Chapter 03 - Electronic Business Systems

Chapter 03
Electronic Business Systems

True / False Questions

1. Cross-functional enterprise systems cross the boundaries of traditional business functions in

order to reengineer and improve vital business processes all across the enterprise.
True False

2. Networked enterprises view cross-functional enterprise systems as a strategic way to use IT

to centralize information resources.
True False

3. Partner relationship management software concentrates on the efficiency of a firm's internal

production, distribution, and financial processes.
True False

4. Knowledge management applications focus on providing a firm's employees with tools that
support group collaboration, decision making, and human resources management.
True False

5. According to the Ogilvy and Mather case, companies should stick to the true blue
American business formula.
True False

6. According to the Ogilvy and Mather case, globalizing your firm's IT adds a whole new set
of challenges to the firm.
True False

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Chapter 03 - Electronic Business Systems

7. Enterprise application integration (EAI) software enables users to model the business
processes and interactions that should occur between business applications.
True False

8. Enterprise application integration (EAI) software provides legacy systems that perform data
conversion and subordination, and application communication and messaging services.
True False

9. Distribution and manufacturing are considered front office systems; customer service and
sales order entry are back office systems.
True False

10. The integration of enterprise application clusters has little, if any, impact on customer call
center responsiveness.
True False

11. Transaction processing systems play a vital role in supporting the operations of an e-
business enterprise.
True False

12. Online transaction processing (OLTP) is generally considered a post-event system

because transactions are entered nightly.
True False

13. Transaction processing systems update the corporate databases of an organization to

reflect changes resulting from day-to-day business transactions.
True False

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Chapter 03 - Electronic Business Systems

14. Transaction reports can take the form of a transaction listing, such as a payroll register.
True False

15. Enterprise collaboration systems are cross-functional e-business systems that enhance
communication, coordination, and collaboration among the members of business teams and
workgroups.
True False

16. Training in a virtual world is effective, but obstacles include both technology and culture.
True False

17. Training in a virtual world can both lower costs and increase efficiency.
True False

18. Collaborative work management tools help people accomplish or manage individual work
activities.
True False

19. The term interactive marketing has been coined to describe a supply chain management
process that is based on using the Internet, intranets, and extranets to establish a two-way
transactions between a business and its customers.
True False

20. Increasingly, sales people are using Web browsers and contact management software to
connect to their company's marketing websites.
True False

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21. Many companies view sales force tracking as a way to gain a strategic advantage in sales
productivity and marketing responsiveness.
True False

22. Firms such as transportation companies, wholesalers, retailers, financial institutions, and
service companies must use production/operations information systems to plan and control
their operations.
True False

23. The overall goal of computer-integrated manufacturing is to segregate the production and
support processes.
True False

24. Computer aided manufacturing systems are those that automate the production process,
such as employing humanlike robots to complete the step of painting the product being
manufactured.
True False

25. A process control computer system uses special sensing devices that measure physical
phenomena, such as temperature or pressure changes.
True False

26. Human resource information systems are designed to support most common human
resource functions, such as recruitment, selection, hiring, job placement, performance
appraisals, and training over corporate intranets.
True False

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Chapter 03 - Electronic Business Systems

27. Human resource management applications offered over corporate intranets can enable
managers and other employees to perform HRM tasks with little intervention by the HRM
department.
True False

28. Accounting information systems are among the newest, yet are the most widely used
information systems in business.
True False

29. Operational accounting systems emphasize legal and historical record-keeping and the
production of accurate financial statements.
True False

30. According to the Real World case, some of Cisco's employees are full-time
telecommuters, living and working in places such as Illinois while telecommuting to the firm's
offices in California.
True False

31. According to the Real World case, Cisco's latest strategy initiative, Cisco 3.0, is about
using technology and collaborative tools to fundamentally change the nature of work.
True False

32. According to the Real World case, the administrative costs for Novartis AG's 550 classes
have been reduced by about 50% through use of special HR software.
True False

33. According to the Real World case, HR departments are increasingly being called upon to
be a strategic partner in the firm.
True False

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Chapter 03 - Electronic Business Systems

Multiple Choice Questions

34. _______________ is defined as the use of the Internet and other networks and information
technologies to support electronic commerce, enterprise communication and collaboration,
and Web-enabled business processes, both within a networked enterprise and with customers
and business partners.
A. Electronic business
B. Enterprise collaboration
C. Cross-functional system management
D. Supply chain management

35. _______________ systems cross the boundaries of traditional business functions in order
to reengineer and improve vital business processes all across the enterprise.
A. Electronic business
B. Enterprise collaboration
C. Cross-functional enterprise
D. Supply chain management

36. Networked enterprises view _______________ systems as a strategic way to use IT to

decentralize information resources.
A. electronic business
B. enterprise collaboration
C. cross-functional enterprise
D. supply chain management

37. Moving from mainframe-based legacy systems to integrated, cross-functional client/server

applications typically involves installing _______________ software.
A. enterprise resource planning
B. supply chain management
C. customer relationship management
D. all of the choices are correct.

