Test Bank For Essentials of MIS, 14th Edition by Kenneth C. Laudon, Jane P. Laudon by QuentinAxel

TEST BANK FOR Essentials of MIS, 14th edition Kenneth C. Laudon, Jane P. Laudon Chapter 1-12

Chapter 1

Business Information Systems in Your Career

1) Which of the following is the key business objective behind the technologies implemented by PCL Construction, as discussed in the chapter-opening case? A) Operational excellence B) Survival C) Improved employee morale D) Increased supplier intimacy E) Creation of a new business model Answer: A Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 2) Journalist Thomas Friedman's description of the world as "flat" refers to the: A) reduction of economic and cultural advantages of developed countries. B) use of the Internet for instantaneous communication. C) reduction in travel times and the ubiquity of global exchange and travel. D) growth of globalization. E) increased use of global currencies. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 3) The six important business objectives of information system investment include all of the following except: A) competitive advantage. B) employee morale. C) improved decision making. D) survival. E) new products. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today?

4) A firm that invests in an information system because it is a necessity of doing business does so because it is seeking to achieve which of the following business objectives? A) Survival B) Improved decision making C) Competitive advantage D) Operational excellence E) Customer intimacy Answer: A Difficulty: Moderate AACSB: Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 5) Walmart exemplifies the power of information systems coupled with excellent business practices and supportive management to achieve which of the following? A) New business models B) Operational efficiency C) Customer intimacy D) Competitive advantage E) Survival Answer: B Difficulty: Challenging AACSB: Analytical Thinking LO: 1-1: Why are information systems so essential for running and managing a business today? 6) Verizon uses a web-based digital dashboard to provide managers with real-time information, in order to: A) improve flexibility. B) improve decision making. C) gain competitive advantage. D) create supplier intimacy. E) create a new business model. Answer: B Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 7) Which business objective were competitors seeking when they rushed to provide ATMs after Citibank introduced the first ATMs in New York? A) Improved efficiency B) Customer and supplier intimacy C) Survival D) Competitive advantage E) Improved decision making Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 2

8) All of the following describe the effects of globalization except: A) significant decreases in operating costs. B) reduction of labor costs through outsourcing. C) increased ability to find low-cost suppliers. D) increases in transaction costs. E) ability to reliably obtain price and quality information worldwide. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 1-1: Why are information systems so essential for running and managing a business today? 9) A firm that must invest in a new information system in order to comply with federal legislation is investing to achieve which of the following business objectives? A) Customer intimacy B) Operational excellence C) New products. D) Improved decision making E) Survival Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 10) Which of the following is an example of a business using information systems to create new products and services? A) Apple's creation of the iPad B) JCPenney's information system that allows its contract manufacturers to see what garments have been sold and need to be replaced C) The Mandarin Oriental's use of computers to keep track of guests' preferences D) Verizon's web-based digital dashboard providing real-time company information for managers E) Walmart's Retail Link system Answer: A Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 11) An example of a business using information systems for supplier intimacy is: A) Apple's creation of the iPad. B) JCPenney's information system that allows its contract manufacturers to see what garments have been sold and need to be replaced. C) Citibank's ATM system. D) Verizon's web-based digital dashboard providing real-time company information for managers. E) the Mandarin Oriental's use of computers to keep track of guests' preferences. Answer: B 3

Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 12) To make sure it stocks clothes that its customers will purchase, a department store implements a new application that analyzes spending levels at its stores and cross-references this data to popular clothing styles. Which of the following business objectives is this information intended to support? A) New products B) Survival C) Customer intimacy D) Supplier intimacy E) New services Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 13) Software as a Service (SaaS) is an example of which of the following? A) Business intelligence B) Social business C) IoT D) Big Data E) Cloud computing Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 14) Which of the following is one of the management and people changes posing a major challenge in the business use of information systems? A) IoT B) Big Data C) Mobile Platform. D) Cloud Computing. E) Online collaboration Answer: E Difficulty: Easy AACSB: Analytical Thinking; Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 15) E-commerce and Internet advertising reached $105 billion in 2018, growing at about: A) 5 percent. B) 10 percent. C) 15 percent. D) 20 percent. E) 25 percent. 4

Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 16) What percent of employed Americans report spending some time working remotely? A) 13 percent B) 23 percent C) 33 percent D) 43 percent E) 53 percent Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 17) All of the following are technology-related challenges in MIS except: A) cloud computing. B) big data. C) IoT. D) the mobile platform. E) co-creation of business value. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 18) Which of the following statements is not true? A) In 2018, American businesses invested nearly $1 trillion in information systems hardware, software, and telecommunications equipment. B) In 2018, American businesses spent over $140 billion on business and management consulting and information technology services. C) In 2018, about 25 percent of all capital investment in the United States was for information systems hardware, software, and telecommunications equipment. D) In 2018, investments in the United States for technology and management consulting grew at a faster rate than the U.S. economy as a whole. E) Worldwide, non-U.S. expenditures for information technology exceeded $3.8 trillion. Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 19) In 2018, approximately how many adult Americans bought something online? A) 150 million B) 180 million C) 190 million D) 220 million 5

E) 230 million Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 20) What percent of the Fortune 500 companies uses Twitter to communicate with their customers? A) 20 percent B) 40 percent C) 50 percent D) 60 percent E) 80 percent Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 21) Over 90 percent of Internet users access the web with mobile devices. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 1-1: Why are information systems so essential for running and managing a business today? 22) A business model describes how a company produces, delivers, and sells a product or service to create wealth. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 23) Federal law requires many businesses to keep email messages for ten years. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 1-1: Why are information systems so essential for running and managing a business today? 24) Define operational excellence. How can information systems help achieve it? Answer: Operational excellence is the achievement of higher levels of productivity and efficiency. Information systems can help achieve operational excellence by improving communications to suppliers and optimizing the supply chain. Information systems could help managers communicate with workers more efficiently, enable technological innovation in products, minimize warehouse overhead, and streamline distribution. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 1-1: Why are information systems so essential for running and managing a business today? 6

25) You work for an auto dealer. How could you use information systems to achieve greater customer intimacy? Answer: You could create a website that allows customers to order customized cars, and communicate with support personnel and other car owners. You could create an automated email service reminding car owners to take their car in for periodic check-ups. You could have an information system that tracks customer preferences in your local area, so you can offer cars that reflect local customer needs and desires. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 1-1: Why are information systems so essential for running and managing a business today? 26) Which of the following is the best definition of an information system? A) A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization B) Computers, keyboards, printers, and telecommunications devices C) A set of detailed programmed instructions that transform raw data into information D) Physical devices and software that can be connected to share voice, data, images, sound, and video E) A global network that uses universal standards Answer: A Difficulty: Moderate AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 27) The three activities in an information system that produce the information are: A) information, research, and analysis. B) input, output, and feedback. C) input, processing, and output. D) data analysis, processing, and feedback. E) information, data, and processing. Answer: C Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 28) The average number of baseball tickets sold at a particular price is an example of: A) input. B) raw data. C) meaningful information. D) output. E) feedback. Answer: C Difficulty: Easy 7

AACSB: Analytical Thinking LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 29) Output: A) is feedback that has been processed to create meaningful information. B) is information that is returned to appropriate members of the organization to help them evaluate the input stage. C) transforms raw data into processed information. D) transfers processed information to the people who will use it or to the activities for which it will be used. E) is a stream of raw facts representing events occurring in organizations or the physical environment. Answer: D Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 30) Converting raw data into a more meaningful form is called: A) capturing. B) processing. C) organizing. D) feedback. E) inputting. Answer: B Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 31) Which of the following is an example of raw data from an automobile manufacturer? A) An average of 130 Subarus sold daily in New York in 2019 B) 1,300 Subaru Outbacks sold during the first quarter 2019 in New York C) One Subaru Outback sold January 7, 2019 in Mount Kisco, New York for $25,000 D) Annual sales of Subaru Outbacks increased 4.5 percent E) An average sale price of $26,000 for all Subaru Outbacks sold during January 2019 in Mount Kisco, New York Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components?

32) Which of the following fields deals with behavioral issues, as well as technical issues, surrounding the development, use, and impact of information systems used by managers and employees in the firm? A) Information systems literacy B) Information systems architecture C) Management information systems D) Information technology infrastructure E) Computer information systems Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 33) All of the following are examples of environmental actors in an information system except: A) customers. B) stockholders. C) feedback. D) competitors. E) regulatory agencies. Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 34) In a hierarchical organization, the upper levels consist of: A) managerial, professional and knowledge workers. B) managerial, professional, and technical workers. C) professional and operational workers. D) managerial, professional, and operational workers. E) knowledge, technical and operational workers. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 35) The fundamental set of assumptions, values, and ways of doing things that has been accepted by most of a company's members is called its: A) business process. B) environment. C) atmosphere. D) values. E) culture. Answer: E Difficulty: Easy 9

AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 36) All of the following can be considered managerial responsibilities except: A) making action plans to solve organizational problems. B) creating new products and services. C) designing new information systems. D) allocating human resources to coordinate the work to be done. E) setting strategy for responding to business challenges in the environment. Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 37) Data management technology consists of the: A) physical hardware and media used by an organization for storing data. B) detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. C) software governing the organization of data on physical storage media. D) hardware and software used to transfer data. E) universally accepted standards for storing data. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components?

38) Intranets: A) are based on mainframe technology. B) are multiple networks joined together. C) are typically used to communicate with the business's trusted vendors. D) use Internet technology for a private company network. E) provide the platform on which a firm builds its information systems. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 39) As described in the chapter case, which of the following constitutes an organizational element in the UPS tracking system? A) The specification of procedures for identifying packages with sender and recipient information B) Monitoring service levels 10

C) Promoting the company strategy of low-cost, superior service D) The use of handheld computers and networks for managing package delivery E) Routing software that creates the most efficient delivery route for each driver Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 40) As described in the chapter case, which of the following constitutes a people element of the UPS tracking system? A) The web-based Post Sales Order Management System B) The ability to provide package status reports to customers C) The decision to use automation D) The implementation of in-house package tracking software E) The ability to embed UPS functions in external sites Answer: C Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 41) A moving company has an information system that analyzes travel patterns and decides which routes are the most efficient for every van. The need for employees to follow procedures to update this system with arrival and departure times is a(n) dimension of the system. A) organizational B) managerial C) people D) technology E) cultural Answer: A Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 42) Why is "culture" an important factor to consider when building information system solutions to business problems? A) Culture is one element that can be radically changed, not always for the better, by new information systems. B) Culture affects how information system solutions are implemented and used. C) Culture is a cauldron of employee perspectives and conflicts, which can be used to improve business processes. D) Culture is the driving force behind decision making and innovation. E) Culture is the basis for organizational politics. Answer: B Difficulty: Challenging 11

AACSB: Analytical Thinking; Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 43) Which of the following is a global network that uses universal standards to connect millions of different networks around the world? A) An extranet B) The World Wide Web C) The Internet D) An intranet E) Verizon Answer: C Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 44) consists of detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. A) Computer software B) Programming C) Enterprise applications D) Business intelligence E) Data management technology Answer: A Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 45) is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format. A) FTP B) Email C) The World Wide Web D) HTML E) An extranet Answer: C Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 46) Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. Answer: TRUE Difficulty: Moderate 12

AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 47) An extranet is a private intranet extended to authorized users outside the organization. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 48) Computer literacy focuses primarily on knowledge of information systems. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 49) People, organizations, and information technology are all dimensions of information systems. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 50) The history and culture of business firms affects how it uses information technology. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 51) Developing a new product, fulfilling an order, and hiring a new employee are all examples of business processes. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 52) Business processes are logically related tasks for accomplishing work that have been formally encoded by an organization. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, 13

organizational, and technology components? 53) Employee attitudes about their jobs, employers, or technology can have a powerful effect on their abilities to use information systems productively. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 54) The Internet is the world's largest and most widely used network. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 55) A firm's IT infrastructure provides the platform on which the firm can build its information systems. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 56) UPS's use of web-based tools that allow customers to embed UPS functions, such as tracking and cost calculations, into their own websites, described in the chapter case, is an information systems solution used to achieve supplier intimacy. Answer: FALSE Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 57) Data is information that has been shaped into a form that is meaningful to human beings. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 58) Feedback is a specific type of output. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 14 Copyright © 2021 Pearson Education, Inc.

59) Intranets are private corporate networks extended to authorized users outside the organization. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 60) What important managerial function is impaired by not having access to timely and accurate information? What is the effect of this lack of data? Answer: The managerial function is decision making. Without access to timely and accurate information, business managers rely on forecasts, best guesses, and luck. The result is over- or under-production of goods and services, misallocation of resources, and poor response times. The potential poor outcomes can raise costs, and the company can lose customers. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 61) Describe the people dimension of information systems and give an example. Is this dimension as vital as the technology dimension when considering a technology-based solution to a business problem? Answer: The people dimension describes all of the factors related to employees, from operational personnel to senior management. Essentially, an organization and its information systems are worthless without skilled employees. For example, a people dimension of implementing a new information system is ensuring users are properly trained to use the system. The people dimension is just as vital as the other dimensions - the success of an information system depends on the people implementing and operating it. In addition, as a resource, employees are expensive to hire, manage, and train, whereas technology and hardware can be relatively inexpensive. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 62) You are a marketing manager for a national movie theater chain. Give an example of data that your department could use for creating meaningful information. What type of information could that data produce? Answer: Movie ticket sales from individual theaters would be an example of raw data. Meaningful information from this would be: average number of tickets sold to seniors on certain days of the week. Difficulty: Easy AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 15 Copyright © 2021 Pearson Education, Inc.

63) Define a business process. What might be a business process used at a hospital? Answer: A business process is a set of logically related tasks and behaviors for accomplishing work. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 64) What is the difference between information technology and information systems? Answer: Information technology (IT) consists of all the hardware and software that a firm needs to use to achieve its business objectives. Information systems are more complex. An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 65) This chapter discusses how each organization has its own culture and sets of values shared by most of its members. What kind of shared values might you find at a law firm? Answer: Shared values at a law firm might be: The legal system works, the legal system is fair, lawyers help people, and people need help with the legal system because it is complicated. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? 66) Why is the building of a house an appropriate analogy for the building of an information system? Answer: Houses are built with hammers, nails, and wood, but these alone do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one's head. Computers and programs are the hammer, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to these solutions. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components?

