Chapter: Chapter 10: Enterprise Information Systems
Multiple Choice
1. Typically, as business strategies and technologies changed, older legacy systems were:
a) modified repeatedly and patched to the point where they just could not be modified anymore.
b) immediately replaced with the latest software, hardware, and network technologies
c) gradually replaced with cloud computing solutions.
d) interfaced with newer information technologies so they could exchange data without
limitations.
2. Enterprise systems are integrated ISs that support core business processes and functions. How
is integration achieved?
a) Integration is achieved by connecting wired and wireless computer networks so they can share
applications.
b) Integration is achieved by outsourcing to vendors that replace stand-alone ISs with a single IS.
c) Integration is achieved by linking databases and data warehouses so they can share data.
d) Integration is achieved by using cloud computing.
3. The greatest challenges when implementing enterprise systems are due to _____.
a) the technologies
b) vendors
c) process and change management
d) end-users
4. Under Armour Inc., the originator of performance apparel, was having had sharp spikes in
orders. The company reduced the cost and effort of their order fulfillment process by replacing
manual processes with __________ that provide data about resource availability and delivery
dates.
a) available-to-promise (ATP) capabilities
b) enterprise systems
c) information silos
d) customer relationship management (CRM) capabilities
5. Enterprise systems help managers and companies improve their performance by enabling them
to __________.
a) distribute data and periodic reports via e-mail internally to authorized users.
b) seamlessly share real-time data internally among departments and with external business
partners.
c) consolidate data stores into a central data repository.
d) outsource business processes to SaaS vendors and eliminate waste.
6. Prior to selecting and implementing an ERP or other enterprise system, it’s essential that a
company identify the _____.
a) problems to be solved
b) goals to be achieved and type of support the IS is to provide
c) problems to be solved, goals to be achieved, and type of support the IS is to provide
d) cost of implementation and maintenance
7. __________ is the ability to thrive in a changing environment, which can be achieved by
streamlining processes for quick response.
a) Agility
b) Scalability
c) Reengineering
d) Collaborative planning
8. __________ are commercial software packages that integrate business processes, including
supply chains, manufacturing, financial, human resources, budgeting, sales, and customer
service.
a) CPFR systems
b) ERP systems
c) KM systems
d) SCM software
9. __________ help organizations identify, select, organize, disseminate, preserve, and share
information and expertise.
a) CPFR systems
b) ERP systems
c) KM systems
d) SCM software
10. With __________, suppliers and retailers collaborate in planning and demand forecasting in
order to ensure that members of the supply chain will have the right amount of raw materials and
finished goods when they need them.
a) CPFR systems
b) ERP systems
c) KM systems
d) SCM software
11. Which is not one of the reasons why companies might need to migrate from legacy systems
to enterprise systems?
a) Legacy systems have high maintenance costs.
b) Monolithic legacy architectures are inflexible.
c) Legacy systems are hardwired by predefined process flows making integration with Internetbased apps difficult or impossible.
d) Enterprise systems require retraining of end users whose productivity will slow initially as
they adjust to a new way of doing their jobs.
12. Characteristics of enterprise systems include all of the following except:
a) Because of their complexity, enterprise systems are leased or licensed from vendors and
customized with support from IT personnel who are familiar with their company's business
processes.
b) There is a trend toward ERP as a service, which is increasing.
c) Enterprise systems automated existing business processes to minimize disruption and training
costs.
d) To simplify and reduce the high cost of the ERP software selection process, there is an annual
ERP Vendor Shootout to help ERP selection teams at companies with manufacturing,
distribution, or project-oriented requirements.
13. Each of the following describes ERP systems except:
a) ERP apps interface with business partners through a B2B gateway, but cannot interface with
legacy apps.
b) From a technology perspective, ERP is the software infrastructure that links an enterprise’s
internal apps and supports its external business processes.
c) ERP apps are modular, and the modules are integrated with each other to expand capabilities.
d) Departments can easily stay informed of what’s going on in other departments that impact its
operations or performance.