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38. Instead of focusing on the information processing requirements of business functions,

enterprise software focuses on supporting integrated clusters of _______________ involved
in the operations of a business.
A. application software
B. business processes
C. customer relationships
D. all of the choices are correct.

39. A(n) _______________ architecture illustrates the inter-relationships of the major cross-
functional enterprise applications that many companies have, or are installing, today.
A. enterprise application
B. enterprise operation
C. cross-functional
D. none of the choices are correct.

40. Which of the following applications focuses on the efficiency of a firm's internal
production, distribution, and financial processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

41. Which of the following applications focuses on acquiring and retaining profitable
customers via marketing, sales, and service processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

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Chapter 03 - Electronic Business Systems

42. Which of the following applications focuses on developing the most efficient and
effective sourcing and procurement processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

43. Which of the following applications focuses on tools that support group collaboration and
decision support?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

44. As described in the text, partner relationship management focuses on:

A. Developing the most efficient and effective sourcing and procurement processes
B. Acquiring and retaining profitable customers via delivery of timely products
C. Acquiring and retaining partners who can enhance the selling and distribution of a firm's
products and services
D. Providing a firm's employees with tools that support group collaboration and decision
support

45. According to the Ogilvy and Mather case, important elements in a global outlook include
all the following except:
A. Culture
B. Language
C. Dietary differences
D. Available bandwidth

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46. Enterprise application integration (EAI) software enables users to model the business
processes and interactions that should occur between:
A. International divisions
B. Suppliers and customers
C. End users
D. Business applications

47. Enterprise application integration (EAI) software provides _______________ that

performs data conversion and subordination, and application communication and messaging
services.
A. middleware
B. a legacy system
C. the telecommunication protocol
D. a business application

48. Distribution and manufacturing are _______________.

A. middleware
B. legacy systems
C. back office systems
D. front office systems

49. _______________ software can integrate the front-office and back office systems
applications of a business so they work together in a seamless, integrated way.
A. Customer relationship management (CRM)
B. Knowledge management (KM)
C. Enterprise application integration (EAI)
D. Supply chain management (SCM)

50. Customer service and sales order entry are _______________.

A. middleware
B. legacy systems
C. back office systems
D. front office systems

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51. _______________ are events that occur as part of doing business, such as sales,
purchases, deposits, withdrawals, refunds, and payments.
A. Items
B. Transactions
C. Occurrences
D. Processes

52. A transaction is _______________.

A. any exchange of goods
B. any business event that must be captured and recorded
C. an event requiring an exchange of money
D. any business process where an exchange of resources occurs

53. Transaction processing systems play a vital role in supporting the _______________ of an
e-business enterprise.
A. customer service
B. product distribution
C. operations
D. systems architecture

54. Transaction processing systems are _______________ information systems that process
data resulting from the occurrence of business transactions.
A. customer relationship management (CRM)
B. knowledge management (KM)
C. operational accounting
D. cross-functional

55. Online transaction processing is considered a _______________ system because it

captures and processes transactions immediately.
A. customer service
B. post-event
C. batch processing
D. real time

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Chapter 03 - Electronic Business Systems

56. The first step of the transaction processing cycle is _______________.

A. inquiry processing
B. document generation
C. transaction processing
D. data entry

57. _______________ update the corporate databases of an organization to reflect changes

resulting from day-to-day business transactions.
A. Online transaction processing (OLTP) systems
B. Enterprise application integration systems
C. Accounting processing systems
D. Transaction processing systems

58. Transaction processing systems process data in two basic ways: _______________ and
_______________.
A. Online processing, offline processing
B. Online/real-time processing, batch processing
C. Distributed processing, centralized processing
D. Replicated processing, distributed processing

59. _______________ systems are cross-functional information systems that enhance

communication and coordination among the members of business teams and workgroups.
A. Enterprise coordination
B. Enterprise integration
C. Enterprise collaboration
D. Transaction processing

60. The capabilities and potential of _______________ are driving the demand for better
enterprise collaboration tools in business.
A. the Internet
B. intranets
C. extranets
D. All of the choices are correct.

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Chapter 03 - Electronic Business Systems

61. Electronic mail, voice mail, faxing, Web publishing, bulletin board systems, and paging
are considered _______________ tools.
A. electronic communication
B. collaborative work management
C. electronic conferencing
D. All of the choices are correct.