67) A database into which employees manually input customer names and addresses is riddled with errors and you have been charged with rectifying the situation. In considering the organizational dimensions of this problem, you should consider the: A) skill levels of the employees inputting the data. B) training given to the employees inputting the data. C) business processes in place governing the manual input of the data. D) types of automatic error checking provided by the input software. E) storage capacity of the database. Answer: C Difficulty: Moderate AACSB: Application of Knowledge; Information Technology LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 68) The first step in the model of business problem solving discussed in the chapter is: A) interviewing the people involved in the problem. B) identifying the problem. C) outlining the problem's causes. D) assigning the problem to a problem solver. E) evaluating possible solutions to the problem. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 69) Outdated software is an example of the dimension of business problems. A) technology B) organizational C) people D) management E) cultural Answer: A Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

70) Work environment is an example of the dimension of business problems. A) management B) organizational C) people D) technology E) cultural Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 71) Which of the following is not an element of critical thinking? A) Following a rote pattern of decision making B) Maintaining doubt and suspending judgment C) Being aware of different perspectives D) Testing alternatives and letting experience guide E) Being aware of organizational and personal limitations Answer: A Difficulty: Challenging AACSB: Application of Knowledge; Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 72) Inadequate resources are an example of the dimension of business problems. A) management B) organizational C) people D) infrastructure E) cultural Answer: B Difficulty: Moderate AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

73) The owners of Speed-EZ, a new bike messenger service, are concerned about how they will manage their messengers once the messengers have left the office. This is a business problem that falls into the: A) management dimension. B) people dimension. C) organizational dimension. D) technology dimension. E) cultural dimension. Answer: B Difficulty: Challenging AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 74) Flapjack Flats, a new pancake restaurant chain, is having difficulty finding pancake chefs. This is a business problem that falls into the: A) management dimension. B) people dimension. C) organizational dimension. D) technical dimension. E) cultural dimension. Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 75) In choosing the best solution for a business problem, all of the following are important considerations except: A) the cost of the solution. B) the feasibility of the solution given existing resources and skills. C) the length of time to implement the solution. D) the attitudes of employees. E) the ability to forget about the problem once it has been solved. Answer: E Difficulty: Challenging AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

76) The final step in the four-step model of business problem solving is: A) outcome. B) implementation. C) change management. D) feedback. E) employee retraining. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 77) Which of the following would not be considered part of the implementation phase of problem solving? A) Change management B) Purchasing hardware for an information systems solution C) Training an employee on new systems software D) Evaluating a selection of software packages for implementing a new business process E) Determining the attitude of employees about the solution Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 78) The failure of NASA's initial solution to preventing the space shuttle shedding foam illustrates the: A) importance of training employees on new business processes. B) need to prepare for measuring outcomes of a business solution. C) continuous nature of problem solving. D) need to quickly adapt to new technological innovations. E) importance of organizational change in problem solving. Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

79) Perhaps the most frequent error in problem solving is: A) rushing to judgment about the nature of a problem. B) not being aware of personal limitations. C) being too doubtful. D) following a rote pattern of decision making. E) failing to consider all dimensions of a problem. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 80) Assume you work for a package delivery service in a major metropolitan area and that the business has been losing customers for several years. You have been asked to find a solution to this problem. What is the correct way to proceed? A) Look for solutions, evaluate the solutions, identify the problem more clearly, and then implement the solution. B) Think about what solutions can be implemented, look for solution designs, evaluate the designs, and then implement the solution. C) Identify the problem, design alternative solutions, choose the best solution, and then implement the solution. D) Design solutions, evaluate and identify the problems, choose the best solution, and then implement the solution. E) Identify relevant information technologies, interview employees, choose a technology, and implement the technology. Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Application of Knowledge; Information Technology LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 81) Which are the three major dimensions of business problem solving? A) Organizational dimensions, people dimensions, and technology dimensions B) Organizational dimensions, people dimensions, and environmental dimensions C) People dimensions, technology dimensions, and environmental dimensions D) Technology dimensions, organizational dimensions, and environmental dimensions E) Organizational dimensions, technology dimensions, and cultural dimensions Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

82) Identifying a problem includes agreeing that a problem exists. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 83) An unsupportive culture is an example of the people dimension of business problems. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 84) Encouraging employees to adapt to new business processes is an important factor in change management. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 85) Describe the four steps taken in solving a business problem. Answer: The four steps are problem identification, solution design, choice of a solution, and implementation. In the problem identification step, relevant people in an organization must agree that a problem exists, what the problem is, what its causes are, and what can be done about the problem given the organization's resources. In the solution design step, as many solutions as possible should be determined. In the choice step, you choose the best solution from the list of options determined in the previous step. It is important to match a choice to existing resources, skills, and feasibility. In the last step, implementation, the solution is put in place. In information systems solutions, this may include purchasing hardware or software and testing it. Implementation also includes employee training, change management, and using a method to measure the outcome. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

86) What are the three dimensions of business problems? Give an example of each. Answer: (1) Organizational: This may include outdated business processes, unsupportive culture and attitudes, political conflict, turbulent business environment and change, complexity of task, and inadequate resources. (2) Technology: This may include insufficient or aging hardware, outdated software, inadequate database capacity, insufficient network capacity, incompatibility of old systems with new technology, and rapid technological change and failure to adopt new technologies. (3) People: This may include lack of employee training, difficulties in evaluating performance, legal and regulatory compliance, work environment, lack of employee support and participation, indecisive management, poor management and wrong incentives. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 87) The department chain you work for has had numerous complaints about slow customer service. Your colleague, a sales manager, informs you that this happened at a previous store she worked for, and it was cleared up by hiring more sales representatives. Should you take her advice? Why or why not? What techniques can you use in evaluating the problem? Answer: The advice should not be taken, as it is a rush to judgment, which could mean that the wrong solution is used, wasting time and resources. You should ask the colleague to employ critical thinking. Critical thinking is sustained suspension of judgment with an awareness of multiple perspectives and alternatives. It involves at least four elements: • Maintaining doubt and suspending judgment • Being aware of different perspectives • Testing alternatives and letting experience guide • Being aware of organizational and personal limitations Difficulty: Challenging AACSB: Interpersonal Relations and Teamwork; Analytical Thinking; Written and Oral Communication LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems?

88) How does critical thinking relate to the problem-solving process? Answer: Simply following a rote pattern of decision making, or a model, does not guarantee a correct solution. The best protection against incorrect results is to engage in critical thinking throughout the problem-solving process. Perhaps the most frequent error in problem solving is to arrive prematurely at a judgment about the nature of the problem. By doubting all solutions at first and refusing to rush to a judgment, you create the necessary mental conditions to take a fresh, creative look at problems and you keep open the chance to make a creative contribution. Second, it is important to recognize that all interesting business problems have many dimensions and that the same problem can be viewed from different perspectives such as the technology perspective, the organization perspective, and the people perspective. The third element of critical thinking involves testing alternatives, or modeling solutions to problems, and letting experience be the guide. Not all contingencies can be known in advance and much can be learned through experience. Therefore, it is important to experiment, gather data, and reassess the problem periodically. Difficulty: Challenging AACSB: Application of Knowledge; Analytical Thinking; Written and Oral Communication LO: 1-3: How will a four-step method for business problem solving help you solve information system-related problems? 89) Which of the following is an important skill for an accounting major? A) An understanding of online transaction and reporting systems B) An understanding of product management enterprise systems C) An understanding of supplier management enterprise systems D) An understanding of enterprise systems that enhance leadership E) An understanding of enterprise systems for customer relationship management Answer: A Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 90) Which of the following is an important skill for a marketing major? A) An understanding of online transaction and reporting systems B) An understanding of product management enterprise systems C) An understanding of supplier management enterprise systems D) An understanding of enterprise systems that enhance leadership E) An understanding of financial reporting systems Answer: B Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers?

91) What is the estimated growth rate for information systems managers' jobs through 2026? A) 5% B) 9% C) 13% D) 15% E) 17% Answer: C Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 92) Financial managers work directly with to ensure investments in information systems help achieve corporate goals. A) operations managers B) senior managers C) marketing managers D) accounting managers E) knowledge workers Answer: B Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 93) Which of the following statements is not true? A) The most common and successful offshore outsourcing projects involve production programming and system maintenance programming work, along with call center work related to customer relationship management systems. B) Inflation in Indian and Chinese wages for technology work is leading to a counter movement of some IT jobs back to the United States. C) Innovative new products, services, and systems are rarely outsourced. D) Software outsourcing of routine IS work to low-wage countries has increases the cost of building and maintaining systems in the United States. E) Management and organizational tasks required in systems development usually are not outsourced. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 1-4: What information systems skills and knowledge are essential for business careers? 94) Accountants need to understand online transaction and reporting systems. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers?

95) IT managerial jobs are outsourced easily because of the universal standards used by the Internet. Answer: FALSE Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 96) An understanding of enterprise-wide systems for customer relationship management is one of the skills relevant to careers in marketing. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 97) Whereas marketing and financial careers have been transformed by the growth in information systems, thus far managerial positions have remained relatively unaffected. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 1-4: What information systems skills and knowledge are essential for business careers? 98) There are two types of outsourcing: offshore outsourcing and foreign outsourcing. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 1-4: What information systems skills and knowledge are essential for business careers? 99) Describe at least three of the general information skills essential for all business careers. Answer: General information skills essential for all business careers include (1) understanding how information systems and technologies can help firms achieve business objectives such as operational efficiency, developing new products and services, and maintaining customer intimacy. Also essential is (2) developing skills in the analysis of information in order to help firms understand and make their data, as well as (3) business analytics and intelligence skills, in order to be able to analyze the mountains of big data that the online business environment and Internet of Things produce. (4) All business majors need to be able to work with specialists and system designers who build and implement information systems. This is necessary to ensure that the systems that are built actually service business purposes and provide the information and understanding required by managers and employees. In addition, students need to (5) understand how information systems can be used to meet business requirements for reporting to government regulators and the public and how information systems affect the ethical issues in their fields. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 1-4: What information systems skills and knowledge are essential for business careers?

100) What types of jobs are not likely to be outsourced and why? Answer: Jobs involved with the creation of innovative new products, services, and systems are rarely outsourced either domestically or globally. The advantage of low-wage countries is their low wages and ready availability of technical talent, not their keen sense of new products, services, and technologies for other countries' markets. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 1-4: What information systems skills and knowledge are essential for business careers?

Essentials of MIS, 14e (Laudon/Laudon) Chapter 2 Global E-Business and Collaboration 1) Suppliers, customers, invoices and payments, products and services, and are the five basic components with which businesses must deal. A) the environment B) manufacturing and production C) sales and marketing D) employees E) technology Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 2) Producing a bill of materials is a responsibility of the function. A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing E) technology Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 3) Identifying potential customers for the businesses' products or services is an activity associated with the function. A) finance and accounting B) human resources C) manufacturing and production D) technology E) sales and marketing Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems?

4) Which of the following is an interorganizational business process? A) Hiring an employee B) Identifying a customer C) Creating financial statements D) Ordering raw materials E) Checking product quality Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 2-1: What major features of a business are important for understanding the role of information systems? 5) Employees that assist with administrative work at all levels of the firm are called: A) data workers. B) knowledge workers. C) operational management. D) service workers. E) senior managers. Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 6) The three principal levels of hierarchies within a business organization are: A) senior management, knowledge workers, and service workers. B) senior management, middle management, and operational management. C) senior management, data workers, and operational management. D) senior management, operational management, and workers. E) senior management, operational management, and data workers. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 7) Key forces in a business' immediate environment include: A) regulations. B) technological innovations. C) economic conditions. D) politic conditions. E) global events. Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 29 Copyright © 2021 Pearson Education, Inc.

8) Engineers and scientists are examples of: A) senior management. B) production workers. C) knowledge workers. D) middle management. E) operational management. Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 9) Which of the following is an example of a key force in a firm's broader, less immediate environment? A) Competitors B) Regulations C) Suppliers D) Socioeconomic trends E) Customers Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 10) Which of the following is not a true statement with respect to business processes? A) Every business can be seen as a collection of business processes. B) Analyzing business processes can enable you to achieve a clear understanding of how a business actually works. C) The efficiency of a business firm is not related to its business processes. D) Information systems can automate many steps in business processes that were formerly performed manually. E) A business process may involve a unique way in which work, information, and knowledge are coordinated within an organization. Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 2-1: What major features of a business are important for understanding the role of information systems? 11) Business organizations are hierarchies consisting of five principal levels. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 30 Copyright © 2021 Pearson Education, Inc.

12) Operational-level manufacturing systems provide transaction-level information that enable monitoring of the daily activities of a business. Answer: TRUE Difficulty: Moderate AACSB: Analytical Thinking LO: 2-1: What major features of a business are important for understanding the role of information systems? 13) Business processes that impede organizational responsiveness are a source of competitive strength for a company. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 14) Senior management is responsible for ensuring the financial performance of the firm. Answer: TRUE Difficulty: Moderate AACSB: Analytical Thinking LO: 2-1: What major features of a business are important for understanding the role of information systems? 15) A business is a formal organization created to sell services or products at a profit. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 16) Every business process is tied to one specific functional area. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems? 17) The efficiency of a business firm depends to a large extent on how well its internal and interorganizational business processes are designed and coordinated. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 2-1: What major features of a business are important for understanding the role of information systems?

18) What is the connection between organizations, information systems, and business processes? Answer: Business processes are how work is actually performed, step by step, in an organization. An organization can be viewed as a collection of business processes. Information systems are used to help the organization execute its business processes. In some cases, an information system might hinder a business process, making it more complex than necessary, or it might greatly improve a business process, moving essential information seamlessly between parts of the organization and different business processes. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-1: What major features of a business are important for understanding the role of information systems? 19) Define and give an example of a cross-functional business process within a firm. Answer: Cross-functional processes are those that require input, cooperation, or coordination between the major business functions in an organization. For instance, when a salesman takes an order, the major business functions of planning, production, inventory control, shipping, accounting, and customer relations will all be involved before the order is completed. What at first appears to be a simple process, fulfilling an order, turns out to be a very complicated series of business processes that require the close coordination of major functional groups in a firm. Difficulty: Easy AACSB: Analytical Thinking; Written and Oral Communication LO: 2-1: What major features of a business are important for understanding the role of information systems? 20) Why do businesses invest in information systems? Answer: Businesses invest in information systems as a way to cope with and manage their internal production functions and cope with the demands of key actors in their environments. Specifically, firms invest in information systems to achieve operational excellence (productivity, efficiency, agility); to develop new products and services; to attain customer intimacy and service (continuous marketing, sales, and service; customization and personalization); to improve decision making (accuracy and speed); to achieve competitive advantage; and to ensure survival. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 2-1: What major features of a business are important for understanding the role of information systems?

21) A(n) performs and records the daily activities of a firm necessary to conduct business. A) executive support system B) management-level system C) decision support system D) transaction processing system E) business intelligence system Answer: D Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 22) Which type of system would you use to change a production schedule if a key supplier was late in delivering goods? A) ESS B) CRM system C) MIS D) DSS E) SCM system Answer: E Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 23) A human resources system that summarizes the total moving, house-hunting, and home financing costs for employees in all company divisions is an example of which of the following? A) KMS B) TPS C) ESS D) MIS E) CRM system Answer: D Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

24) The term management information systems refers to a specific category of information systems serving: A) integrated data processing throughout the firm. B) transaction process reporting. C) senior management. D) middle management functions. E) knowledge workers. Answer: D Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 25) Which of the following systems is designed to summarize and report on the company's basic operations? A) KMS B) DSS C) ESS D) TPS E) MIS Answer: E Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 26) Which of the following systems supports making decisions that are unique, rapidly changing, and not easily specified in advance? A) MIS B) TPS C) ESS D) DSS E) KWM Answer: D Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

27) Which of the following systems would you use to determine the five suppliers with the worst record in delivering goods on time? A) ESS B) TPS C) MIS D) DSS E) CRM Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 28) Which of the following systems is especially suited to situations in which the procedure for arriving at a solution may not be fully predefined in advance? A) MIS B) TPS C) DSS D) KMS E) CRM Answer: C Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 29) Which of the following systems would you use to forecast the return on investment if you used new suppliers with better delivery track records? A) ESS B) TPS C) MIS D) DSS E) CRM Answer: D Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

30) An ESS is an information system that supports the: A) long-range planning activities of senior management. B) knowledge and data workers in an organization. C) decision-making and administrative activities of middle managers. D) day-to-day processes of production. E) management of customer relationships. Answer: A Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 31) Which of the following systems would you use to determine which trends in your supplier's industry will affect your firm the most during the next five years? A) ESS B) TPS C) MIS D) DSS E) KWM Answer: A Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 32) Which of the following systems is designed to support organization-wide process coordination and integration? A) DSS B) MIS C) CRM D) Enterprise applications E) ESS Answer: D Difficulty: Easy AACSB: Application of Knowledge; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

33) A(n) collects data from various key business processes and stores the data in a single comprehensive data repository, usable by many parts of the business. A) TPS B) DSS C) automatic reporting system D) MIS E) enterprise system Answer: E Difficulty: Moderate AACSB: Application of Knowledge; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 34) What is the most important benefit of an enterprise application? A) Enabling speed of communicating B) Enabling business functions and departments to share information C) Enabling a company to work collaboratively with customers and suppliers D) Enabling cost-effective, e-business processes E) Enabling managers to make better decisions Answer: B Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 35) systems integrate and share information from suppliers, manufacturers, distributors, and logistics companies. A) Collaborative distribution B) Supply chain management C) Reverse logistics D) Enterprise planning E) Digital dashboard Answer: B Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

36) A(n) provides information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. A) TPS B) MIS C) ESS D) CPS E) CRM system Answer: E Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 37) Which of the following can typically access a company's intranet? A) The general public B) The firm's employees C) The firm's customers D) The firm's suppliers E) The firm's outside contractors Answer: B Difficulty: Moderate AACSB: Application of Knowledge; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 38) You manage the Information Systems department at a small startup Internet advertising company. You need to set up an inexpensive system that allows customers to see real-time statistics, such as views and click-throughs, about their current display ads. Which type of system will most efficiently provide a solution? A) CRM B) Enterprise system C) Extranet D) Intranet E) KWM Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

39) Which of the following refers to the purchase or sale of goods and services over the Internet? A) E-commerce B) E-business C) CRM D) MIS E) SCM Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 40) The use of digital technology and the Internet to execute the major business processes in the enterprise is called: A) e-commerce. B) e-business. C) enterprise applications. D) MIS. E) KWM. Answer: B Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 41) You work for a highly successful advertising company that is about to expand nationally. Of utmost importance will be finding a way to store and disseminate its clients' frequently updated branding and style guides throughout the organization. The guides include multiple image files and text documents. What system will best serve these needs? A) A wiki B) An extranet with KMS capabilities C) A TPS with KMS capabilities D) A telepresence system E) A virtual world Answer: B Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

42) You have been hired by Inspiration Inc. to help improve its financial performance. Inspiration Inc. is a business communications consulting firm that services many clients in different industries throughout the world. The firm provides customized written recommendations about how to best use a client's existing resources to improve the client's internal communications. The company has approximately 100 consultants, all of whom are located in its central headquarters in Chicago. Which of the following systems would you recommend to improve Inspiration Inc.'s business processes and improve its financial performance? A) Extranet, to enable quick collaboration via the Internet, minimize the time spent communicating with the client, and minimize the amount of paperwork needed B) CRM, to maintain easily accessible customer records to minimize the time spent looking for client data C) KMS, to minimize redundant work on similar clients D) Video conferencing system, to improve collaboration E) MIS, to produce reports on the firm's operations Answer: A Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 43) Which of the following types of systems could be used to enable different firms to work collaboratively on a product? A) Intranet B) Extranet C) KMS D) CRM E) DSS Answer: B Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 44) SCM systems are considered to be a(n) because they automate the flow of information across company boundaries. A) KMS B) enterprise system C) MIS D) interorganizational system E) cross-functional system Answer: D Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 40 Copyright © 2021 Pearson Education, Inc.