14. Business-to-business integration (B2Bi) is vital for efficient and accurate flow of data across
internal ISs and external business partners. B2Bi and secure data exchange over the Internet is
done through __________.
a) wireless routers
b) B2B gateways
c) data sources
d) enterprise application integration (EAI) middleware
15. Why are ERP systems strategic weapons for food manufacturers?
a) The threats and potential costs associated with food safety have decreased because of data
transparency.
b) ERP systems have lowered global barriers to entry into the food industry.
c) ERP systems are needed for controlling costs, managing inventory, and meeting government
regulations given the food industry’s margin pressures.
d) ERP systems are needed to monitor competitors’ business practices and quickly respond to
them.
16. Typically, how are ERP systems acquired?
a) By purchasing or leasing packaged software
b) Built in-house
c) Built with proprietary software
d) Custom built by consulting companies and vendors
17. What is the first step toward becoming an agile manufacturer?
a) Reengineer financial business processes
b) Develop the means to monitor the marketplace
c) Develop new products and services for current and prospective customers
d) Implement inventory tracking systems
18. Lessons learned from ERP failures include each of the following except:
a) Several of the best companies have suffered devastating consequences from ERP failures that
had led to multi-million dollar losses, bankruptcy, or lawsuits.
b) Most often, ERP failures are eventually fixed and remain in use, which gives the false
impression that the ERP was successful from the start.
c) The success—as well as failure—of ERP depends on organizational and technological factors
that occur prior to, during, and after the implementation.
d) Vendor blogs, white papers, and YouTube posts are good sources of objective data for
selecting a compatible ERP solution.
19. Despite potential benefits, not all companies invest in ERP if they cannot meet requirements
or overcome the challenges. Which of the following is not one of those requirements or
challenges?
a) Applications must be tightly aligned with well-defined and designed business processes.
b) Initial costs to purchase or lease and set up the ERP are very low, but maintenance might be
extremely high.
c) Selecting the appropriate ERP is time-consuming, complex, and expensive.
d) Apps may be too complex for employees to use correctly to improve efficiency and ROI.
20. Consumer product and retail industries lose about $40 billion annually, or 3.5 percent of their
sales, due to __________.
a) fraud
b) compliance failures
c) supply chain inefficiencies
d) quality control failures
21. Supply chains involve three main flows. Which of the following is not one of those main
flows?
a) financial flow
b) resource flow
c) information flow
d) material or product flow
22. Products that are returned make up what is called the __________.
a) reverse supply chain
b) return logistics
c) backflow
d) reorder fulfillment
23. Accounting, inventory management, and shipping are part of order fulfillment and referred to
as __________ operations.
a) back-office
b) customer-facing
c) front-office
d) logistics
24. Efficient, effective supply chains are fully dependent on SCM software, which depends on
__________.
a) EFT
b) ERP
c) up-to-date and accurate data
d) RFID
25. The concept of an on-demand enterprise is based on the premise that manufacturing or
service fulfillment operations will start only after an order is received. This approach is referred
to as__________.
a) produce-to-stock
b) build-to-order
c) JIT
d) safety stock
26. The most common solution to supply chain uncertainties is to build inventories or
__________ as insurance.
a) safety stock
b) stockouts
c) continuous replenishment
d) restocking
27. __________ is a supply chain relationship in which a vendor continuously monitors the
inventory of a retailer or distributor and automatically replenishes their inventory when levels hit
the re-order point.
a) Safety stock
b) Stockouts
c) Continuous replenishment
d) Bullwhip effect
28. Variability in demand in the supply chain is amplified as orders move up the supply chain.
This phenomenon is called __________.
a) market shifts
b) the bullwhip effect
c) continuous replenishment
d) demand forecasting
29. Supply chain collaboration can increase profit margins by as much as __________ percent
for supply chain partners, which is a significant improvement.
a) 3
b) 6
c) 9
d) 12
30. __________ is a set of data-driven business processes designed to improve the ability to
predict and coordinate with supply chain partners.
a) B2B e-commerce
b) Continuous replenishment
c) Collaborative planning, forecasting, and replenishment (CPFR)
d) Vendor managed inventory (VMI)
31. Data transfer between companies is done using __________, which is a communication
standard that enables the electronic transfer of routine documents, such as purchase orders,
between business partners.