62. Which of the following is considered a collaborative work management tool?

A. Calendaring and scheduling
B. Instant messaging
C. Voice conferencing
D. Paging

63. Training in a virtual world is effective, but obstacles include both _______________.
A. technology and culture
B. hardware and software
C. front office and back office
D. suppliers and customers

64. Training in a virtual world can both _______________.

A. increase costs and increase efficiency
B. lower costs and lower efficiency
C. increase costs and lower efficiency
D. lower costs and increase efficiency

65. _______________ tools help people accomplish or manage group work activities.
A. Calendaring and scheduling
B. Task and project management
C. Collaborative work management
D. Knowledge management

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66. Collaborative work management tools include all of the following except:
A. Calendaring and scheduling tools
B. Task and project management
C. Faxing, paging, and bulletin board systems
D. Knowledge management

67. A(n) _______________ business system is a type of information system that supports the
business functions of accounting, finance, marketing, operations management, and human
resource management.
A. functional
B. inter-enterprise
C. collaboration
D. enterprise resource

68. Marketing information systems can help marketing managers with:

A. Customer relationship management
B. Product planning and pricing
C. Targeted marketing strategies
D. All of the choices are correct.

69. Which of the following is considered a human resource business function?

A. Compensation analysis
B. Payroll
C. Customer relationship management
D. Sales force automation

70. Which of the following is considered a production/operations business function?

A. Personnel requirements forecasting
B. Process control
C. Investment management
D. Sales force automation

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71. Which of the following is supported by the marketing business function?

A. Compensation analysis
B. Process control
C. Credit management
D. Sales force automation

72. All of the following are supported by the accounting business function except:
A. General ledger
B. Inventory control
C. Capital budgeting
D. Payroll

73. Providing website visitors with chat rooms, Web forms and questionnaires, and e-mail
correspondence opportunities enables companies to use _______________ to encourage
customers to become involved in product development, delivery, and service issues.
A. order processing
B. interactive marketing
C. sales force automation
D. None of the choices are correct.

74. Targeted marketing includes all of the following components except:

A. Online behavior
B. Content
C. Credit
D. Demographics/psychographics

75. Advertising and promotion efforts can be tailored to each visit to a site by an individual.
This strategy is based on a variety of tracking techniques, such as Web "__________" files
recorded on the visitor's disk drive from previous visits.
A. Virus
B. Donut
C. Cookie
D. Compressed

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76. Many companies view sales force automation as a way to gain _______________ in sales
productivity and marketing responsiveness.
A. customer loyalty
B. strategic advantage
C. higher profits
D. demographic/psychographic customer statistics

77. _______________ information systems support the production/operations function that

includes all activities concerned with the planning and control of the processes producing
goods and services.
A. Finance
B. Management
C. Marketing
D. Manufacturing

78. Computer integrated manufacturing is an overall concept that stresses using computer-
based systems in manufacturing to do all the following, except:
A. Simplify production processes
B. Automate production processes
C. Integrate all production and support processes
D. Integrate collaboration and communication throughout the organization

79. The overall goal of computer-integrated manufacturing is to _______________ the

production and support processes.
A. simplify
B. automate
C. segregate
D. integrate

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80. The overall goal of computer-integrated manufacturing is to integrate the

_______________ and _______________ processes.
A. shipping, handling
B. sales, delivery
C. production,. support
D. receiving, payment

81. Computer-integrated manufacturing systems support all of the following concepts except:
A. Flexible manufacturing systems
B. Inquiry processing
C. Agile manufacturing
D. Total quality management

82. When a manufacturer automates production of a product by installing computer systems

to monitor processes and robots to do some of the assembly tasks, it is an example of
____________________.
A. computer integrated manufacturing
B. computer-aided manufacturing
C. process control
D. task control

83. Accounting systems are among the ____________________, yet _______________

information systems in business.
A. newest, least used
B. newest, most widely used
C. oldest, least used
D. oldest, most widely used

84. According to the text, _______________ emphasize legal and historical record-keeping
and the production of accurate financial statements.
A. operational accounting systems
B. management accounting systems
C. cross-functional accounting systems
D. financial accounting systems

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Chapter 03 - Electronic Business Systems

85. Which of the six essential accounting business systems mentioned in the text reflects
changes in inventory and provides shipping and reorder information?
A. Accounts payable
B. Accounts receivable
C. Inventory control
D. Order processing

86. Which of the six essential accounting business systems mentioned in the text records
purchases from, amounts owed to, and payments to suppliers?
A. Accounts payable
B. Accounts receivable
C. Inventory control
D. Order processing

87. Computer-based _______________ systems support business managers and professionals

in decisions concerning the financing of a business, and the allocation and control of financial
resources within a business.
A. accounting information
B. financial management
C. marketing information
D. management information

Fill in the Blank Questions

88. Instead of focusing on the information processing requirements of business functions,

enterprise software focuses on supporting integrated clusters of business _______________
involved in the operations of a business.
________________________________________

89. An enterprise _______________ architecture illustrates the inter-relationships of the

major cross-functional enterprise applications that many companies have, or are installing,
today.
________________________________________

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Chapter 03 - Electronic Business Systems