45) The principal purpose of an MIS is to answer routine questions and track the flow of transactions through an organization. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 46) A TPS helps managers monitor the firm's relations with the external environment. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 47) A payroll system is a typical example of an MIS. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 48) A TPS typically uses data supplied by an MIS. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 49) An MIS generally is not flexible and has little analytical capability. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 50) Most MIS's use sophisticated mathematical models or statistical techniques. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

51) A DSS often uses information from external sources. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 52) An ESS is designed to serve the middle management of the organization. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 53) An ESS is designed to incorporate data about external events, but it also draws summarized information from internal MIS and DSS. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 54) An ESS is designed primarily to solve specific problems. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 55) Information supplied by an enterprise system is structured around cross-functional business processes. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 56) SCM systems are more internally oriented than enterprise systems. Answer: FALSE Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

57) Enterprise systems do not utilize order transaction data. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 58) A KMS and a CRM system are both types of enterprise applications. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge; Information Technology LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 59) Identify the different types of systems used for the different levels of management in a business. Answer: The types of information systems used for different levels of management are transaction processing systems (TPS), management information systems (MIS), decision-support systems (DSS), and executive support systems (ESS). TPS, such as payroll or order processing, track the flow of the daily routine transactions that are necessary to conduct business. They are used by operational managers to manage day-to-day operations. MIS summarize and report on the company's basic operations using data supplied by TPS. They provide middle managers with reports on the organization's current performance and are not highly analytical. DSS also support middle management decisions when these decisions are unique, rapidly changing, and not specified easily in advance. They use advanced analytical models and data analysis capabilities and often draw on information from external as well as internal sources. ESS support senior management by providing data of greatest importance to senior management decision makers. ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems. ESS present graphs and data from many sources through an interface that is easy for senior managers to use, often a portal. Difficulty: Easy AACSB: Information Technology; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

60) Eternal Friend, a family-owned manufacturer of pet caskets, has grown exponentially over the last few years. However, they are having difficulty in preparing for future growth. The only information system used at Eternal Friend is an antiquated accounting system. The company has one manufacturing plant located in Arkansas, and three warehouses, in Arkansas, Delaware, and California. The Eternal Friend sales force is national, and Eternal Friend purchases most of its raw materials from a single overseas supplier. You have been hired to recommend the information systems Eternal Friend should implement in order to maintain their competitive edge. However, there is not enough money for a full scale, cross-functional enterprise application, and you will need to limit the first step to a single management level. What will you choose, and why? Answer: A TPS, as this is the basis of business systems and used to keep day-to-day operations running smoothly. A TPS will help to keep production costs low while maintaining quality, and can be used for communicating with other possible vendors. The TPS could later be used to feed MIS and other higher-level systems when they are installed. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 61) Describe at least two benefits of using enterprise systems. Answer: Enterprise systems integrate the firm's key business processes in sales, production, finance, logistics, and human resources into a single software system so that information can flow throughout the organization, improving coordination, efficiency, and decision making. These systems help create a more uniform organization in which everyone uses similar processes and information and measures their work in terms of organization-wide performance standards. The coordination of the firm's key business processes allows the firm to respond more rapidly to customer demands. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 62) How can a good CRM system increase profits for a company? Answer: Customer relationship management uses information systems to coordinate all of the business processes surrounding the firm's interactions with its customers. The systems consolidate customer information from multiple sources—phone, email, wireless devices, traditional sales and marketing systems, and the web—so that the firm can obtain a unified view of a customer. Understanding the customer allows a firm to increase the effectiveness of their marketing campaigns. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

63) The automotive tire supply company you work for, Tires4U, has noticed that one of its brands of tires is not selling nearly as well as anticipated at most of its locations. For each of the four main types of information systems found in a business, identify a query that might help understand this development. Of the four types of systems, which do you think will be the most helpful and why? Answer: You might query operational level TPS to make sure that the product is actually getting to the stores and being restocked. You could query MIS to see average sales levels according to geography, location, and other factors to see if there are any specific factors affecting the sales. You might query ESS to see if the same tires are being sold by competitors and what these prices are. You might use DSS to see what factors could increase sales. Assuming that the tires are being properly stocked at the stores, the most important system to query is the MIS for summaries of sales records to help pinpoint any other factors, sales and marketing to assure that promotion and pricing is accurate. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 64) What is a digital dashboard, and why are they becoming an increasingly popular tool? Answer: A digital dashboard displays graphical information and charts of key performance indicators on a single screen. They are becoming increasingly popular because they provide comprehensive and accurate information for decision making that helps managers quickly spot areas that need attention. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 65) How have the technologies associated with e-business impacted government? Answer: Governments on all levels are using Internet technology to deliver information and services to citizens, employees, and businesses with which they work. The term e-government refers to the application of the Internet and networking technologies to enable government and public sector agencies' relationships with citizens, businesses, and other arms of government digitally. In addition to improving delivery of government services, e-government can make government operations more efficient and empower citizens by giving them easier access to information and the ability to network digitally with other citizens. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 2-2: How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance?

66) From your reading of the chapter-opening case study discussing Sharp Corporation's use of enterprise social networking, which of the following statements best expresses Sharp's experience? A) Sharp's primary motivation was to enhance its security. B) Sharp's primary motivation was to change its organizational culture. C) Efforts to implement Yammer were met with significant resistance from employees. D) Yammer provided Sharp with a single entry point to all the information and tools employees need for their jobs. E) Sharp is primarily using Yammer to create an external network to link suppliers, customers, and others outside the organization. Answer: B Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 67) Interaction jobs are those jobs which: A) require close coordination and collaboration. B) involve knowledge that can't be put into an information system. C) are performed typically by operational-level employees. D) require intense levels of interaction with clients. E) require an emphasis on innovation. Answer: A Difficulty: Moderate AACSB: Application of Knowledge; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 68) In a business environment, the focus of collaboration is to: A) accomplish the task at hand. B) provide a sense of community. C) foster better communication. D) prevent miscommunication. E) increase a firm's profit margin. Answer: A Difficulty: Moderate AACSB: Application of Knowledge; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

69) Which of the following statements is not true about collaboration in a business setting? A) Collaboration may be a short-lived activity, lasting just a few minutes. B) Collaboration is a many-to-many activity as opposed to a one-to-one or one-to-many activity. C) Meaningful collaboration requires a supportive business firm culture and the right, decentralized structure. D) The evidence of the business benefits of collaboration is largely anecdotal. E) Special types of information systems are available to support collaboration. Answer: B Difficulty: Challenging AACSB: Application of Knowledge; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 70) Each of the following is required for successful collaboration, except: A) open culture. B) strong hierarchy. C) decentralized structure. D) breadth of collaboration. E) appropriate collaboration technology. Answer: B Difficulty: Challenging AACSB: Analytical Thinking; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 71) A wiki is a type of collaborative: A) social network. B) blog. C) virtual world. D) website. E) MIS. Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

72) Second Life is an example of a(n): A) virtual world. B) wiki. C) social network. D) mind mapping tool. E) extranet. Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 73) The goal of social commerce applications is to: A) connect through personal and business profiles. B) use social media to connect with customers. C) share opinions about purchasing products or services. D) upload and share business documents. E) harness collective knowledge to generate new ideas. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 74) What analytical framework discussed in the chapter helps understand and evaluate the benefits and uses of collaboration tools? A) Cost/use matrix B) Task/time matrix C) Space/cost matrix D) Time/space matrix E) Time/cost matrix Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

75) Adobe Connect is an example of which of the following types of collaboration tools? A) Blog B) Team room C) Online meeting D) Group calendar E) Wiki Answer: C Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 76) Which of the following Google tools allows people to engage in group video chat? A) Google Drive B) Google Docs C) Google Sites D) Google Circles E) Google Hangouts Answer: E Difficulty: Moderate AACSB: Application of Knowledge; Information Technology LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 77) Instant messaging, videoconferencing, and shared screens are all examples of collaboration tools. A) bimodal B) co-located C) synchronous D) spontaneous E) asynchronous Answer: C Difficulty: Moderate AACSB: Information Technology; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

78) technology allows a videoconference participant to give the appearance of being present at a location other than his or her true physical location. A) Telepresence B) Virtual reality C) Screen sharing D) Mind mapping E) Virtual world Answer: A Difficulty: Moderate AACSB: Information Technology; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 79) As discussed in the chapter case, what is the primary reason why Spacebook failed? A) It was too expensive to implement. B) It was designed and developed without taking the organization's culture into consideration. C) It did not include enough collaboration tools. D) Its user interface was confusing. E) It was riddled with technical issues. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 80) systems help organizations manage both structured, semistructured, and unstructured types of information. A) Digital asset management B) Knowledge network C) Enterprise content management D) Knowledge work E) Learning management Answer: C Difficulty: Moderate AACSB: Information Technology LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

81) In order to search for and retrieve knowledge objects in an enterprise content management system, the objects themselves must be: A) linked to their original sources. B) organized into relevant directories. C) tagged with a classification. D) indexed. E) associated with an in-house expert. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 82) Nearly all of the research on the business benefits of collaboration is anecdotal. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 83) The primary goal of social business is to deepen interactions with employees and customers. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge; Interpersonal Relations and Teamwork LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 84) You are consulting on software purchases for a translation agency whose headquarters is in New Jersey, but which works with translators located globally. Headquarters needs to share documents with groups of translators working on the same documents, who also need to communicate with each other, in real time if possible, as many people are working in different time zones. (1) What is your process for determining the most appropriate collaboration software? (2) In this particular case, what features will you be looking for? Answer: (1) The first step is to determine what the challenges facing the company are and to place these needs in the time/space matrix—does collaboration need to be synchronous or asynchronous; does it need to be remote or colocated? Once the firm's location in the matrix is determined, you can look for vendor products that fill these needs and analyze the products' cost, features, benefits, risks, training, and implementation issues. A selection of the top contenders can be presented to the company. (2) In this case, we will be looking for products that allow remote interactions that are both synchronous and asynchronous. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

85) Identify and describe at least four business benefits of collaboration. Which do you feel is the most important and why? Answer: Business benefits from collaboration are (1) productivity; (2) quality; (3) innovation; (4) customer service; and (5) financial performance. Collaboration helps productivity because people working together on a task can complete the task more quickly. It helps quality because people working together will be more able to correct each other's mistakes. It helps innovation because people working in groups come up with more ideas than those working in isolation. It helps customer service because teams can solve customer complaints more quickly together rather than working in isolation. And as a result of all of these benefits, collaboration helps finance, because collaborative firms have superior sales, sales growth, and financial performance. Student evaluations will vary: for example, the most important of the benefits might be: innovation, because new products, services, and means of production are at the heart of being able to outperform your competitors. Difficulty: Moderate AACSB: Analytical Thinking; Interpersonal Relations and Teamwork; Written and Oral Communication LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 86) Why are "conversations" relevant to social business? Answer: Customers, suppliers, employees, managers, and even oversight agencies continually have conversations about firms, often without the knowledge of the firm or its key actors (employees and managers). Supporters of social business assert that if firms could tune into these conversations, they will strengthen their bonds with consumers, suppliers, and employees, increasing their emotional involvement in the firm. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

87) How does a firm with collaborative business culture and business processes differ from a "command-and-control" firm? Answer: In command-and-control organizations, the top leaders determine all the really important matters and then order lower-level employees to execute senior management plans. The job of middle management is to pass messages back and forth up and down the hierarchy. Command-and-control firms require lower-level employees to carry out orders without asking too many questions, with no responsibility to improve processes, and with no rewards for teamwork or team performance. If workgroups need help from another work group, that is something for the bosses to figure out. Employees never communicate horizontally, always vertically, so management can control the process. A collaborative business culture and business processes are very different. Senior managers are responsible for achieving results but rely on teams of employees to achieve and implement the results. Policies, products, designs, processes, and systems are much more dependent on teams at all levels of the organization to devise, to create, and to build. Teams are rewarded for their performance, and individuals are rewarded for their performance in a team. The function of middle managers is to build the teams, coordinate their work, and monitor their performance. The business culture and business processes are more social. In a collaborative culture, senior management establishes collaboration and teamwork as vital to the organization, and it actually implements collaboration for the senior ranks of the business as well. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 88) How do enterprise content management (ECM) systems help organizations manage knowledge? Answer: Enterprise content management (ECM) systems help organizations manage structured, semistructured, and unstructured types of information. They have capabilities for knowledge capture, storage, retrieval, distribution, and preservation. Such systems include corporate repositories of documents, reports, presentations, and best practices as well as capabilities for collecting and organizing semi-structured knowledge such as email. Major ECM systems also enable users to access external sources of information, such as news feeds and research, and to communicate by email, chat/instant messaging, discussion groups, and videoconferencing. They are starting to incorporate blogs, wikis, and other enterprise social networking tools. A key problem in managing knowledge is the creation of an appropriate classification scheme to organize information into meaningful categories. Once the categories for classifying knowledge have been created, each knowledge object needs to be tagged, or classified, so that it can be easily retrieved. ECM systems have capabilities for tagging, interfacing with corporate data repositories where the documents are stored, and creating an enterprise portal environment for employees to use when searching for corporate knowledge. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use?

89) Which of the following is most likely to have direct responsibility for ensuring that his or her company complies with existing data privacy laws? A) CPO B) CKO C) CIO D) CIP E) CSO Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 90) The principal liaison between the information systems groups and the rest of the organization is a(n): A) programmer. B) information systems manager. C) systems analyst. D) CIO. E) CSO. Answer: C Difficulty: Easy AACSB: Information Technology LO: 2-4: What is the role of the information systems function in a business? 91) A is a senior manager who oversees the use of IT in the firm. A) CEO B) CFO C) CIO D) CIT E) CPO Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 92) Development and support services for a firm's business systems are provided by: A) IT educational services. B) IT management services. C) data management services. D) IT standards services. E) application software services. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 2-4: What is the role of the information systems function in a business?

93) Policies that determine which information technology will be used, when, and how, are provided by: A) IT educational services. B) IT management services. C) application software services. D) IT standards services. E) data management services. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 2-4: What is the role of the information systems function in a business? 94) Which of the following would a CSO not be responsible for? A) Educating and training users about security B) Keeping management aware of security threats C) Maintaining tools chosen to implement security D) Providing physical security E) Enforcing the firm's information security policy Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 95) Which of the following would be primarily responsible for enterprise-wide governance and usage of information to maximize the value of an organization's data? A) CKO B) CPO C) End users D) CDO E) CSO Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 96) Which of the following is not a service typically provided by an information systems department? A) Telecommunications services B) Physical facilities management services C) Data management services D) Project management services E) Human resources services Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 55 Copyright © 2021 Pearson Education, Inc.