a) RFID
b) collaborative planning, forecasting, and replenishment (CPFR)
c) vendor managed inventory (VMI)
d) electronic data interchange (EDI)
32. Attracting and acquiring new customers is estimated to costs banks roughly __________ per
new customer.
a) $10
b) $25
c) $50
d) $100
33. Retaining customers that generate revenues in excess of the costs of customer service,
returns, promotional items, and the like are critical; and are the underlying reason for
__________.
a) EDI
b) ERP
c) CRM
d) SCM
34. What is the purpose of frequent purchase programs offered by airlines, supermarkets, credit
card issuers, retailers, casinos, and other companies?
a) To track customers for CRM purposes
b) To build customer loyalty to improve financial performance
c) To deter customer attrition
d) All of the above
35. According to the loyalty effect, a five percent reduction in customer attrition can improve
profits by as much as __________ percent.
a) 5
b) 10
c) 15
d) 20
36. Apple’s iPhone and iPod are best examples of __________ business strategies because
demand was so high that many customers were even willing to camp out on sidewalks to
guarantee getting one on the day of their releases.
a) customer-centric
b) product-centric
c) upselling
d) cross-selling
37. Which is not a characteristic of CRM?
a) CRM is an enterprisewide effort to acquire and retain profitable customers.
b) An objective of CRM is to retain all customers through excellent and personalized customer
service and perks.
c) CRM focuses on building long-term, sustainable customer relationships for the purpose of
increasing the company’s profitability.
d) CRM is basically a simple idea, which is to treat different customers differently according to
the current or potential value to the company.
38. There have been many CRM failures reported in the media. Major issues relating to CRM
failures include each of the following except:
a) Customers rejecting loyalty programs or attempts to build loyalty.
b) Failure to identify and focus on specific business problems that the CRM can solve.
c) Lack of active senior management sponsorship.
d) Trying to automate a poorly defined business process in the CRM implementation.
39. Harrah’s Entertainment Inc. treats its customers differently. The more a customer spends in a
casino, the more rewards the customer gets. Harrah’s analyses customer data and assigns a value
to each customer based on the results of __________.
a) customer segmentation
b) payoff ratios
c) NPV
d) data mining
40. Knowledge management is an important enterprise system for each of the following reasons
except:
a) Forrester Research and IBM estimated that up to 85 percent of a company’s knowledge is not
stored in databases.
b) Knowledge is dispersed in social media, e-mail, texts, intranets, and on individual computers
and mobile devices.
c) Knowledge typically is highly structured and needs to be shared.
d) Knowledge is much more valuable than data and information, but it’s more ephemeral.
41. Which of the following statements about knowledge management systems (KMS) is false?
a) KMSs help an organization cope with rapid change and downsizing by making expertise of
the organization’s human capital widely accessible.
b) KMS are being built, in part, from increased pressure to maintain a well-informed, productive
workforce.
c) With a KMS, an organization is able to capitalize on the knowledge and experience of
employees worldwide.
d) Knowledge is structured to increase its
42. __________ are interactive systems used by employees to find and connect with colleagues
who possess the expertise needed to solve specific, critical business problems quickly.
a) Knowledge systems
b) Expert location systems (ELSs)
c) Expert systems
d) Electronic document management systems
43. __________ systems support the search for and sharing of organizational expertise, decision
making, and collaboration at the organization level regardless of location.
a) KM
b) ERP
c) CRM
d) SCM
44. Which is an example of knowledge?
a) A map giving detailed driving directions from one location to another.
b) An up-to-the-minute traffic bulletin along the freeway that indicates a traffic slowdown due to
construction.
c) Awareness of an alternative, back-roads route to avoid traffic and construction in order to
reach a destination as quickly as possible.
d) All of the above.
45. Why does a functioning KMS have a cyclical life cycle?
a) Knowledge is continually being created and that new knowledge must be placed in context
and stored so that it is actionable.
b) Knowledge has a short useful life span and needs to be replaced.
c) As knowledge bases increase in size, they become less useful because the knowledge cannot
be disseminated effectively.
d) Knowledge tends to be categorized incorrectly initially, and needs to be refined to become
useful.