90. _______________ systems cross the boundaries of traditional business functions in order
to reengineer and improve vital business processes all across the enterprise.
________________________________________

91. _______________ focuses on the efficiency of a firm's internal production, distribution,

and financial processes.
________________________________________

92. EAI software can integrate the front-office and ________________ applications of a
business so they work together in a seamless, integrated way.
________________________________________

93. A transaction is _______________.

________________________________________

94. Transaction processing systems (TPS) are _______________ information systems that
process data resulting from the occurrence of business transactions.
________________________________________

95. Transaction processing systems process data in two basic ways: batch processing and
_______________ processing.
________________________________________

96. Many online systems depend on the capabilities of _______________ tolerant computer
systems that can continue to operate if parts of the system fail.
________________________________________

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97. Electronic conferencing options include electronic meeting systems and other group
support systems where team members can meet at the same time and place in a
_______________ room setting.
________________________________________

98. The goal of interactive marketing is to enable a company to profitably use networks to
attract and ___________ customers who will become partners with the business.
________________________________________

99. Advertising and promotion efforts can be tailored to each visit to a site by an individual.
This strategy is based on a variety of tracking techniques, such as Web "__________" files
recorded on the visitor's disk drive from previous visits.
________________________________________

100. The production/operations function is concerned with the management of the operational
processes and __________ of all business firms.
________________________________________

101. _______________ is an overall concept that stresses that the objectives of computer-
based systems in manufacturing must be to simplify, automate, and integrate all production
and support processes.
________________________________________

102. Manufacturing information systems help companies plan the types of material needed in
the production process. This is called ____________________ planning (MRP).
________________________________________

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103. Manufacturing execution systems monitor, track, and control the five essential
components in a production process: materials, equipment, _______________, instructions
and specifications, and production facilities.
________________________________________

104. _______________ control is the use of computers to control an ongoing physical

process.
________________________________________

105. Machine control is the use of computers to control the actions of machines. This is also
popularly known as _______________ control.
________________________________________

106. _______________ information systems are designed to support planning to meet the
personnel needs of the business, development of employees to their full potential, and control
all personnel policies and programs.
________________________________________

107. Human resource information systems support the strategic, tactical, and
_______________ use of the human resources of an organization.
________________________________________

108. Management accounting systems focus on the planning and __________ of business
operations.
________________________________________

109. The __________ budgeting process involves evaluating the profitability and financial
impact of proposed capital expenditures.
________________________________________

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110. _______________ planning software can help determine the financing needs of a
business and analyze alternative methods of financing.
________________________________________

111. EAI software can integrate _______________ and ________________ applications so

they work together in a seamless, integrated way.
________________________________________

112. Syntellect Interactive Services developed _______________ for cable pay-per-view

systems.
________________________________________

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Chapter 03 - Electronic Business Systems

Chapter 07 Electronic Business Systems Answer Key

True / False Questions

1. (p. 272) Cross-functional enterprise systems cross the boundaries of traditional business
functions in order to reengineer and improve vital business processes all across the enterprise.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

2. (p. 272) Networked enterprises view cross-functional enterprise systems as a strategic way to
use IT to centralize information resources.
FALSE

Networked enterprises view cross-functional enterprise systems as a strategic way to use IT to

decentralize information resources.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

3. (p. 275) Partner relationship management software concentrates on the efficiency of a firm's
internal production, distribution, and financial processes.
FALSE

Enterprise resource planning software concentrates on the efficiency of a firm's internal

production, distribution, and financial processes.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

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Chapter 03 - Electronic Business Systems

4. (p. 275) Knowledge management applications focus on providing a firm's employees with
tools that support group collaboration, decision making, and human resources management.
FALSE

Knowledge management applications provide a firm's employees with tools that support
group collaboration and decision making, but not human resources management.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

5. (p. 276) According to the Ogilvy and Mather case, companies should stick to the true blue
American business formula.
FALSE

Globalization is becoming critical, with challenges such as language, culture, time zones, and
physical infrastructure.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

6. (p. 276) According to the Ogilvy and Mather case, globalizing your firm's IT adds a whole
new set of challenges to the firm.
TRUE

Globalization is becoming critical, with challenges such as language, culture, time zones, and
physical infrastructure.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

7. (p. 266) Enterprise application integration (EAI) software enables users to model the business
processes and interactions that should occur between business applications.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

8. (p. 276) Enterprise application integration (EAI) software provides legacy systems that
perform data conversion and subordination, and application communication and messaging
services.
FALSE

Enterprise application integration (EAI) software provides middleware that performs data
conversion and subordination, and application communication and messaging services.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

9. (p. 277) Distribution and manufacturing are considered front office systems; customer service
and sales order entry are back office systems.
FALSE

Distribution and manufacturing are back office systems; customer service and sales order
entry are front office system.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

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Chapter 03 - Electronic Business Systems