97) Systems analysts are the principal liaisons between the information systems group and the rest of the organization. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 2-4: What is the role of the information systems function in a business? 98) End users are playing an increasing role in the design and development of information systems. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 2-4: What is the role of the information systems function in a business? 99) List and describe the services that an information systems department typically provides. Answer: An information systems department typically provides the following services: Computing services, which connect employees, customers, and suppliers into a coherent digital environment, including large mainframes, desktop and laptop computers, and mobile handheld devices; telecommunications services, which provide data, voice, and video connectivity to employees, customers, and suppliers; data management services, which store and manage corporate data and provide capabilities for analyzing the data; application software services, which provide development and support services for the firm's business systems; IT management services, which plan and develop the infrastructure, coordinate with the business units for IT services, manage accounting for the IT expenditure, and provide project management services; IT standards services, which provide the firm and its business units with policies that determine not only which information technology will be used but when and how it is used; IT educational services, which provide training in system use to employees and IT specialists; and IT research and development services, which provide the firm with research on potential future information systems projects and investments that could help the firm differentiate itself in the marketplace. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 2-4: What is the role of the information systems function in a business? 100) The role of the information systems department in a company is solely to support the needs of other groups as determined by senior managers. Explain why you agree or disagree with this statement. Answer: Answers will vary but should include an understanding of the role this department plays in creating new products and services and coordinating organizational change. An example answer is: I disagree with this statement. While a major function of the information systems department is to install, run, and manage the technology infrastructure, another role that it should play is to inform the company about new technologies, suggest capabilities the firm could have based on new or existing technologies, and helping the firm manage business processes and change. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 2-4: What is the role of the information systems function in a business? 56 Copyright © 2021 Pearson Education, Inc.

Essentials of MIS, 14e (Laudon/Laudon) Chapter 3 Achieving Competitive Advantage with Information Systems 1) Which of the following is not one of the competitive forces in an industry's environment in Porter's model? A) Suppliers B) New market entrants C) Substitute products D) Customers E) Technology Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 2) A manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace forces? A) Product differentiation B) Traditional competitors C) Low number of suppliers D) New market entrants E) Substitute products Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 3) Which of the following industries has the lowest barrier to entry? A) Automotive B) Computer chip C) Small retailer D) Airline E) Solar energy Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

4) All of the following could be considered substitute products for industrial electricity generation except: A) solar. B) wind. C) coal. D) hydropower. E) ethanol. Answer: E Difficulty: Easy AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 5) Which of the following can force a business and its competitors to compete on price alone? A) High switching costs B) Poor process efficiency C) Demand control D) Transparent marketplace with little product differentiation E) Multiple competing suppliers Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 6) A firm can exercise greater control over its suppliers in terms of price, quality, and delivery schedules by having: A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. E) only a single supplier. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

7) Which of the following is not one of the basic strategies a company can employ to deal with competitive forces? A) Strengthen customer and supplier intimacy B) Focus on market niche C) Differentiate products D) Compete on employee loyalty E) Low-cost leadership Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 8) Walmart's continuous inventory replenishment system allows it to do all of the following except: A) provide mass customization. B) transmit orders to restock directly to its suppliers. C) keep costs low. D) better meet customer demands. E) fine-tune merchandise availability. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 9) Which of the following illustrates the use of information systems to achieve product differentiation? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) A hotel chain's use of information systems to analyze detailed data on guests to determine each guest's profitability Answer: B Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 59 Copyright © 2021 Pearson Education, Inc.

10) Which of the following illustrates the use of information systems to strengthen customer and supplier intimacy? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to their production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability Answer: C Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 11) Which of the following illustrates the use of information systems to focus on market niche? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability Answer: A Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

12) When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a strategy. A) product differentiation B) market niche C) mass customization D) process efficiency E) market transparency Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 13) is the ability to offer individually tailored products or services using the same production resources as mass production. A) Mass customization B) Size customization C) Personalization D) Demand customization E) CAD Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 14) An information system can enable a company to focus on a market niche through: A) complex trend forecasting. B) tailoring products to the client. C) intensive product trend analysis. D) intensive customer data analysis. E) tightening linkages with suppliers. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

15) Hilton Hotels' use of customer information software to identify the most profitable customers to direct its services to is an example of using information systems to: A) strengthen customer intimacy. B) differentiate their service. C) focus on market niche. D) increase efficiency. E) provide services at a lower price than its competitors. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 16) As discussed in the chapter opening case, which of the following statements about Starbucks is not true? A) Starbucks is focusing on improving the in-store customer experience through information technology. B) Starbucks' business model is based on a product differentiation strategy. C) Customers in the United States who wish to use Starbucks' in-store Wi-Fi network must first supply an email address. D) Starbucks believes that online retailing of Starbucks branded merchandise will contribute significantly to its future profits. E) Starbucks' mobile app helps it to target products to customers more effectively. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 17) To what competitive force did the printed encyclopedia industry succumb? A) Positioning and rivalry among competitors B) Low cost of entry C) Substitute products or services D) Increased bargaining power of customers E) Increased bargaining power of suppliers Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

18) Internet technology: A) makes it easy for rivals to compete on price alone. B) imposes a significant cost of entry, due to infrastructure requirements. C) increases the difference between competitors because of the wide availability of information. D) makes it easy to sustain operational advantages. E) has lessened competitive rivalries. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 19) The Internet raises the bargaining power of customers most effectively by: A) creating new opportunities for building loyal customer bases. B) making more products available. C) making information available to everyone. D) lowering transaction costs. E) reducing barriers to entry. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 20) The value chain model: A) categorizes five related advantages for adding value to a firm's products or services. B) sees the supply chain as the primary activity for adding value. C) categorizes four basic strategies a firm can use to enhance its value chain. D) helps a firm identify points at which information technology can most effectively enhance its competitive position. E) focuses primarily on collaboration with suppliers. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

21) All of the following are considered primary activities of a firm except: A) inbound logistics. B) sales and marketing. C) procurement. D) service. E) outbound logistics. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 22) The support activities of a firm include: A) inbound logistics, technology, outbound logistics, sales and marketing, and service. B) inbound logistics, organization infrastructure, outbound logistics, technology, and procurement. C) organization infrastructure, human resources, sales and marketing, and technology. D) organization infrastructure, human resources, technology, and procurement. E) sales and marketing, procurement, human resources, and technology. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 23) Benchmarking: A) compares the efficiency and effectiveness of your business processes against strict standards. B) allows industry participants to develop industry-wide standards. C) is used to measure the speed and responsiveness of information technology. D) synchronizes the business processes of customers, suppliers, and trading partners. E) coordinates the value chains of independent firms to enable them to collectively produce a product or service. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

24) The most successful solutions or methods for achieving a business objective are called: A) core processes. B) best processes. C) benchmarks. D) best practices. E) value webs. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 25) Which of the following is not a true statement about value webs? A) Value webs involve a collection of independent firms that use information technology to coordinate their value chains. B) Value webs are more customer-driven than traditional value chains. C) Value webs operate in a less linear fashion than traditional value chains. D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand. E) Value webs involve highly synchronized industry value chains. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 26) A is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively. A) value chain B) business network C) value web D) consortia E) supply chain Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

27) How are information systems used at the industry level to achieve strategic advantage? A) By building industry-wide, IT-supported consortia, symposia, and communications networks B) By raising the bargaining power of suppliers C) By encouraging the entry of new competitors D) By enforcing standards that reduce the differences between competitors E) By enabling companies to develop customer intimacy Answer: A Difficulty: Moderate AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 28) When the output of some units can be used as inputs to other units, or if two organizations pool markets and expertise that result in lower costs and generate profits, are created. A) value webs B) value chains C) synergies D) core competencies E) benchmarks Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 29) An information system can enhance core competencies by: A) providing better reporting facilities. B) creating educational opportunities for management. C) allowing operational employees to interact with management. D) encouraging the sharing of knowledge across business units. E) synchronizing the value chains of business partners with an industry. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

30) The idea that the more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output, is referred to as: A) the point of no return. B) the law of diminishing returns. C) supply and demand. D) inelasticity. E) virtual economics. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 31) Which of the following statements about network economics is not true? A) eBay is an example of a business model that is based on the principle of network economics. B) The law of diminishing returns does not always apply to every situation. C) From a network economics perspective, the value of a community of people grows as the number of participants in the community increases. D) Information technology can be strategically useful from a network economics perspective. E) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 32) In network economics, the value of a commercial software vendor's software products: A) increases as more people use them. B) decreases as more people use them. C) increases due to higher marginal gain in output. D) decreases according to the law of diminishing returns. E) is unrelated to the number of people that use them. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

33) A virtual company: A) uses networks to link people, assets, and ideas enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. B) uses Internet technology to maintain a virtual storefront. C) uses Internet technology to maintain a networked community of users. D) provides entirely Internet-driven services, or virtual products. E) is an example of the law of diminishing returns. Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 34) The emergence of software as a web service has acted as a disruptive technology for: A) traditional key-word search engines. B) telecommunications providers. C) PC manufacturers. D) local Internet service providers. E) traditional boxed software companies. Answer: E Difficulty: Easy AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 35) Which of the following is not an advantage for new companies entering the marketplace? A) They can implement new systems and equipment. B) They are not locked into an existing brand image. C) They are more highly motivated. D) They can establish new relationships with suppliers. E) They can often hire younger, less expensive workers. Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

36) All of the following have been disruptive technologies except: A) the PageRank algorithm. B) digital photography. C) minicomputers. D) the iPod. E) the automobile. Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 37) A firm can be said to have competitive advantage when it uses commonly available resources more efficiently. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 38) The power of suppliers is one of the competitive forces that affect an organization's ability to compete. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 39) The power of customers is diminished in a transparent marketplace. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 40) Studies show that more than 75% of a business firm's profits can be explained by alignment of IT with business. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 69 Copyright © 2021 Pearson Education, Inc.

41) Low-cost leadership is one of the four basic competitive strategies. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 42) Strong linkages to customers and suppliers increase switching costs. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 43) The effect of the Internet has been to increase a company's bargaining power vis-à-vis its customers. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 44) The Internet has made it more difficult for companies to sustain operational advantages. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 45) In the value chain model, primary activities are those that are most directly related to the production and distribution of the firm's products and services. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

46) The value chain model classifies all company activities as either primary or support. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 47) When the output of some units can be used as inputs to other units, synergies develop, which can lower cost and generate profits. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 48) The law of diminishing returns does not apply to traditional products. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 49) The more people that use Microsoft Office software and related products, the lower its value. Answer: FALSE Difficulty: Moderate AACSB: Analytical Thinking LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 50) The inventors of a disruptive technology always benefit the most from the technology; and it is rare that fast followers catch up quickly. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

51) A value web is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service for a market. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 52) The activities that measure the performance of your business processes against strict standards are called best practices. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 53) Value chain analysis is useful at the business level to highlight specific activities in a business where information systems are most likely to have a strategic impact. Discuss this model, identify the activities, and describe how the model can be applied to the concept of information technology. Answer: The value chain model highlights activities in a business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact. This model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position. The value chain model views the firm as a series or chain of basic activities that add a margin of value to a firm's products or services. These activities can be categorized as either primary activities or support activities. Primary activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer, including inbound logistics, operations, outbound logistics, sales and marketing, and service. Support activities make the delivery of the primary activities possible and consist of organization infrastructure (administration and management), human resources, technology (improving products and the production process), and procurement. In value chain analysis, you ask at each stage of the value chain, "How can we use information systems to improve operational efficiency and improve customer and supplier intimacy?" The model allows you to critically examine how you perform value-adding activities at each stage and how the business processes might be improved. You can examine how information systems can be used to improve the relationship with customers and with suppliers who are outside the firm value chain, but which belong to the firm's extended value chain, where they are critical to the firm's success. SCM systems that coordinate the flow of resources into the firm, and CRM systems that coordinate sales and support employees with customers are two of the most common systems that result from a business value chain analysis. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 72 Copyright © 2021 Pearson Education, Inc.

54) Select a popular product or company that you are familiar with, such as Apple's iPad. Apply Porter's competitive forces model to that product and/or company. Which of the four generic strategies is the company using? Answer: Student answers will vary. One example answer using Apple's iPad is: • Competitors to the iPad include the Microsoft Surface and many others, but few as widely known. • New market entrants: There is not a huge barrier to entry in this field; many other technology companies offer tablet computers. • Substitute products and services: Smartphones are a substitute product or service. • Customers: The iPad still has the highest brand recognition among consumers, diminishing the bargaining power of customers. However, this advantage has diminished as other similar products that are as well designed enter the marketplace. In terms of the iPad, Apple seems to be focused on product differentiation by creating a product with unique features and capabilities. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 55) Research has shown that the more successfully a firm can align its IT with its business goals, the more profitable it will be. What practical steps should a firm use in aligning IT with its goals? Answer: Steps to align IT with your organization's goals include: identifying your business strategy and goals and breaking these goals into concrete activities and processes; identifying how you measure progress toward these goals; determining how IT can help achieve these goals and improve business processes and activities; and measuring the actual performance of the business. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

56) You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies would you advise Smalltown Computer to take? Which ones will it have difficulty exercising? Answer: Smalltown Computer will have difficulty in low-cost leadership, because it cannot exert economies of scale or other efficiencies of large PC manufacturers. However, it could emphasize customer intimacy, through face-to-face interaction with customers. It could also emphasize product differentiation, in that it supplies a hands-on, local experience and more trustworthy, higher quality service. Because it builds computers to order, the firm could also focus on market niche, by specializing in certain types of custom computers. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 57) You are consulting with the owner of Better Bodies, a national chain of gyms. How could the use of information systems help them exert each of the four generic strategies in achieving competitive advantage? Answer: At a certain scale of business, Better Bodies could employ globalization to purchase less expensive gym equipment, in a low-cost leadership strategy. The firm could use computers to monitor and evaluate health and fitness of members and customize workouts, in product differentiation strategy. It could use information systems for sales and marketing data research in order to define a niche market that would bring greater profits. The firm could allow customers to review their health data and add additional information or view statistics to create customer intimacy. If the individual gyms are franchises, then a network could be used for franchisees to share data and research new sales tactics, etc. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 58) How is Internet technology useful from a network economics perspective? Give examples. Answer: In network economics, the cost of adding a participant to the network is negligible, while the gain in value is relatively much larger. The Internet itself is an example of a successful implementation of network economics—the more people participate, the more valuable and essential a commodity it is. If a company were to provide a service through the Internet such as a project management application, the costs to the company of adding another user are small (as the software infrastructure or application is already built), and the more users are signed up the more profit is made. Difficulty: Easy AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage?

59) Why has the Internet made competitive rivalry more intense? Answer: The Internet has made competitive rivalry more intense because Internet technology is based on universal standards that any company can use, making it easier for rivals to compete on price alone and for new competitors to enter the market. Because information is available to everyone, the Internet also raises the bargaining power of customers, who can quickly find the lowest-cost provider on the web, which may dampen profits. The Internet also widens the geographic market, increasing the number of competitors and reducing differences among competitors, and makes it more difficult to sustain operational advantages. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 60) Why are disruptive technologies "tricky"? Provide examples. Answer: Disruptive technologies can be tricky because firms that invent disruptive technologies as first movers do not always benefit if they lack the resources to exploit the technology or fail to see the opportunity. For example, the MITS Altair 8800 is widely regarded as the first PC, but its inventors did not take advantage of their first-mover status. Second movers, so-called fast followers such as IBM and Microsoft, reaped the rewards. Citibank's ATMs revolutionized retail banking, but other banks copied them. Now all banks use ATMs, and the benefits go mostly to the consumers. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 3-1: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 61) Final assembly of iPhones occurs primarily in which of the following countries? A) United States B) South Korea C) China D) Germany E) Japan Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally?

62) Which of the following technologies permits service calls to U.S. companies to be answered in India just as easily and inexpensively as if the help desk were in the United States? A) Cellular networks B) Internet telephony C) The World Wide Web D) Software as a web service E) TQM Answer: B Difficulty: Easy AACSB: Information Technology LO: 3-2: How do information systems help businesses compete globally? 63) The strategy concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. A) domestic exporter B) multinational C) franchise D) transnational E) virtual company Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally? 64) The strategy is characterized by heavy centralization of corporate activities in the home country of origin. A) domestic exporter B) multinational C) franchise D) transnational E) virtual company Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally? 65) In a system configuration, separate information systems are designed and managed by each foreign unit. A) duplicated B) centralized C) decentralized D) networked E) virtual Answer: C Difficulty: Moderate AACSB: Information Technology LO: 3-2: How do information systems help businesses compete globally? 76 Copyright © 2021 Pearson Education, Inc.

