implement a prototype of the new processes. C) They should manage the information technology to be used from a business transaction perspective. D) They should identify the critical processes that are to be redesigned. E) They should understand and measure the existing processes as a baseline for future improvements.
D) They should identify the critical processes that are to be redesigned.
Which of the following statements about vendor-management inventory (VMI) is true? A) To make VMI possible, the manufacturer must maintain large inventories of supplies, parts, warehousing resources, and extra workers to meet production contingencies. B) Manufacturers using the VMI business model manage the inventories themselves and send out requests for additional items to the vendors as needed. C) Companies using this strategy are trying to optimize their ordering quantities such that parts or raw material arrive just when they are needed for production. D) To make VMI possible, the manufacturer allows the supplier to monitor stock levels and ongoing sales data. E) Retailers using this strategy allow suppliers to maintain ownership of inventory within their warehouses or stores until items are scanned at the point of sale.
D) To make VMI possible, the manufacturer allows the supplier to monitor stock levels and ongoing sales data.
Demand planning and forecasting leads to the development of the overall ________. A) sourcing plan B) transportation schedule C) production plan D) demand forecast E) safety stock plan
D) demand forecast
51) Applications that integrate business activities across departmental boundaries are often referred to as ________ systems. A) manufacturing resource planning B) computer-integrated manufacturing C) capacity requirement planning D) enterprise resource planning E) materials requirement planning
D) enterprise resource planning
35) An internally focused system helps an organization coordinate with ________. A) its suppliers B) its business partners C) the government D) its departments E) its customers
D) its departments
22) Inbound logistics involves business activities associated with ________. A) distributing end products within the order-to-cash business process B) creating marketing literature C) communicating with potential and existing customers D) receiving and stocking raw materials, parts, and products E) order processing
D) receiving and stocking raw materials, parts, and products
La Belle Inc. introduced a new line of accessories for teenaged girls last season. Following its immense popularity with the targeted group, the company anticipated high sales this season. It ordered raw materials accordingly, and even ensured that they had sufficient inventory to meet excess demand, if any. However, the success of the new line turned out to be a fad, as the teens soon turned to other products offered by competing brands, and La Belle's sales declined. This forecasting error caused a huge discrepancy in the amount of raw materials they needed and the amount of inventory they had already piled up in anticipation of good sales. This is an example of ________. A) the multiplier effect B) hindsight bias C) product recall D) the bullwhip effect E) safety stock planning
D) the bullwhip effect
30) A(n) ________ information flow consists of information that is received from another organization. A) stand-alone B) legacy C) packaged D) upstream E) downstream
D) upstream
MaxSteel Inc., has been supplying steel to a well-known car manufacturer, Agis Corp., for the past 3 years. Concerned employees at MaxSteel can directly access Agis Corp.'s inventory and sales information via electronic data interchange. This allows MaxSteel to monitor Agis Corp.'s inventory levels on a real-time basis. The system has worked well for both companies so far and there has never been any delay in the supply of steel. Which of the following, if true, would most strengthen Agis' supply chain strategy? A) Agis Corp.'s management decides to take strong measures for increasing their safety stock of all raw materials. B) Agis Corp. is taking measures to add wholesalers and retailers into their supply chain. C) Agis Corp. has a strong desire to purchase MaxSteel in order to reduce dependency. D) Agis Corp. is taking measures to directly contact the consumers by removing wholesalers and retailers from their supply chain. E) Agis Corp. is taking measures to ensure that the information shared with MaxSteel will not be shared outside their organization.
E) Agis Corp. is taking measures to ensure that the information shared with MaxSteel will not be shared outside their organization.
52) Which of the following is true regarding enterprise resource planning (ERP)? A) It stores data in different locations. B) It is an older version of materials requirement planning. C) It helped in developing the manufacturing resource planning package. D) Stand-alone applications are a developed version of ERP. E) It makes the process of sharing information between business activities easier.
E) It makes the process of sharing information between business activities easier.