10. (p. 277) The integration of enterprise application clusters has little, if any, impact on
customer call center responsiveness.
FALSE

The integration of enterprise application clusters has been shown to dramatically improve
customer call center responsiveness and effectiveness.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

11. (p. 278-279) Transaction processing systems play a vital role in supporting the operations of
an e-business enterprise.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

12. (p. 279) Online transaction processing (OLTP) is generally considered a post-event system
because transactions are entered nightly.
FALSE

Online transaction processing is considered a real-time system because it captures and

processes transactions immediately.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

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Chapter 03 - Electronic Business Systems

13. (p. 280) Transaction processing systems update the corporate databases of an organization to
reflect changes resulting from day-to-day business transactions.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

14. (p. 280) Transaction reports can take the form of a transaction listing, such as a payroll
register.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

15. (p. 281) Enterprise collaboration systems are cross-functional e-business systems that
enhance communication, coordination, and collaboration among the members of business
teams and workgroups.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

16. (p. 283) Training in a virtual world is effective, but obstacles include both technology and
culture.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

17. (p. 283) Training in a virtual world can both lower costs and increase efficiency.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

18. (p. 283) Collaborative work management tools help people accomplish or manage individual
work activities.
FALSE

Collaborative work management tools help people accomplish or manage group work
activities.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

19. (p. 284) The term interactive marketing has been coined to describe a supply chain
management process that is based on using the Internet, intranets, and extranets to establish a
two-way transactions between a business and its customers.
FALSE

The term interactive marketing has been coined to describe a customer-focused management
process.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

20. (p. 289) Increasingly, sales people are using Web browsers and contact management
software to connect to their company's marketing websites.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

21. (p. 289) Many companies view sales force tracking as a way to gain a strategic advantage in
sales productivity and marketing responsiveness.
FALSE

Many companies view sales force automation as a way to gain a strategic advantage.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

22. (p. 290) Firms such as transportation companies, wholesalers, retailers, financial institutions,
and service companies must use production/operations information systems to plan and
control their operations.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

23. (p. 291) The overall goal of computer-integrated manufacturing is to segregate the
production and support processes.
FALSE

The overall goal of computer-integrated manufacturing is to integrate the production and

support processes.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

24. (p. 291) Computer aided manufacturing systems are those that automate the production
process, such as employing humanlike robots to complete the step of painting the product
being manufactured.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

25. (p. 292) A process control computer system uses special sensing devices that measure
physical phenomena, such as temperature or pressure changes.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

26. (p. 292) Human resource information systems are designed to support most common human
resource functions, such as recruitment, selection, hiring, job placement, performance
appraisals, and training over corporate intranets.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

27. (p. 292-294) Human resource management applications offered over corporate intranets can
enable managers and other employees to perform HRM tasks with little intervention by the
HRM department.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

28. (p. 295) Accounting information systems are among the newest, yet are the most widely used
information systems in business.
FALSE

Accounting information systems are among the oldest systems.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

29. (p. 295) Operational accounting systems emphasize legal and historical record-keeping and
the production of accurate financial statements.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

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30. (p. 302-303) According to the Real World case, some of Cisco's employees are full-time
telecommuters, living and working in places such as Illinois while telecommuting to the firm's
offices in California.
TRUE

Whirlpool would like to work with a single vendor to provide the bulk of its supply chin
needs.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

31. (p. 302-303) According to the Real World case, Cisco's latest strategy initiative, Cisco 3.0, is
about using technology and collaborative tools to fundamentally change the nature of work.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

32. (p. 305) According to the Real World case, the administrative costs for Novartis AG's 550
classes have been reduced by about 50% through use of special HR software.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

33. (p. 305) According to the Real World case, HR departments are increasingly being called
upon to be a strategic partner in the firm.
TRUE

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

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Chapter 03 - Electronic Business Systems

Multiple Choice Questions

34. (p. 272) _______________ is defined as the use of the Internet and other networks and
information technologies to support electronic commerce, enterprise communication and
collaboration, and Web-enabled business processes, both within a networked enterprise and
with customers and business partners.
A. Electronic business
B. Enterprise collaboration
C. Cross-functional system management
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

35. (p. 272) _______________ systems cross the boundaries of traditional business functions in
order to reengineer and improve vital business processes all across the enterprise.
A. Electronic business
B. Enterprise collaboration
C. Cross-functional enterprise
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

36. (p. 272) Networked enterprises view _______________ systems as a strategic way to use IT
to decentralize information resources.
A. electronic business
B. enterprise collaboration
C. cross-functional enterprise
D. supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-32
Chapter 03 - Electronic Business Systems

37. (p. 272) Moving from mainframe-based legacy systems to integrated, cross-functional
client/server applications typically involves installing _______________ software.
A. enterprise resource planning
B. supply chain management
C. customer relationship management
D. all of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