66) systems are those in which development occurs at the home base, but operations are handed over to autonomous units in foreign locations. A) Transnational B) Decentralized C) Duplicated D) Networked E) Virtual Answer: C Difficulty: Moderate AACSB: Information Technology LO: 3-2: How do information systems help businesses compete globally? 67) A firm that locates all systems development and operations at its headquarters is using a system configuration. A) unilateral B) centralized C) decentralized D) networked E) virtual Answer: B Difficulty: Moderate AACSB: Information Technology LO: 3-2: How do information systems help businesses compete globally? 68) typically develop a single information system, usually at the home base, and then replicate it around the world. A) Domestic exporters B) Multinational firms C) Franchisers D) Transnational firms E) Virtual companies Answer: C Difficulty: Moderate AACSB: Information Technology LO: 3-2: How do information systems help businesses compete globally? 69) Caterpillar Corporation is an example of which of the following? A) Domestic exporter B) Multinational C) Franchiser D) Transnational E) Virtual company Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally? 77 Copyright © 2021 Pearson Education, Inc.

70) Which of the following is pursuing a transnational strategy? A) Caterpillar Corporation B) Ford Motor Co. C) Intel Corporation D) Nestlé E) Starbucks Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally? 71) Franchisers are firms that have their product created, designed, financed, and initially produced in the home country but rely heavily on foreign personnel for further production, marketing, and human resources. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-2: How do information systems help businesses compete globally? 72) What are the four main ways of organizing businesses internationally, and what types of systems configurations do each of these types typically use? Answer: The four main ways of organizing business internationally are domestic exporters, multinational, franchising, and transnational. Domestic exporters tend to have highly centralized systems in which a single domestic systems development staff develops worldwide applications. Multinationals allow foreign units to devise their own systems solutions based on local needs with few, if any, applications in common with headquarters (the exceptions being financial reporting and some telecommunications applications). Franchisers typically develop a single system, usually at the home base, and then replicate it around the world. Each unit, no matter where it is located, has identical applications. Transnational firms use networked systems that span multiple countries, using powerful telecommunications networks and a shared management culture that crosses cultural barriers. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 3-2: How do information systems help businesses compete globally? 73) Customer definitions of the quality of a product include all of the following except: A) uniformity of the product. B) accuracy of the advertising with respect to the product. C) durability and safety of the product. D) ease of use of the product. E) customer support for the product. Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 78

74) Seeing quality as the responsibility of all people and functions in an organization is central to the concept of: A) Six Sigma. B) TQM. C) quality control. D) cycle time reduction. E) benchmarking. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 75) The reduction of errors to 3.4 defects per million opportunities is central to the concept of: A) Six Sigma. B) TQM. C) benchmarking. D) cycle time reduction. E) BPR. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 76) All of the following are ways to improve quality except: A) improving products and services based on customer demands. B) simplifying the production process. C) implementing a new information system. D) improving production precision. E) reducing cycle time. Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 3-3: How do information systems help businesses compete using quality and design? 77) Ford Motor Company used which of the following tools or technologies to create the most efficient design possible for an engine cylinder? A) Value chain B) CAD system C) Benchmarking D) Industry best practices E) Porter's competitive forces model Answer: B Difficulty: Moderate AACSB: Analytical Thinking; Information Technology LO: 3-3: How do information systems help businesses compete using quality and design?

78) Which of the following statements about cycle time is not true? A) Cycle time refers to the total elapsed time from the beginning of a process to its end. B) Shorter cycle times mean that problems are caught earlier in the process. C) Finding ways to reduce cycle time often means finding ways to simplify production steps. D) The fewer steps in a production process, the more likely that an error will occur. E) Information systems can help reduce cycle time. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 3-3: How do information systems help businesses compete using quality and design? 79) All of the following are psychological aspects of quality except: A) the conformity of the product to specifications. B) the company's knowledge of its products. C) the product's reputation. D) the courtesy of salespeople. E) the sensitivity of support staff. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 80) Which of the following statements about 3-D printing is not true? A) 3-D printing is also known as additive manufacturing. B) Unlike traditional techniques, 3-D printing results in some wasted material. C) 3-D printing can create objects from plastic, metal, or composite materials. D) CAD systems supply data for 3-D printing. E) 3-D printing is often used to fashion items for small production runs. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 81) Which of the following companies is identified in the chapter as using benchmarking to achieve an order-shipping accuracy of 99.9 percent? A) Ford Motor Co. B) L.L. Bean C) GE Aviation D) Nike E) 1-800-Flowers Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design?

82) Amazon used which of the following to reduce errors in order fulfillment? A) BPR B) 3-D printing C) TQM D) BPM E) Six Sigma Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 83) TQM derives from concepts developed by Japanese quality experts. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 84) One of the best ways to reduce quality problems is to increase cycle time. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 85) Benchmarks may be external industry standards, standards other companies set, internally developed standards, or some combination of these. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 86) Quality control is the sole goal of Six Sigma. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 3-3: How do information systems help businesses compete using quality and design? 87) You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. Define 3-D printing and explain how it might be relevant to this business? Answer: 3-D printing, also known as additive manufacturing, uses a machine called a 3-D printer to make solid objects, layer by layer, from specifications in a digital file. 3-D printing is often used for custom manufacturing and therefore might be useful for Smalltown Computer in building custom computers. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 3-3: How do information systems help businesses compete using quality and design? 81

88) Discuss the ways information systems can be used to improve quality. Answer: Information systems can help improve quality by reducing the number of steps and time taken to manufacture the product. There are fewer occasions for human error to be introduced the fewer and the simpler the steps in a process. Reducing the length of time taken in producing a product will also help limit mistakes, because shorter cycle times mean that problems are caught earlier, and that production tasks are easier to understand and perform. Information systems can also improve quality by providing analysis tools for measuring the success of procedures, establishing standards, and measuring performance against those standards (benchmarking). Information systems can play a key role in improving and automating design and production, as in the use of CAD. The ability of information systems to easily record and analyze customer data, as well as automate, customize, and improve customer service, also contributes to the overall quality of the product or service. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 3-3: How do information systems help businesses compete using quality and design? 89) How does the definition of quality differ from the customer and manufacturer perspectives? Answer: From the perspective of a manufacturer, quality signifies conformance to specifications or the absence of variation from those specifications. A customer definition of quality is much broader. First, customers are concerned with the quality of the physical product–its durability, safety, ease of use, and installation. Second, customers are concerned with the quality of service, by which they mean the accuracy and truthfulness of advertising, responsiveness to warranties, and ongoing product support. Finally, customer concepts of quality include psychological aspects: the company's knowledge of its products, the courtesy and sensitivity of sales and support staff, and the reputation of the product. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 3-3: How do information systems help businesses compete using quality and design? 90) Based on your reading of the chapter case, which of the following did Tommy Hilfiger implement to streamline its wholesale sales process? A) CAD B) BPR C) TQM D) Benchmarking E) Value chain analysis Answer: B Difficulty: Challenging AACSB: Analytical Thinking; Information Technology LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness?

91) Which of the following is the first step in BPM? A) Reduce cycle time and simplify the production process B) Improve design quality and precision C) Identify processes for change D) Extend the value chain E) Identify synergies Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 92) BPM tools can do all of the following except: A) capture and enforce business rules for performing processes. B) integrate existing systems to support new or redesigned processes. C) create models of improved processes. D) document processes requiring improvement. E) create a digital model of a part, product or structure. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 93) Which of the following statements about BPR is not true? A) BPR can result in a paradigm shift. B) BPR can lead to dramatic gains in productivity and efficiency. C) BPR is the easiest type of BPM to implement. D) Amazon is an example of BPR. E) BPR typically involves radical change. Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 94) Mapping and measuring existing processes is an important part of BPM. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness?

95) The most significant barrier to successful business process change is organizational culture. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 96) BPM ends once the new processes are both implemented and accepted. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 97) Business process reengineering involves the radical redesign of business processes. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 98) What is BPM? What are the steps involved in practicing BPM? Answer: BPM is the acronym for business process management. BPM involves the practice of continuously improving business processes. The steps in BPM are (1) identifying processes for change, (2) analyzing existing processes, (3) designing the new process, (4) implementing the new process, and (5) continuous measurement. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? 99) Why should a company engage in business process reengineering? How would a company know if it needed or would gain from BPR? Answer: A company should engage in BPR in order to enhance profits or sales through using information systems. To determine this, a company could study its value chain and business processes to see which points might be automated or be made more efficient, have value added or improve quality. Difficulty: Easy AACSB: Analytical Thinking; Written and Oral Communication LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness?

100) Why is identifying processes for change one of the most important strategic decisions that a firm can make? Answer: One of the most important strategic decisions that a firm can make is understanding which business processes need improvement. When information systems are used to strengthen the wrong business model or business processes, the business can become more efficient at doing what it should not do. As a result, the firm becomes vulnerable to competitors who may have discovered the right business model. Considerable time and cost may also be spent improving business processes that have little impact on overall firm performance and revenue. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 3-4: What is the role of business process management (BPM) in enhancing competitiveness? Essentials of MIS, 14e (Laudon/Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Which of the following best describes how new information systems can result in legal gray areas? A) They work with networked, digital data, which are more difficult to control than information stored manually. B) They result in new situations that are not covered by old laws. C) They are implemented by technicians rather than managers. D) They are created from sets of logical and technological rules rather than social or organizational mores. E) They are little understood by politicians or lawyers. Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems? 2) Which of the following best describes the effect that new information technology has on society? A) It has a dampening effect on the discourse of business ethics. B) It has a ripple effect, raising new ethical, social, and political issues. C) It is beneficial for society as a whole, while raising dilemmas for consumers. D) It has a waterfall effect in raising ever more complex ethical issues. E) It has a magnifying effect, creating increasing numbers of ethical issues. Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems? 3) The obligations that individuals and organizations have concerning rights to intellectual property involve which of the following moral dimensions of the information age? A) Property rights and obligations B) System quality C) Accountability and control 85

D) Information rights and obligations E) Quality of life Answer: A Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

4) The obligations that individuals and organizations have regarding the preservation of existing values and institutions fall within which of the following moral dimensions of the information age? A) Family and home B) Property rights and obligations C) System quality D) Accountability and control E) Quality of life Answer: E Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems? 5) Which of the following is not one of the current key technology trends that raises ethical issues? A) Decline in data storage costs B) Advances in data analysis C) Increase in data quality D) Doubling of computing power every 18 months E) Advances in networking technology Answer: C Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems? 6) All of the following are factors in U.S. federal sentencing guidelines with respect to business executives except: A) the monetary value of the crime. B) the presence of a conspiracy to prevent discovery of the crime. C) the use of technology to commit the crime. D) the use of structured financial transactions to hide the crime. E) the failure to cooperate with prosecutors. Answer: C Difficulty: Challenging AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

7) The use of computers to assemble data from different sources to create digital dossiers of detailed information about individuals is known as which of the following? A) Profiling B) Phishing C) Spamming D) Targeting E) Spyware Answer: A Difficulty: Easy AACSB: Information Technology LO: 4-1: What ethical, social, and political issues are raised by information systems? 8) Which of the following is a data analysis technology that finds hidden connections between data in disparate sources? A) HIPAA B) FIP C) NORA D) COPPA E) Spyware Answer: C Difficulty: Easy AACSB: Information Technology LO: 4-1: What ethical, social, and political issues are raised by information systems? 9) Which of the following is not an example of the potential dark side of big data? A) Police visits to individuals whom a computer system identified as likely to commit a crime in the future B) Use of a device installed in a car to analyze driving habits C) Use of a predictive modeling system that predicts life expectancy by using data about individual consumers' buying habits as well as personal and family medical histories D) Use of computerized systems to filter and hire job applicants E) Analyzing data from sensors installed in local parks to monitor soil moisture Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 4-1: What ethical, social, and political issues are raised by information systems? 10) Advances in data storage and rapidly declining data storage costs have been responsible for decreasing the number of databases on individuals maintained by private and public organizations. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 4-1: What ethical, social, and political issues are raised by information systems?

11) In today's legal environment, managers who are convicted for the misuse of information systems are unlikely to be given a prison sentence. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 4-1: What ethical, social, and political issues are raised by information systems? 12) Ethics describes the principles of right and wrong that can be used by individuals to make choices to guide their behavior. Answer: TRUE Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems? 13) Identify the five moral dimensions that are involved in political, social, and ethical issues and briefly describe each. Of these, which do you think is the most difficult for society to deal with? Support your opinion. Answer: The five moral dimensions are: (1) Information rights and obligations. What rights do individuals and organizations have with respect to information pertaining to them? (2) Property rights and obligations. How can intellectual property rights be protected when it is so easy to copy digital materials? (3) Accountability and control. Who will be held accountable and liable for the harm done to individual and collective information and property rights? (4) System quality. What standards of data and system quality should we demand to protect individual rights and the safety of society? (5) Quality of life. What values should be preserved? What institutions must we protect? What cultural values can be harmed? Individual answers for determining the most difficult for society to deal with will vary. One answer might be: Quality of life issues will be most difficult for society to deal with in societies that are comprised of many different cultural and ethnic groups, such as the United States. It is difficult to regulate concerns that are based on subjective values. Difficulty: Moderate AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-1: What ethical, social, and political issues are raised by information systems?

14) Describe three technology trends that pose ethical issues, giving an example for each of its ethical or moral impact. Answer: Key technology trends include the following: (1) Computer power doubling every 18 months: ethical impact–because more organizations depend on computer systems for critical operations, these systems are vulnerable to computer crime and computer abuse; (2) Data storage costs are rapidly declining: ethical impact—it is easy to maintain detailed databases on individuals—who has access to and control of these databases?; (3) Data analysis advances: ethical impact—vast databases full of individual information may be used to develop detailed profiles of individual behavior; (4) Networking advances and the Internet: ethical impact—it is easy to copy data from one location to another. Who owns data? How can ownership be protected?; (5) Mobile device growth impact: ethical impact—individual cell phones may be tracked without user consent or knowledge. Difficulty: Moderate AACSB: Ethical Understanding and Reasoning; Information Technology; Written and Oral Communication LO: 4-1: What ethical, social, and political issues are raised by information systems? 15) What is NORA and how does it work? Answer: NORA stands for nonobvious relationship awareness. NORA has given both the government and the private sector even more powerful profiling capabilities. NORA can take information about people from many disparate sources, such as employment applications, telephone records, customer listings, and wanted lists, and correlate relationships to find obscure connections that might help identify criminals or terrorists. NORA technology scans data and extracts information as the data are being generated so that it could, for example, instantly discover a man at an airline ticket counter who shares a phone number with a known terrorist before that person boards an airplane. The technology is considered a valuable tool for homeland security but does have privacy implications because it can provide such a detailed picture of the activities and associations of a single individual. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 4-1: What ethical, social, and political issues are raised by information systems? 16) means that you accept the potential costs and obligations for the decisions you make. A) Responsibility B) Accountability C) Liability D) Due process E) Duty Answer: A Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

17) is a feature of social institutions that means mechanisms are in place to determine responsibility for an action. A) Due process B) Accountability C) The courts of appeal D) The judicial system E) Liability Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 18) is a feature of law-governed society and involves having laws that are known and understood, along with the ability to appeal to higher authorities to ensure that the laws are applied correctly. A) Liability B) Due process C) Responsibility D) Accountability E) The judicial system Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 19) All of the following are steps in the process for analyzing an ethical issue except: A) assigning responsibility. B) identifying the stakeholders. C) identifying the options you can reasonably take. D) identifying and clearly describing the facts. E) identifying the potential consequences of your options. Answer: A Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