________ involves the development of various resource plans to support the efficient and effective production of goods and services. A) Supply chain visibility B) Supply chain analytics C) Supply chain execution D) Supply chain networking E) Supply chain planning
E) Supply chain planning
5) An online retailer has finished creating a customer record. What would be the next step for the retailer in an order-to-cash process? A) create order B) allocate stock C) pick, pack, and ship D) prepare and send invoice E) check customer's creditworthiness
E) check customer's creditworthiness
26) The hardware and software that must be implemented to support the applications that the primary activities use are a part of the ________ activities. A) human resources B) technology development C) procurement D) inbound logistics E) infrastructure
E) infrastructure
15) In the ________ process, raw materials, subcomponents, and accessories are procured based on forecasts, but actual manufacturing does not start until sales orders are received. A) order-to-cash B) procure-to-pay C) make-to-stock D) acquire-to-dispose E) make-to-order
E) make-to-order
23) Assembly processes are ________ activities. A) outbound logistics B) marketing and sales C) customer sales D) administrative E) operations and manufacturing
E) operations and manufacturing
8) The several processes associated with the acquiring of goods from external vendors are collectively referred to as the ________ process. A) make-to-stock B) make-to-order C) order-to-cash D) plan-to-produce E) procure-to-pay
E) procure-to-pay
The key use of the order promising module of supply chain management is to ________. A) work with partners across the supply network to improve accuracy of demand forecasts, reduce inventory buffers, and improve customer service B) monitor key performance indicators to assess performance across the supply chain C) manage logistics between company locations or from company to customers, taking into account transportation modes and constraints D) assign optimal safety stock and target stock levels in all inventories in the supply network E) provide answers to customer relationship management queries regarding product availability, costs, and delivery times
E) provide answers to customer relationship management queries regarding product availability, costs, and delivery times
12) Receiving the goods is followed by ________ in the procure-to-pay process. A) settling the payment B) negotiating the price and terms C) issuing the purchase order D) creating the order E) receiving the invoice
E) receiving the invoice
TRUE OR FALSE: 62) The order-to-cash process entails subprocesses such as price and terms negotiations, issuing of the purchase order, receiving the goods, and receiving and paying the invoice.
FALSE
TRUE OR FALSE: 64) In the make-to-stock process, raw materials, subcomponents, and accessories are procured based on forecasts, but actual manufacturing does not start until sales orders are received.
FALSE
TRUE OR FALSE: A legacy system is an integrated suite of business applications for virtually every department, process, and industry, allowing companies to integrate information across operations on a company-wide basis using one large database.
FALSE
TRUE OR FALSE: Enterprise resource planning core components support the primary external activities of the organization for dealing with suppliers and customers.
FALSE
TRUE OR FALSE: Enterprise resource planning extended components support internal operations such as financial management, operations management, and human resource management.
FALSE
TRUE OR FALSE: Internally focused systems coordinate business processes with customers, suppliers, and business partners.
FALSE
TRUE OR FALSE: To achieve benefits, a service should have interoperability which means that the service should be usable in many different applications.
FALSE
TRUE OR FALSE: 61) The core business processes common to most business organizations are order-to-cash, procure-to-pay, and make-to-stock.
TRUE
TRUE OR FALSE: A system that communicates across organizational boundaries is sometimes referred to as an interorganizational system (IOS).
TRUE
TRUE OR FALSE: Customer relationship management applications concentrate on the activities involved in promoting and selling products to the customers as well as providing customer service and nourishing long-term relationships.
TRUE
TRUE OR FALSE: Enterprise resource planning control refers to the locus of control over the computing systems and data contained in these systems, as well as decision making authority.
TRUE
TRUE OR FALSE: Enterprise resource planning replaces stand-alone applications by providing various modules based on a common database and similar application interfaces that service the entire enterprise rather than portions of it.
TRUE
TRUE OR FALSE: Rather than storing information in separate places throughout the organization, enterprise systems provide a central repository common to all corporate users.
TRUE
TRUE OR FALSE: Systems that focus on the specific needs of individual departments are typically not designed to communicate with other systems in the organization and are therefore referred to as stand-alone applications.
TRUE
TRUE OR FALSE: The main objective of enterprise systems is to create competitive advantage by streamlining business activities within and outside a company.
TRUE
TRUE OR FALSE: The make-to-order process uses the pull-based approach.
TRUE
TRUE OR FALSE: The processes associated with buying goods from external vendors are together referred to as the procure-to-pay process.
TRUE
TRUE OR FALSE: There are two major categories of enterprise resource planning (ERP) components—ERP core components and ERP extended components.
TRUE
TRUE OR FALSE: Using service-oriented architecture, business processes are broken down into individual components that are designed to achieve the desired results for the service consumer.
TRUE