38. (p. 272) Instead of focusing on the information processing requirements of business
functions, enterprise software focuses on supporting integrated clusters of _______________
involved in the operations of a business.
A. application software
B. business processes
C. customer relationships
D. all of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

39. (p. 272) A(n) _______________ architecture illustrates the inter-relationships of the major
cross-functional enterprise applications that many companies have, or are installing, today.
A. enterprise application
B. enterprise operation
C. cross-functional
D. none of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-33
Chapter 03 - Electronic Business Systems

40. (p. 275) Which of the following applications focuses on the efficiency of a firm's internal
production, distribution, and financial processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

41. (p. 275) Which of the following applications focuses on acquiring and retaining profitable
customers via marketing, sales, and service processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

42. (p. 275) Which of the following applications focuses on developing the most efficient and
effective sourcing and procurement processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

3-34
Chapter 03 - Electronic Business Systems

43. (p. 275) Which of the following applications focuses on tools that support group
collaboration and decision support?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

44. (p. 275) As described in the text, partner relationship management focuses on:
A. Developing the most efficient and effective sourcing and procurement processes
B. Acquiring and retaining profitable customers via delivery of timely products
C. Acquiring and retaining partners who can enhance the selling and distribution of a firm's
products and services
D. Providing a firm's employees with tools that support group collaboration and decision
support

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

45. (p. 276) According to the Ogilvy and Mather case, important elements in a global outlook
include all the following except:
A. Culture
B. Language
C. Dietary differences
D. Available bandwidth

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

3-35
Chapter 03 - Electronic Business Systems

46. (p. 276) Enterprise application integration (EAI) software enables users to model the
business processes and interactions that should occur between:
A. International divisions
B. Suppliers and customers
C. End users
D. Business applications

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

47. (p. 276) Enterprise application integration (EAI) software provides _______________ that
performs data conversion and subordination, and application communication and messaging
services.
A. middleware
B. a legacy system
C. the telecommunication protocol
D. a business application

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

48. (p. 277) Distribution and manufacturing are _______________.

A. middleware
B. legacy systems
C. back office systems
D. front office systems

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

3-36
Chapter 03 - Electronic Business Systems

49. (p. 277) _______________ software can integrate the front-office and back office systems
applications of a business so they work together in a seamless, integrated way.
A. Customer relationship management (CRM)
B. Knowledge management (KM)
C. Enterprise application integration (EAI)
D. Supply chain management (SCM)

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

50. (p. 277) Customer service and sales order entry are _______________.
A. middleware
B. legacy systems
C. back office systems
D. front office systems

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

51. (p. 278) _______________ are events that occur as part of doing business, such as sales,
purchases, deposits, withdrawals, refunds, and payments.
A. Items
B. Transactions
C. Occurrences
D. Processes

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-37
Chapter 03 - Electronic Business Systems

52. (p. 278) A transaction is _______________.

A. any exchange of goods
B. any business event that must be captured and recorded
C. an event requiring an exchange of money
D. any business process where an exchange of resources occurs

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

53. (p. 278-279) Transaction processing systems play a vital role in supporting the
_______________ of an e-business enterprise.
A. customer service
B. product distribution
C. operations
D. systems architecture

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

54. (p. 278) Transaction processing systems are _______________ information systems that
process data resulting from the occurrence of business transactions.
A. customer relationship management (CRM)
B. knowledge management (KM)
C. operational accounting
D. cross-functional

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-38
Chapter 03 - Electronic Business Systems

55. (p. 279) Online transaction processing is considered a _______________ system because it
captures and processes transactions immediately.
A. customer service
B. post-event
C. batch processing
D. real time

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

56. (p. 280) The first step of the transaction processing cycle is _______________.
A. inquiry processing
B. document generation
C. transaction processing
D. data entry

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

57. (p. 280) _______________ update the corporate databases of an organization to reflect
changes resulting from day-to-day business transactions.
A. Online transaction processing (OLTP) systems
B. Enterprise application integration systems
C. Accounting processing systems
D. Transaction processing systems

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

3-39
Chapter 03 - Electronic Business Systems

58. (p. 280) Transaction processing systems process data in two basic ways: _______________
and _______________.
A. Online processing, offline processing
B. Online/real-time processing, batch processing
C. Distributed processing, centralized processing
D. Replicated processing, distributed processing

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

59. (p. 281) _______________ systems are cross-functional information systems that enhance
communication and coordination among the members of business teams and workgroups.
A. Enterprise coordination
B. Enterprise integration
C. Enterprise collaboration
D. Transaction processing

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

60. (p. 281) The capabilities and potential of _______________ are driving the demand for
better enterprise collaboration tools in business.
A. the Internet
B. intranets
C. extranets
D. All of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

3-40
Chapter 03 - Electronic Business Systems

61. (p. 281-282) Electronic mail, voice mail, faxing, Web publishing, bulletin board systems, and
paging are considered _______________ tools.
A. electronic communication
B. collaborative work management
C. electronic conferencing
D. All of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

62. (p. 283) Which of the following is considered a collaborative work management tool?
A. Calendaring and scheduling
B. Instant messaging
C. Voice conferencing
D. Paging

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

63. (p. 283) Training in a virtual world is effective, but obstacles include both
_______________.
A. technology and culture
B. hardware and software
C. front office and back office
D. suppliers and customers

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

3-41
Chapter 03 - Electronic Business Systems

64. (p. 283) Training in a virtual world can both _______________.