20) A colleague at work takes small amounts of office supplies for her own personal use, saying that this is a tiny loss to the company. You tell her that if everyone were to take office supplies, then the loss would no longer be minimal. Your rationale expresses which of the following ethical principles? A) Kant's Categorical Imperative B) The Golden Rule C) The Risk Aversion Principle D) The "no-free-lunch" rule E) The slippery-slope rule Answer: A Difficulty: Challenging AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 21) A man steals from a grocery store in order to feed his starving family. Which of the following best expresses the utilitarian principle in evaluating this situation? A) His action is acceptable, because the grocer suffers the least harm. B) His action is acceptable, because the higher social value is the survival of the family. C) His action is wrong, because the man would not want the grocer to steal from him. D) His action is wrong, because if everyone were to do this, the concept of personal property is defeated. E) His action is wrong, because the grocery store owner is harmed. Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 22) Which of the following best describes Immanuel Kant's categorical imperative? A) If an action cannot be taken repeatedly, then it is not right to be taken at any time. B) One should take the action that produces the least harm or incurs the least cost. C) One can put values in rank order and understand the consequences of various courses of action. D) If an action is not right for everyone to take, it is not right for anyone to take. E) You should act towards others as you would like them to act towards you. Answer: D Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

23) The ethical no-free-lunch rule states that: A) if an action cannot be taken repeatedly, then it is not right to be taken at any time. B) one should take the action that produces the least harm or incurs the least cost. C) one can put values in rank order and understand the consequences of various courses of action. D) if something someone else has created is useful to you, it has value, and you should assume the creator wants compensation for this work. E) if an action is not right for everyone to take, it is not right for anyone to take. Answer: D Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 24) According to , you should take the action that produces the least harm. A) Kant's categorical imperative B) the risk aversion principle C) the utilitarian principle D) the Golden Rule E) the no-free-lunch rule Answer: B Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 25) Which ethical rule states that if an action cannot be taken repeatedly, it is not right to take at all? A) Slippery slope rule B) Lemming rule C) High-failure cost rule D) Utilitarian principle E) Golden Rule Answer: A Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 26) Which of the following ethical guidelines suggests that you put yourself in the place of others, and think of yourself as the object of the decision? A) Kant's categorical imperative B) The risk aversion principle C) The utilitarian principle D) The Golden Rule E) The no-free-lunch rule Answer: D Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 93

27) Identifying the stakeholders—people who have a vested interest in the outcome of the decision—is the last step in analyzing an ethical issue. Answer: FALSE Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 28) Because of their special claims to knowledge, wisdom, and respect, professionals take on special rights and obligations. Answer: TRUE Difficulty: Easy AACSB: Ethical Understanding and Reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 29) Due process is a feature of political systems and allows individuals to recover damages done to them by others. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 30) What are the steps in conducting an ethical analysis? Answer: The steps are: (1) Identify and describe the facts clearly; (2) define the conflict or dilemma and identify the higher-order values involved; (3) identify the stakeholders; (4) identify the options that you can reasonably take; and (5) identify the potential consequences of your options. Difficulty: Easy AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 31) Identify and discuss the six ethical principles discussed in the chapter. Answer: The six ethical principles are the Golden Rule, Kant's categorical imperative, the slippery slope rule, the utilitarian principle, the risk aversion principle, and the no-free-lunch rule. The Golden Rule proposes that you should do unto others as you would have them do unto you. Immanuel Kant's categorical imperative proposes that if an action is not right for everyone to take, it is not right for anyone. The slippery slope rule says: If an action cannot be taken repeatedly, it is not right to take at all. The utilitarian principle is: Take the action that achieves the higher or greater value. The risk aversion principle is: Take the action that produces the least harm or the least potential cost. The no-free-lunch rule says: Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise. Tangible objects are owned by someone else unless there is a specific declaration otherwise. Difficulty: Moderate AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 94

32) Define the basic concepts of responsibility, accountability, and liability as applied to ethical decisions. How are these concepts related? Answer: Responsibility is the first key element of ethical action. Responsibility means that an individual, group, or organization accepts the potential costs, duties, and obligations for decisions made. Accountability is a feature of systems and social institutions. It means that mechanisms are in place to determine who took responsible action; i.e., who is responsible for the action. Liability is a feature of political systems in which a body of law is in place that permits individuals to recover the damages done to them by others. These concepts are related as follows: I will assume the blame or benefit for the actions I take (responsibility); this blame or benefit accrues to me through the requirement that I be able to explain why I have taken the actions I have (accountability) for actions traceable to me by defined mechanisms in the organization, and if those actions result in harm to another, I will be held by law to reparations for those actions (liability). Difficulty: Challenging AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-2: What specific principles for conduct can be used to guide ethical decisions? 33) In 2010, the FTC added all of the following recommendations to its privacy guidelines except: A) firms should build products and services that protect privacy. B) firms should increase the transparency of their data collection. C) firms should require consumer consent and provide clear options to opt out of data collection. D) firms should limit the length of time that any personal data is stored to six months or less. E) consumers should be able to review and contest the accuracy and completeness of data. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 34) Which of the following is considered the most important U.S. federal statute setting forth conditions for the federal government's handling of information about individuals? A) The Privacy Act B) The Gramm-Leach-Bliley Act C) The Freedom of Information Act D) COPPA E) HIPAA Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

35) FIP principles are based on a belief in which of the following? A) Accountability of the record holder B) Responsibility of the record holder C) Mutuality of interest between the record holder and the individual D) Privacy of the individual E) Difference between the interests of the individual and commercial organizations Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 36) The FIP principle of Notice/Awareness states that: A) customers must be allowed to choose how their information will be used for secondary purposes other than the supporting transaction. B) data collectors must take responsible steps to assure that consumer information is accurate and secure from unauthorized use. C) there must be a mechanism in place to enforce FIP principles. D) consumers should be able to review the data collected about them. E) websites must disclose their information practices before collecting data. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 37) Which of the following U.S. laws gives patients access to personal medical records and the right to authorize how this information can be used or disclosed? A) HIPAA B) Gramm-Leach-Bliley Act C) Privacy Protection Act D) Freedom of Information Act E) COPPA Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

38) Which of the following is not a U.S. federal law affecting private institutions? A) COPPA B) HIPAA C) Gramm-Leach-Bliley Act D) Video Privacy Protection Act E) Computer Matching and Privacy Protection Act Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 39) All of the following laws apply to actions by the federal government except: A) the Freedom of Information Act. B) the Privacy Act. C) the Computer Security Act. D) the Children's Online Privacy Protection Act. E) the E-Government Act. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 40) When a cookie is created during a website visit, it is stored: A) on the website's server. B) on the hard drive of the visitor's computer. C) on the ISP's servers. D) in the browser's application settings. E) nowhere, because they are only used during a visit and are discarded once a visitor leaves the website. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

41) What of the following is not a feature of the General Data Protection Regulation (GDPR)? A) It applies to all firms doing business in the EU. B) It requires unambiguous consent for using personal data to construct profiles. C) It imposes fines on companies for violating the regulation up to 4 percent of a firm's global revenue D) It creates a single EU privacy policy. E) It prevents firms from using cookies. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 42) Which of the following allows the EU to enforce GDPR requirements with non-EU countries like the United States? A) COPPA B) P3P C) PGP D) FIP E) Privacy shield agreement Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 43) In the model of informed consent, personal information can be collected until the consumer specifically requests that his or her data not be collected. A) opt-in B) opt-out C) P3P D) PGP E) safe harbor Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

44) What percent of global Internet users use Google Search and other Google services? A) Less than 10 percent B) Around 25 percent C) About 50 percent D) Nearly 80 percent E) Over 90 percent Answer: D Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 45) Which of the following forms of protection of intellectual property requires that the property be the subject of a nondisclosure agreement? A) Copyright B) Patent C) All forms of intellectual property protection D) Trademark E) Trade secret Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 46) All of the following are technical solutions to protecting user privacy except: A) email encryption. B) anonymous surfing. C) anonymous email. D) preventing client computers from accepting cookies. E) data use policies. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

47) Which of the following protects the authors of a book from having their work copied by others? A) Patent protection B) Due process C) Copyright law D) Fair Use Doctrine E) Trade Secret law Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 48) Look-and-feel copyright infringement lawsuits are concerned with: A) the distinction between tangible and intangible ideas. B) the distinction between an idea and its expression. C) using the graphical elements of another product. D) using the creative elements of another product. E) violation of a monopoly on the ideas behind a product. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 49) The NAI is an industry association formed to help with which of the following? A) Copyright protection B) Online privacy issues C) Patent protection D) Trademark protection E) Trade secret protection Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

100

50) Which of the following is not protected by copyright law? A) Musical compositions B) Motion pictures C) Maps D) Artwork E) Machines Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 51) Which of the following adjusts copyright laws to the Internet age by making it illegal to circumvent technology-based protections of copyrighted materials? A) Digital Millennium Copyright Act B) Privacy Act C) Freedom of Information Act D) Electronic Communications Privacy Act E) Computer Software Copyright Act Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 52) Which of the following runs an antipiracy hotline for individuals to report piracy activities? A) WIPO B) NAI C) SIIA D) FTC E) FCC Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

101

53) Advertisers use in order to display more relevant ads based on a user's search and browsing history. A) behavioral targeting B) Web bugs C) NORA D) intelligent agents E) FIP principles Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 54) prohibits an organization from collecting any personal information unless the individual specifically takes action to approve information collection and use. A) A safe harbor B) The opt-in model C) FIP principles D) P3P E) The opt-out model Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 55) _______ grants the owner exclusive ownership of the ideas behind an invention for 20 years. A) Copyright law B) Trademark law C) Patent law D) Trade secret protection E) Privacy law Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

102

56) The right to is a feature of the GDPR that allows individuals to have their personal information removed from social network and search sites. A) opt-out of data collection B) a safe harbor C) be forgotten D) do not track E) opt-in to data collection Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 57) Which of the following is not a difficulty in establishing patent protection? A) Length of time required to receive protection B) The requirement that the work reflect some special understanding and contribution C) The requirement that the work must be original D) The requirement that the work must be novel E) The requirement that the work must be a secret Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 58) Which of the following is not true about the changes to EU data protection rules enacted in the GDPR? A) The new rules require Internet companies to obtain explicit consent from consumers for the use of their personal data. B) The new rules require Internet companies to delete information at the user's request. C) The new rules require Internet companies to retain information only as long as absolutely necessary. D) The new rules do not allow consumers to have their data removed from company servers. E) The new rules strengthen the right to be forgotten. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

103

59) Digital media differs from a physical book in all of the following ways except: A) ease of replication. B) ease of alteration. C) ease of transmission. D) ease of global distribution. E) ease of establishing uniqueness. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 60) Which of the following were involved in what has been called the patent trial of the century? A) Apple and Microsoft B) Apple and Hewlett-Packard C) Microsoft and Symantec D) Microsoft and Facebook E) Apple and Samsung Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 61) Which of the following is not a file-sharing service? A) The Pirate Bay B) Megaupload C) Morpheus D) Pandora E) Grokster Answer: D Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 62) The European Parliament has banned unsolicited commercial messaging. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

104

63) A Facebook user's visit to a website can be tracked even if they do not click a Like button. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 64) Malicious software that is installed secretly on your computer by other applications and that tracks your online movements is called spyware. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 65) Most Internet businesses do very little to protect the privacy of their customers. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 66) Microsoft's Internet Explorer 11 web browser includes an opt-out of tracking policy as the default. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 67) Any intellectual work product that isn't based on public knowledge can be classed as a trade secret. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 68) Copyright is a legal protection given to creators of certain types of intellectual property. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

105

69) Software programs were unprotected by copyright law until the early 1990s. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 70) Websites are required to honor web browsers' Do Not Track settings. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 71) European countries do not allow businesses to use personally identifiable information without consumers' prior consent. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 72) One of the key concepts in patent law is originality. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 73) Some forms of illegal sharing of music files have declined as legitimate online music stores have expanded. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 74) COPPA is a set of five principles developed by the FTC that most American and European privacy law is based on. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

106

75) Although online tracking gathers an enormous amount of information on individual users, it is anonymous and can't be tied to a specific person. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 76) Web beacons are tiny, invisible software programs hidden in email messages and web pages that are used to track and report a user's online behavior. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 77) What are the major issues concerning privacy in the information age? Do you believe the need for homeland security should overrule some of the personal privacy and information rights we have previously taken for granted? Why or why not? Answer: One answer might be that we should depend upon the Federal Trade Commission Fair Information Practice Principles and that as long as these principles are not ignored or overset, personal privacy does not conflict with homeland security. This is a weak argument. Other issues involve online privacy, employee monitoring, tradeoffs between security and privacy and good business results versus privacy. Difficulty: Moderate AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 78) Describe how a cookie works. Answer: A cookie works as follows: A user opens a web browser and selects a website to visit. The user's computer sends a request for information to the server running the website. At the same time the server sends a cookie–a data file containing information like an encrypted user ID and information about when the user visited and what he did on the site. The user's computer receives the cookie and places it in a file on the hard drive. Whenever the user goes back to the website, the server running the site retrieves the cookie to help identify the user. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

107

79) How does protection of privacy in Europe differ from the United States? Answer: In 2018 the European Commission implemented the EU General Data Protection Regulation (GDPR), which is arguably the most important privacy legislation in the last twenty years since the FTC's Fair Information Practices Principles. It applies to all firms and organizations that collect, store, or process personal information of EU citizens, and these protections apply worldwide regardless of where the processing takes place. The GDPR is an updated framework for protecting PII (personally identifiable information) and replaces an earlier Data Protection Directive of 1998. In Europe, privacy protection is historically much stronger than it is in the United States. In the United States, there is no federal agency charged with enforcing privacy laws. And there is no single privacy statute governing private corporation use of PII. Instead, privacy laws are piecemeal, sector by sector, for example, medical privacy, educational privacy, and financial privacy laws. These are enforced by the FTC, through selfregulation by businesses, and by individuals who must sue agencies or companies in court to recover damages. This is expensive and rarely done. In the EU, data protection laws are comprehensive, apply to all organizations, and enforced by data protection agencies in each country to pursue complaints brought by citizens and actively enforce privacy laws. The GDPR protects a wide variety of PII: basic identity information such as name, address, and ID numbers; web data such as location, IP address, cookie data, and RFID tags; health and genetic data; mobile phone number; driver's license and passport number; biometric and facial data; racial and ethnic data; political opinions; and sexual orientation. The main objective of the GDPR is to strengthen the rights of citizens to their own personal information and to strengthen oversight of firms to ensure they implement these individual rights. A second thrust was to harmonize conflicting data protection standards among the 28 European block nations and create a single EU agency to implement and enforce the regulation. And third, to enforce these conditions worldwide for all organizations that operate in the EU, or process data pertaining to EU citizens, regardless of where the organization is located. For individuals, the GDPR requires organizations to allow consumers to access all their personal information without charge within one month; delete personal data (right to be forgotten); ensure data portability so consumers are not locked into a particular service; and guarantee the right to sue providers for damages or abuse of PII, including class action law suits. Organizational requirements have been strengthened to include requiring organizations to have a data protection officer that reports to senior management; requiring explicit consent before collecting data (positive opt-in), and eliminating default opt-in processes; publishing the rationale for data collection and the length of retention; reporting of breaches and hacks within 72 hours; liability for data they share with partners or other firms, and a listing of all firms they share data with; building privacy protections into all new systems (privacy by design); limit targeting and retargeting of individuals to audience-level, anonymized data, rather than targeting based on intimate, personal profiles; limiting the collection of personal data to only that which is needed to support a task, or a transaction, and then deleting it shortly thereafter. Abuse of PII can be fined up to $20 million or 4% of the organization's global revenue, whichever is greater. Finally, the EU will enforce the GDPR requirements with non-EU countries like the United States using intergovernmental privacy shield agreements that ensure that EU data processed in non-EU nations meets GDPR standards. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 108

80) Discuss the history of Apple's and Samsung's patent battle against each other. Answer: In 2011, Apple sued Samsung for violating its patents for iPhones, iPads, and iPods. On August 24, 2012, a California jury in federal district court awarded Apple $1 billion in damages and prohibited Samsung from selling its new Galaxy 10 tablet computers in the United States. The decision established criteria for determining just how close a competitor can come to an industry-leading and standard-setting product like Apple's iPhone before it violates the design and utility patents of the leading firm. Samsung subsequently won an infringement case against Apple that banned a handful of older iPhone and iPad devices. In 2014 Apple sued Samsung again, claiming infringement of five patents covering hardware and software techniques for handling photos, videos, and lists used on the Samsung Galaxy 5. In 2015, the U.S. Court of Appeals reaffirmed that Samsung had copied specific design patents but reduced the damages awarded to Apple from $2 billion to $930 million. After seven years of battling in court, the two firms finally settled in 2018 with Apple receiving an estimated $500 million from Samsung. To make matters more complicated, Apple has been one of Samsung's largest customers for flash memory processors, graphic chips, solid-state drives, and display parts that are used in Apple's iPhones, iPads, iPod Touch devices, and MacBooks. The Samsung and Apple patent cases are indicative of the complex relationships among the leading computer firms. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 81) are not held liable for the messages they transmit. A) Regulated common carriers B) Private individuals C) Organizations and businesses D) Elected officials E) European ISPs Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

109

82) As discussed in the chapter case, which of the following statements about smartphone usage is not true? A) Using smartphones extensively can be detrimental to social skills and relationships. B) The iOS operating system for Apple smartphones does not currently offer any parental control options. C) The average American teenager who uses a smartphone receives his or her first phone at age 10. D) A recent survey found that over two-thirds of teachers reported that the number of students who are negatively distracted by digital technologies in the classroom is growing. E) Teens who spend five hours or more a day using electronic devices are more likely to get less than seven hours of sleep per night. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 83) Which of the following is the most common reason that business systems fail? A) Software bugs B) Software errors C) Hardware failures D) Facilities failures E) Data quality Answer: E Difficulty: Moderate AACSB: Information Technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 84) Which of the following is a primary drawback to the "do anything anywhere" computing environment? A) It makes work environments less pleasant. B) It creates a digital divide. C) It centralizes power at corporate headquarters. D) It blurs the traditional boundaries between work and family time. E) It leads to employees being paid less for the total amount of work performed. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

110

85) Which of the following statements about spam is not true? A) Most spam originates from bot networks. B) Cell phone spam usually comes in the form of SMS text messages. C) Over 75 percent of all email is spam. D) Spamming has mushroomed because it is so inexpensive and can reach so many people. E) Spamming is more tightly regulated in Europe than in the United States. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 86) The U.S. CAN-SPAM Act: A) makes spamming illegal. B) requires commercial email senders to identify themselves. C) has dramatically cut down spamming. D) does not override state anti-spamming laws. E) does not outlaw the use of fake return addresses. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 87) Which of the five moral dimensions of the information age does the weakening of boundaries between work and family life involve? A) Quality of life B) System quality C) Accountability and control D) Information rights and obligations E) Property rights and obligations Answer: A Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

111

88) Redesigning and automating business processes can be seen as a double-edged sword because: A) increases in efficiency may be accompanied by job losses. B) increases in efficiency may be accompanied by poor data quality. C) support for middle-management decision making may be offset by poor data quality. D) reliance on technology results in the loss of hands-on knowledge. E) it can concentrate power in the hands of senior executives. Answer: A Difficulty: Moderate AACSB: Ethical Understanding and Reasoning LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 89) Which of the following terms refers to significant disparities in access to computers and the Internet among different social groups and different locations? A) CVS B) Technostress C) Digital divide D) RSI E) CTS Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 90) CVS refers to: A) eyestrain related to computer display screen use. B) a business practice that attempts to evaluate the intangible values of computer systems. C) carpal vision syndrome. D) a type of antivirus protection software. E) wrist injuries brought about by incorrect hand position when using a keyboard. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

112

91) Which of the following occurs when muscle groups are forced through tens of thousands of repetitions under low-impact loads? A) CTS B) CVS C) RSI D) Technostress E) RSS Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 92) Gaining unapproved access to a computer is a federal crime. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 93) Spam is legally defined as any email that is unsolicited. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 94) Big Tech firms are facing increasing antitrust scrutiny. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 95) Computer abuse refers to acts involving a computer that may not be illegal but are considered unethical. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

113

96) One of the capabilities of Internet communication is the ability of the individual to appear essentially anonymous by using made-up user names. Is anonymity the same thing as privacy, and should it be a right? What ethical issues are raised by increased anonymity? Answer: Student answers will vary but should include a definition of privacy and an attempt to differentiate between anonymity and privacy, as well as an understanding that anonymity can result in a breakdown of clear accountability or responsibility for actions. A sample answer is: Privacy is the claim to be left alone, free from surveillance. This is different from anonymity, in which nobody knows who you are or what actions you take even in a public arena. Some individuals, if they feel they are anonymous, may have lapses in ethical behavior because anonymity means they are no longer accountable for their actions. I don't know if anonymity should be a right, but perhaps anonymity should not be permissible for some types of communication. Difficulty: Challenging AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 97) What do you consider to be the primary ethical, social, and political issues regarding the quality of a software product? Answer: Student answers will vary but should include a description of the software manufacturer's responsibility in software quality and an understanding of the difference between social concerns (culture, lifestyle effects) and political concerns (legal, institutional effects). A sample answer is: The central quality-related ethical issue that software quality raises is what responsibility does a software manufacturer have in the performance of its software? At what point can the manufacturer conclude that its software achieves an adequate level of quality? The leading social issue raised by quality is: how is our society affected by low-quality software and is this a concern? And how much accountability should the software manufacturer have? The central political concern raised by software quality is whether and how to enforce software quality minimums and standards, and what institutions are thus also held accountable. Difficulty: Moderate AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

114

98) Discuss some of the possible implications of the increasing economic and political power of so-called "Big Tech." Answer: In 2019 Amazon accounted for over half of all e-commerce retail sales, along with 75 percent of all book sales. Google accounts for 87 percent of online search. Facebook (including Instagram) accounts for over 86 percent of all social network users and has 60 percent of the total Internet audience. Ninety percent of new online ad dollars went to Google or Facebook. Seventy-five percent of video streamers use Netflix, 53 percent use YouTube, and 33 percent use Amazon. In the office, Microsoft dominates with over 90 percent of the world's 2 billion PCs using Windows software and software products. Apple accounts for 48 percent of the U.S. market in smartphones (Google accounts for the remaining 52 percent). The millions of Apple apps run only on Apple phones, likewise for Android apps running only on Android phones. In the new world of these so-called Big Tech firms, oligopolies and monopolies dominate the Web and mobile platforms. The wealth created by these firms inevitably translates into political influence: these same firms have amassed an army of lobbyists in Washington and state capitals to ensure legislation, or legislative inquiries, that might affect their market and tax concerns, reflects their interests. Big Tech firms have increased their lobbying efforts in Washington to over $30 billion annually, second only to financial firm lobbying. Concentrations of market power are not new in the United States or Europe. Beginning in 1890 with the Sherman Antitrust Act in the United States, and continuing through the 1960s, monopolies have been considered threats to competition and to smaller start-up businesses, generally restraining free trade. Monopolies typically achieve their size by purchasing smaller competitors, or crushing them by developing similar products, or engaging in predatory pricing by dropping prices drastically for short periods of time to force smaller firms out of business. Big Tech firms have a welldocumented history of these behaviors. But antitrust thinking changed in the 1970s to a different standard of harm: consumer welfare. In this view, bigness per se was not a danger, or even anticompetitive behavior. Instead price and consumer welfare became paramount. As long as consumers were not forced to pay higher prices, then market power was not important, not a social or economic harm. In this view, because the offerings of Facebook, Google, and Amazon are either free or very low cost, there can be no harm. Critics point out that consumer welfare is harmed in other ways than price, namely, by preventing new, innovative companies from market access, or surviving long enough to prosper as independent firms. Complaints and lawsuits originated by small start-up firms alleging anticompetitive and unfair practices, and concerns about the abuse of personal privacy by Big Tech firms, have led to a torrent of critical articles and several congressional investigations. Heretofore the poster children of American capitalism at its best, Big Tech firms are today the targets of stinging public criticism, legislative investigations, and regulatory actions. Many commentators are calling for breaking up Big Tech firms into separate businesses much as the Sherman Antitrust act broke up Standard Oil in 1911, as well as other monopolies in photography, tobacco, steel, railroads, meat packing, telecommunications, and computers. Difficulty: Challenging AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

115

99) What is the digital divide and how does it impact society? Answer: The digital divide relates to the fact that information, knowledge, computers, and access to digital and information resources through educational institutions and public libraries are inequitably distributed along ethnic and social class lines. Several studies have found that poor and minority groups in the United States are less likely to have computers or online Internet access even though computer ownership and Internet access have soared in the past five years. Although the gap in computer access is narrowing, higher-income families in each ethnic group are still more likely to have home computers and broadband Internet access than lower-income families in the same group. Moreover, the children of higher-income families are far more likely to use their Internet access to pursue educational goals, whereas lower-income children are much more likely to spend time on entertainment and games. Left uncorrected, this digital divide could lead to a society of information haves, computer literate and skilled, versus a large group of information have-nots, computer illiterate and unskilled. Public interest groups want to narrow this digital divide by making digital information services—including the Internet—available to virtually everyone, just as basic telephone service is now. Difficulty: Challenging AACSB: Ethical Understanding and Reasoning; Written and Oral Communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 100) What are some of the potential health risks associated with use of computers? Answer: A common occupational disease today is repetitive stress injury (RSI). RSI occurs when muscle groups are forced through repetitive actions often with high-impact loads (such as tennis) or tens of thousands of repetitions under low-impact loads (such as working at a computer keyboard). The incidence of repetitive stress syndrome is estimated to be as much as one-third of the labor force and accounts for one-third of all disability cases. The single largest source of RSI is computer keyboards. The most common kind of computer-related RSI is carpal tunnel syndrome (CTS), in which pressure on the median nerve through the wrist's bony structure, called a carpal tunnel, produces pain. The pressure is caused by constant repetition of keystrokes. Symptoms of carpal tunnel syndrome include numbness, shooting pain, inability to grasp objects, and tingling. Millions of workers have been diagnosed with carpal tunnel syndrome. It affects an estimated 3 percent to 6 percent of the workforce. RSI is not the only occupational illness computers cause. Back and neck pain, leg stress, and foot pain also result from poor ergonomic designs of workstations. Computer vision syndrome (CVS) refers to any eyestrain condition related to display screen use in desktop computers, laptops, e-readers, smartphones, and handheld video games. CVS affects about 90 percent of people who spend three hours or more per day at a computer. Its symptoms, which are usually temporary, include headaches, blurred vision, and dry and irritated eyes. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life? Essentials of MIS, 14e (Laudon/Laudon) Chapter 5 IT Infrastructure: Hardware and Software 1) Software that manages the resources and activities of the computer is called: 116

A) system software. B) application software. C) data management software. D) network software. E) web services software. Answer: A Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 2) Software used to apply the computer to a specific task for an end user is called: A) system software. B) application software. C) data management software. D) network software. E) web services software. Answer: B Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 3) Software that organizes, manages, and processes business data, such as data concerned with inventory, customers, and vendors, is called: A) system software. B) application software. C) data management software. D) network software. E) web services software. Answer: C Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 4) Which of the following is an example of a legacy system? A) Transaction processing system running on a mainframe B) Scalable grid computing system C) Web services running on a cloud computing platform D) MDM software E) Quantum computing system Answer: A Difficulty: Challenging AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 5) A firm's IT infrastructure provides the foundation for supporting all the information systems in the business. Answer: TRUE 117

Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 6) Today, most system software is custom built by in-house programmers. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 7) Systems integration means ensuring the legacy systems work with new elements of the infrastructure. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 8) Software used to process an order is an example of systems software. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 5-1: What are the components of IT infrastructure? 9) Describe the five major categories of IT infrastructure and provide an example of each. Answer: The major components of IT infrastructure are computer hardware, computer software, data management technology, networking and telecommunications technology, and technology services. Computer hardware consists of technology for computer processing, data storage, input, and output, such as large mainframes, servers, midrange computers, desktop and laptop computers, and mobile devices. Computer software includes both system software and application software. System software, such as the Windows operating system, manages the resources and activities of the computer. Application software, such as Microsoft Word, applies the computer to a specific task for an end user, such as processing an order or generating a mailing list. Data management technology is specialized software to organize the data and make it available to business users. Networking and telecommunications technology provides data, voice, and video connectivity to employees, customers, and suppliers. Technology services includes the people to run and manage the other infrastructure components and to train employees in how to use these technologies for their work. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-1: What are the components of IT infrastructure?

118

10) In a computing model, companies use their own infrastructure for essential computing tasks and adopt public cloud computing for less critical operations or additional processing during peak business periods. A) scalable B) quantum C) grid D) hybrid cloud E) private cloud Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 11) What would be a reason for using a workstation rather than a personal computer? A) When you need more powerful computational abilities B) When you need to access a network C) When you need to serve applications and data to client computers D) When you need to share resources E) When you need to connect to a cloud computing platform Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 12) Which of the following types of computers would you use to support a computer network? A) Server B) Mainframe C) Workstation D) PC E) Tablet Answer: A Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

119

13) Which of the following types of computers is traditionally used for military work such as classified weapons research? A) Mainframe B) Server C) Minicomputer D) Supercomputer E) PC Answer: D Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 14) Connecting geographically remote computers in a single network to create a "virtual supercomputer" is called: A) co-location. B) cloud computing. C) grid computing. D) client/server computing. E) centralized processing. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 15) The use of multiple computers linked by a communications network for processing is called: A) grid computing. B) distributed processing. C) client/server computing. D) centralized processing. E) supercomputing. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

120

16) The business case for using grid computing involves all of the following except: A) cost savings. B) centralized maintenance. C) speed of computation. D) agility. E) increased computational power. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 17) Which of the following statements about client/server computing is not true? A) The client provides the user interface. B) The bulk of processing occurs on the client. C) Computing on the Internet is based on the client/server model. D) The client is normally a desktop or laptop computer. E) The server provides security, remote access, and user authentication. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 18) In a multitiered network: A) the work of the entire network is centralized. B) the work of the entire network is balanced over several levels of servers. C) processing is split between clients and servers. D) processing is handled by multiple, geographically remote clients. E) users interface with the server rather than the client. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

121

19) A client computer networked to a server computer, with processing split between the two types of machines, is called a(n) architecture. A) service-oriented B) on-demand C) multitiered client/server D) two-tiered client/server E) grid Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 20) Which of the following statements about edge computing is not true? A) Edge computing is a method of optimizing cloud computing systems. B) Edge computing is useful when IoT devices do not need to be constantly connected to a central cloud. C) Edge computing reduces the amount of data flowing between local computers and devices and the central cloud data center. D) Edge computing increases delays in the transmitting and processing of data. E) Edge computing is helpful for financial services firms. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 21) Which of the following is a type of optical drive storage? A) Blu-ray B) Hard drive C) USB flash drive D) Magnetic tape E) SSD Answer: A Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

122

22) In lightweight PCs, smartphones, and tablets, which of the following have replaced hard drives? A) CD-ROM B) RAID C) SSDs D) Magnetic tape E) SANs Answer: C Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 23) All of the following are traditional storage technologies except: A) magnetic disks. B) optical drives. C) magnetic tape. D) cloud computing. E) storage networks. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 24) What type of device gathers data and converts them into electronic form for use by the computer? A) Output device B) Input device C) Optical storage D) Magnetic storage E) SAN Answer: B Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

123

25) Which of the following devices collects data directly from the environment for input into a computer system? A) Sensor B) Touch screen C) Audio input D) Trackball E) Digital scanner Answer: A Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 26) Which of the following is not a type of input device? A) Digital scanner B) Flat panel (LCD) display screen C) Trackball D) Keyboard E) Sensor Answer: B Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 27) Virtualization: A) allows one operating system to manage several physical machines. B) has enabled microprocessor manufacturers to reduce the size of transistors to the width of an atom. C) can boost server utilization rates to 70% or higher. D) allows smartphones to run full-fledged operating systems. E) uses the principles of quantum physics to represent data. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

124

28) Which of the following statements is not true about cloud computing? A) It is the fastest-growing form of computing. B) It removes the concern about data and systems security for businesses. C) It allows smaller firms to use resources previously unaffordable. D) It relies primarily on the Internet as the platform for delivering services to users. E) Charges for cloud resources are based on resources actually used. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 29) Which of the following is not an essential characteristic of cloud computing? A) On-demand self-service B) Rapid elasticity C) Measured service D) Open source software E) Ubiquitous network access Answer: D Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 30) describes the practices and technologies used to minimize the environmental effects of manufacturing and managing computing devices. A) Capacity planning B) Cloud computing C) Green computing D) Utility computing E) On-demand computing Answer: C Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