A. increase costs and increase efficiency
B. lower costs and lower efficiency
C. increase costs and lower efficiency
D. lower costs and increase efficiency

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

65. (p. 283) _______________ tools help people accomplish or manage group work activities.
A. Calendaring and scheduling
B. Task and project management
C. Collaborative work management
D. Knowledge management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

66. (p. 282-283) Collaborative work management tools include all of the following except:
A. Calendaring and scheduling tools
B. Task and project management
C. Faxing, paging, and bulletin board systems
D. Knowledge management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

3-42
Chapter 03 - Electronic Business Systems

67. (p. 284) A(n) _______________ business system is a type of information system that
supports the business functions of accounting, finance, marketing, operations management,
and human resource management.
A. functional
B. inter-enterprise
C. collaboration
D. enterprise resource

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

68. (p. 284) Marketing information systems can help marketing managers with:
A. Customer relationship management
B. Product planning and pricing
C. Targeted marketing strategies
D. All of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

69. (p. 287) Which of the following is considered a human resource business function?
A. Compensation analysis
B. Payroll
C. Customer relationship management
D. Sales force automation

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-43
Chapter 03 - Electronic Business Systems

70. (p. 287) Which of the following is considered a production/operations business function?
A. Personnel requirements forecasting
B. Process control
C. Investment management
D. Sales force automation

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

71. (p. 287) Which of the following is supported by the marketing business function?
A. Compensation analysis
B. Process control
C. Credit management
D. Sales force automation

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

72. (p. 287) All of the following are supported by the accounting business function except:
A. General ledger
B. Inventory control
C. Capital budgeting
D. Payroll

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-44
Chapter 03 - Electronic Business Systems

73. (p. 287) Providing website visitors with chat rooms, Web forms and questionnaires, and e-
mail correspondence opportunities enables companies to use _______________ to encourage
customers to become involved in product development, delivery, and service issues.
A. order processing
B. interactive marketing
C. sales force automation
D. None of the choices are correct.

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

74. (p. 288) Targeted marketing includes all of the following components except:
A. Online behavior
B. Content
C. Credit
D. Demographics/psychographics

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

75. (p. 288) Advertising and promotion efforts can be tailored to each visit to a site by an
individual. This strategy is based on a variety of tracking techniques, such as Web
"__________" files recorded on the visitor's disk drive from previous visits.
A. Virus
B. Donut
C. Cookie
D. Compressed

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

3-45
Chapter 03 - Electronic Business Systems

76. (p. 289) Many companies view sales force automation as a way to gain _______________ in
sales productivity and marketing responsiveness.
A. customer loyalty
B. strategic advantage
C. higher profits
D. demographic/psychographic customer statistics

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

77. (p. 290) _______________ information systems support the production/operations function
that includes all activities concerned with the planning and control of the processes producing
goods and services.
A. Finance
B. Management
C. Marketing
D. Manufacturing

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

78. (p. 291) Computer integrated manufacturing is an overall concept that stresses using
computer-based systems in manufacturing to do all the following, except:
A. Simplify production processes
B. Automate production processes
C. Integrate all production and support processes
D. Integrate collaboration and communication throughout the organization

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-46
Chapter 03 - Electronic Business Systems

79. (p. 291) The overall goal of computer-integrated manufacturing is to _______________ the
production and support processes.
A. simplify
B. automate
C. segregate
D. integrate

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

80. (p. 291) The overall goal of computer-integrated manufacturing is to integrate the
_______________ and _______________ processes.
A. shipping, handling
B. sales, delivery
C. production,. support
D. receiving, payment

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

81. (p. 291) Computer-integrated manufacturing systems support all of the following concepts
except:
A. Flexible manufacturing systems
B. Inquiry processing
C. Agile manufacturing
D. Total quality management

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-47
Chapter 03 - Electronic Business Systems

82. (p. 292) When a manufacturer automates production of a product by installing computer
systems to monitor processes and robots to do some of the assembly tasks, it is an example of
____________________.
A. computer integrated manufacturing
B. computer-aided manufacturing
C. process control
D. task control

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

83. (p. 295) Accounting systems are among the ____________________, yet _______________
information systems in business.
A. newest, least used
B. newest, most widely used
C. oldest, least used
D. oldest, most widely used

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

84. (p. 295) According to the text, _______________ emphasize legal and historical record-
keeping and the production of accurate financial statements.
A. operational accounting systems
B. management accounting systems
C. cross-functional accounting systems
D. financial accounting systems

AACSB: Technology
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2

3-48
Chapter 03 - Electronic Business Systems

85. (p. 296) Which of the six essential accounting business systems mentioned in the text reflects
changes in inventory and provides shipping and reorder information?
A. Accounts payable
B. Accounts receivable
C. Inventory control
D. Order processing

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

86. (p. 296) Which of the six essential accounting business systems mentioned in the text records
purchases from, amounts owed to, and payments to suppliers?
A. Accounts payable
B. Accounts receivable
C. Inventory control
D. Order processing

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

87. (p. 296) Computer-based _______________ systems support business managers and
professionals in decisions concerning the financing of a business, and the allocation and
control of financial resources within a business.
A. accounting information
B. financial management
C. marketing information
D. management information

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-49
Chapter 03 - Electronic Business Systems

Fill in the Blank Questions

88. (p. 272) Instead of focusing on the information processing requirements of business
functions, enterprise software focuses on supporting integrated clusters of business
_______________ involved in the operations of a business.
processes

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

89. (p. 272) An enterprise _______________ architecture illustrates the inter-relationships of the
major cross-functional enterprise applications that many companies have, or are installing,
today.
application

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

90. (p. 272) _______________ systems cross the boundaries of traditional business functions in
order to reengineer and improve vital business processes all across the enterprise.
Cross-functional enterprise

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

91. (p. 275) _______________ focuses on the efficiency of a firm's internal production,
distribution, and financial processes.
Enterprise resource planning

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-50
Chapter 03 - Electronic Business Systems

92. (p. 277) EAI software can integrate the front-office and ________________ applications of a
business so they work together in a seamless, integrated way.
back-office

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

93. (p. 278) A transaction is _______________.

any business event that must be captured and recorded

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

94. (p. 278) Transaction processing systems (TPS) are _______________ information systems
that process data resulting from the occurrence of business transactions.
cross-functional

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

95. (p. 280) Transaction processing systems process data in two basic ways: batch processing
and _______________ processing.
real-time or online

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

3-51
Chapter 03 - Electronic Business Systems

96. (p. 280) Many online systems depend on the capabilities of _______________ tolerant
computer systems that can continue to operate if parts of the system fail.
fault

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

97. (p. 282) Electronic conferencing options include electronic meeting systems and other group
support systems where team members can meet at the same time and place in a
_______________ room setting.
decision

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

98. (p. 287) The goal of interactive marketing is to enable a company to profitably use networks
to attract and ___________ customers who will become partners with the business.
keep or retain

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

99. (p. 288) Advertising and promotion efforts can be tailored to each visit to a site by an
individual. This strategy is based on a variety of tracking techniques, such as Web
"__________" files recorded on the visitor's disk drive from previous visits.
cookie

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

3-52
Chapter 03 - Electronic Business Systems

100. (p. 290) The production/operations function is concerned with the management of the
operational processes and __________ of all business firms.
systems

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

101. (p. 291) _______________ is an overall concept that stresses that the objectives of
computer-based systems in manufacturing must be to simplify, automate, and integrate all
production and support processes.
Computer-integrated manufacturing (CIM)

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

102. (p. 291) Manufacturing information systems help companies plan the types of material
needed in the production process. This is called ____________________ planning (MRP).
material requirements

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

103. (p. 292) Manufacturing execution systems monitor, track, and control the five essential
components in a production process: materials, equipment, _______________, instructions
and specifications, and production facilities.
personnel

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

3-53
Chapter 03 - Electronic Business Systems

104. (p. 292) _______________ control is the use of computers to control an ongoing physical
process.
Process

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

105. (p. 292) Machine control is the use of computers to control the actions of machines. This is
also popularly known as _______________ control.
numerical

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

106. (p. 292) _______________ information systems are designed to support planning to meet
the personnel needs of the business, development of employees to their full potential, and
control all personnel policies and programs.
Human resource

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1

107. (p. 293) Human resource information systems support the strategic, tactical, and
_______________ use of the human resources of an organization.
operational

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

3-54
Chapter 03 - Electronic Business Systems

108. (p. 295) Management accounting systems focus on the planning and __________ of
business operations.
control

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

109. (p. 297) The __________ budgeting process involves evaluating the profitability and
financial impact of proposed capital expenditures.
capital

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 1

110. (p. 297) _______________ planning software can help determine the financing needs of a
business and analyze alternative methods of financing.
Financial

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

111. (p. 277) EAI software can integrate _______________ and ________________ applications
so they work together in a seamless, integrated way.
front office; back office

AACSB: Technology
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2

3-55
Chapter 03 - Electronic Business Systems

112. (p. 279) Syntellect Interactive Services developed _______________ for cable pay-per-
view systems.
online transaction processing system

AACSB: Technology
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 2

3-56