125

31) The world's data centers use as much energy as the output of nuclear power plants, which is about percent of all the energy use in the world. A) 10; 1 B) 20; 2.5 C) 30; 1.5 D) 50; 10 E) 100; 25 Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 32) All of the following are techniques being used to make data centers more "green" except: A) air-cooling. B) virtualization. C) use of wind power. D) use of hydropower. E) use of backup generators. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 33) Which of the following is not an example of the consumerization of IT? A) Dropbox B) BYOD C) Facebook D) Gmail E) Amazon Web Services Answer: E Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

126

34) All of the following are examples of wearable computing devices except: A) smartwatches. B) smart badges. C) activity trackers. D) smart glasses. E) smartphones. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 35) As discussed in the chapter case, all of the following are benefits of wearable computing devices except: A) providing information on workflow inefficiencies. B) enabling hands-free access to information. C) capturing real-time performance data. D) processing customer credit card information. E) correlating data to actual human behavior. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 36) Which of the following is the fastest-growing form of computing? A) Wearable computing B) Green computing C) Nanocomputing D) Enterprise computing E) Cloud computing Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

127

37) The National Institute of Standards and Technology (NIST) defines cloud computing as having all of the following characteristics except: A) measured service. B) ubiquitous network access. C) collaboration service. D) rapid elasticity. E) on-demand self-service. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 38) A mainframe is a type of legacy workstation. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 39) Client/server computing is the most widely used form of centralized processing. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 40) Application server software is responsible for locating and managing stored web pages. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 41) Using an online storage service such as Dropbox is a type of virtualization. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

128

42) In cloud computing, rapid elasticity refers to the ability of computing resources to be quickly obtained, increased, or decreased to meet demand. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 43) A private cloud is operated for the benefit of a single organization but may be managed by a third party and located off premises. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 44) G Suite is an example of SaaS. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 45) Nanotechnology uses individual atoms and molecules to create computer chips and other devices that are thousands of times smaller than current technologies permit. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 46) A SaaS provider maintains a large web server, or series of servers, and provides fee-paying subscribers with space to maintain their websites. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 47) In client/server computing, the server provides users access to system resources. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

129

48) Apple's A12 processor is an example of a multicore processor. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 49) An international ad hoc group of climatologists and oceanographers needs to set up a system to analyze massive amounts of data on ocean temperatures, collected hourly by hundreds of ships worldwide. What types of hardware might they need for storage and processing? What techniques might they use to make their research more efficient and lower costs? Answer: To store their data they will need a SAN. To process their data, they will need a supercomputer or grid computing. To lower costs, they could look at on-demand or utility computing, as well as multicore processors and virtualization. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 50) You are starting a small market research company with a single business partner and are planning the hardware and software needs for the two of you. You realize that you will need to make daily backups of your data. What choices do you have as backup media, and what will you choose? Why? Answer: Storage options include magnetic disks or hard drives, portable solid state drives (SSDs) and USB flash drives, optical drives (CD, DVD, and Blu-Ray), storage networks, magnetic tape, and cloud computing services. Student answers will vary as to their choice of backup media. An example answer is: I would probably choose a cloud computing backup service, because you can automatically back up your data, or an external or separate hard drive so that you do not have to keep inserting and removing CDs or DVDs. Difficulty: Easy AACSB: Information Technology; Written and Oral Communication LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

130

51) List and describe the major trends in computer hardware. Which of these do you think will create the biggest changes in business information systems, and why? Answer: The major trends in hardware are: the mobile digital platform, consumerization of IT and BYOD, nanotechnology and quantum computing, virtualization, cloud computing, edge computing, green computing, and high performance and power-saving processors. In the mobile digital platform trend, business computing is increasingly moving to smaller, mobile devices such as smartphones, and tablet computers, and netbooks. The consumerization of IT describes the phenomenon in which new information technology first emerges in the consumer market and then spreads to business organizations. One aspect of this is BYOD, or bring your own device, which describes the use of personal mobile devices for work. Nanotechnology uses individual atoms and molecules to create computer chips and other devices that are thousands of times smaller than current technologies permit. In quantum computing, data is processed using principles of quantum physics rather than binary digits or bits, making processing speeds millions of times faster than today. Virtualization is the process of presenting a set of computing resources (such as computing power or data storage) so that they can all be accessed in ways that are not restricted by physical configuration or geographic location. Server virtualization enables companies to run more than one operating system at the same time on a single machine. In cloud computing, firms and individuals obtain computing resources and software applications over the Internet ("the cloud"). Edge computing is a method of optimizing cloud computing systems by performing some processing on a set of linked servers at the edge of the network, near the source of the data, which reduces the amount of data flowing back and forth between local computers and other devices and the central cloud data center and reduces delays in the transmitting and processing of data. In green computing, companies utilize practices for manufacturing, deploying, and disposing of technology assets that minimize waste and pollution. The development and use of high performance and power-saving microprocessors is an additional method of increasing computational power without increasing or with reducing the power and cooling requirements of computers. Student opinions regarding the effects of the trends will vary. An example answer is: I think mobile computing will create the biggest changes, because this means that the amount of information and types of information being used in business, as well as the locations and hours of business, will increase drastically. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

131

52) You are an IT consultant advising a building inspection company that conducts home inspections throughout your state. The company wishes to implement mobile computing, so that inspectors can finalize reports without having to return to the office, but they are not sure how to go about this. What will be your advice? Answer: An example answer is: To support the use of multiple mobile devices, including employee devices, the company will need to configure its networks to receive connections from these devices, and create an inventory of all mobile devices authorized for access. They will also need to track what company information is being stored on these devices. If the information stored on employees' personal devices is highly confidential, they may want to consider the additional expense of purchasing work-only mobile devices. I would also ask the company what types of applications would be used in order to determine if tablet computers, netbooks, or smartphones will be best, as the operating systems for these devices differ. They may also want to consider mobile device management software to monitor and manage their mobile devices. It is probably best to sit down with the company and review the home inspection workflow and data needs in detail and determine how mobile computing would be employed most efficiently. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 53) What are the essential characteristics of cloud computing? Answer: As defined by the U.S. National Institute of Standards and Technology, cloud computing is characterized by on-demand self-service, ubiquitous network access, locationindependent resource pooling, rapid elasticity, and measured service. On-demand self-service means that consumers can use server time and network storage as they need it on their own. Ubiquitous network refers to the ability to access cloud resources across all devices and platforms, including mobile. Location independent resource pooling describes the ability to allocate resources to any part of the world without a dip in service quality. Rapid elasticity is the capacity for resources to be increased or decreased as needed to meet demand. Lastly, measured service refers to the payment technique whereby users are charged based on the resources they use, as opposed to monthly or yearly rates. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 5-2: What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends?

132

54) Which of the following is an interactive, multiuser operating system developed by Bell Laboratories to be highly supportive of communications and networking? A) UNIX B) Linux C) OS X D) COBOL E) Chrome Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 55) Linux is: A) primarily concerned with the tasks of end users. B) designed for specific machines and specific microprocessors. C) an example of open source software. D) especially useful for processing numeric data. E) the operating system for the Macintosh computer. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 56) Linux plays a major role in supporting business information systems and has garnered about of the worldwide server market. A) 10 percent B) 25 percent C) 35 percent D) 50 percent E) 80 percent Answer: C Difficulty: Challenging AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

133

57) Which of the following is a visual programming tool and environment for creating applications that run on Microsoft Windows operating systems? A) Java B) C++ C) XML D) Visual Basic E) COBOL Answer: D Difficulty: Easy AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 58) The toy manufacturer you work for wants to exchange data with a chain of toy stores in order to improve its distribution and speed to market. The toy stores use different software than your firm. Which of the following tools or technologies presents the best solution? A) Mashups B) Extranet C) Web services D) Cloud computing E) Intranet Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 59) Microsoft Word is an example of: A) open source software. B) word processing software. C) software productivity suite. D) data management software. E) presentation graphics software. Answer: B Difficulty: Easy AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

134

60) Which of the following statements about Linux is not true? A) Linux is a UNIX-like operating system. B) Linux plays a major role in running web servers and local area networks. C) Linux is the primary OS used in quantum computing. D) Linux is a robust alternative to Windows operating systems. E) Linux is an example of open source software. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 61) Microsoft Excel is an example of: A) data management software. B) spreadsheet software. C) presentation graphics. D) word processing software. E) presentation graphics software. Answer: B Difficulty: Easy AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 62) Which type of software can be used to create professional-looking documents, brochures, or books? A) Desktop publishing software B) Spreadsheet software C) Personal information management software D) Presentation graphics software E) Data management software Answer: A Difficulty: Easy AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

135

63) Running a Java program on a computer requires: A) a Java Virtual Machine to be installed on the computer. B) a Java Virtual Machine to be installed on the server hosting the Java applet. C) an applet to be downloaded to the user's computer. D) no extra or specialized software, as Java is platform-independent. E) an Intel processor and the Windows operating system. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 64) What is the foundation technology for web services? A) HTML B) XML C) SOAP D) UDDI E) Java Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 65) A(n) is a set of self-contained services that communicate with each other to create a working software application. A) web service B) hybrid cloud C) SOA D) ERP E) mashup Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

136

66) ZipRealty, which combines Google Maps with real estate data, is an example of: A) cloud computing. B) SOA. C) a widget. D) a mashup. E) a web service. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 5-3: What are the major types of computer software used in business and the major software trends? 67) Software applications that combine different components of online software applications are referred to as: A) integrated software. B) widgets. C) web mashups. D) grid computing. E) web services. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 68) Which of the following software tools would you use to prepare a what-if analysis? A) Word processing B) Spreadsheet C) Desktop publishing D) Personal information management E) Presentation graphics Answer: B Difficulty: Challenging AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

137

69) Which of the following is an open-source operating system designed for mobile devices? A) iOS B) OS X C) Chrome D) Android E) Apache HTTP Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 70) is an operating system-independent, processor-independent, object-oriented programming language that has become a leading interactive programming environment for the web. A) XML B) SOA C) HTML D) Java E) COBOL Answer: D Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 71) provides users with free access to its program code. A) An app B) Open source software C) Cloud-based software D) A web service E) Office software Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

138

72) The ability of a person booking a flight on Southwest.com's website to reserve a car from Dollar Rent-A-Car without having to leave the airline's website is an example of the usage by Dollar Rent-A-Car and Southwest Airlines of which of the following? A) Cloud computing B) Web services C) Nanotechnology D) SaaS E) PaaS Answer: B Difficulty: Challenging AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 73) HTML specifies how text, graphics, video, and sound are placed on a web page. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 74) HTML5 is the latest evolution of HTML and is designed to make it much easier to embed third-party add-ons in web pages. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 75) Web services can exchange information between two different systems regardless of the operating system or programming languages on which the systems are based. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends? 76) XML is limited to describing how data should be presented in the form of web pages, while HTML can perform presentation, communication, and storage of data. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-3: What are the major types of computer software used in business and the major software trends?

139

77) You are starting an Internet marketing and data mining company. What types of software can you anticipate needing, and what will these types of software be used for? Answer: I anticipate needing: • Operating system software for computers to run. • Desktop productivity software that include word processing software for document creation; spreadsheet software to organize, calculate, and model data; data management software to store, manipulate, and retrieve data; presentation graphics and desktop publishing software for marketing reports, and personal information management software to maintain a list of contacts, calendars, and tasks. • Email and web-browsers for daily communication and research. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-3: What are the major types of computer software used in business and the major software trends? 78) Identify and describe some of the current trends in contemporary software platforms. Answer: Current trends in software include open source software and cloud-based software services and tools, such as mashups and apps. One of the most influential software trends is the movement towards open source software. Open source software is developed by a community of programmers around the world, who make their programs available to users under one of several different licensing schemes. In cloud-based software, users access software tools and services over the Internet, as in the various Google Apps. Mashups combine the capabilities of two or more online applications to create a kind of hybrid that provides more customer value than the original sources alone. Apps are small pieces of software that run on the Internet, on your computer, mobile, or tablet, and are usually downloaded from the Internet. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-3: What are the major types of computer software used in business and the major software trends? 79) Identify and describe the leading PC and server operating systems. Answer: The five most widely used operating systems are Windows 10, Windows Server, UNIX, Linux, and macOS. Windows 10 is the traditional Windows client operating system and is now used on both mobile devices and traditional PCs. Windows Server is used for network servers as well as workstations and PCs and supports networking tasks. UNIX is used for PCs and network servers and was developed in the late 1960s to support communications and networking across large systems. UNIX is highly customizable. Linux is an open source variation of UNIX which has become popular as a low-cost alternative to UNIX as well as Windows. Linux powers as much as 35 percent of web servers worldwide. Apple's operating system is called macOS. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 5-3: What are the major types of computer software used in business and the major software trends?

140

80) refers to the ability of a system to expand to serve a larger number of users without breaking down. A) Capacity planning B) TCO C) Scalability D) Guaranteed levels of service E) SLA Answer: C Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 81) Which of the following would an IT department use to monitor, manage, and secure mobile devices deployed across the enterprise? A) TCO analysis B) MDM software C) An SLA D) Capacity planning tools E) SOA software Answer: B Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 82) To analyze the direct and indirect costs and determine the actual cost of specific technology implementations, you would use a: A) total cost of ownership model. B) return on investment model. C) break-even point. D) cost benefit analysis. E) capacity plan. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 5-4: What are the principal issues in managing hardware and software technology? 83) Translating software to different languages is commonly referred to as: A) software localization. B) scaling. C) service-oriented architecture. D) outsourcing. E) open sourcing. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 141

84) In order to manage their relationship with an outsourcer or technology service provider, firms need a contract that includes a(n): A) TCO. B) SOA. C) SLA. D) API. E) capacity plan. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 5-4: What are the principal issues in managing hardware and software technology? 85) In co-location, a firm: A) purchases and owns its web server but locates the server in the physical facility of a hosting service. B) contracts with an external vendor to run its computer center and networks. C) off-loads peak demand for computing power to remote, large-scale data centers. D) utilizes an external, distributed computing grid. E) uses only open source software to operate its computer systems. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 86) You use to predict when a computer hardware system becomes saturated. A) capacity planning B) virtualization C) localization D) measured service E) SLAs Answer: A Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 87) An analyst asked to perform capacity planning for a system would need to take into account all of the following factors except: A) the maximum number of users a system can accommodate at one time. B) the minimum response time for processing business transactions. C) the impact of future software applications. D) the purchase price of new computer hardware equipment. E) the volume of transactions. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 5-4: What are the principal issues in managing hardware and software technology? 142

88) An analyst asked to perform a TCO analysis for a system would need to take into account all of the following factors except: A) the minimum response time for processing business transactions. B) lost productivity if hardware or software failures cause the system to be unavailable for processing and user tasks. C) real estate and utility costs for housing and providing power for the technology. D) the purchase or license of software for each user. E) the cost to provide training to information systems specialists and end users. Answer: A Difficulty: Challenging AACSB: Analytical Thinking LO: 5-4: What are the principal issues in managing hardware and software technology? 89) The total cost of ownership refers to only the direct costs of owning hardware and software. Answer: FALSE Difficulty: Challenging AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 90) A service level agreement specifies the nature and level of services provided by service providers. Answer: TRUE Difficulty: Challenging AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 91) Allowing departments to make their own software and hardware purchases increases efficiency and minimizes the need for centralized support. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 92) Costs for downtime, training, and support are included when calculating total cost of ownership. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 93) Equipping employees with mobile devices reduces IT infrastructure integration and technical support costs. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 143

94) Software localization refers to the entire process of converting software to operate in a second language. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 5-4: What are the principal issues in managing hardware and software technology? 95) What is scalability? Why is it essential to the success of the modern business firm? Answer: Scalability is the ability of the computer, product, or system to expand to serve a larger number of users without breaking down. It is important because as firms grow, they can quickly outgrow their infrastructure. Any modern company must be able to make plans for the future, even though that future may be different than what was expected. Computer equipment is expensive, though dropping in price, and budgets must be planned to allow for new infrastructure and IT support. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology? 96) You are acting as financial consultant for a small design agency that will be creating client websites and which wants to purchase a web server so it can host the sites themselves. How will you advise the agency on this purchase? Answer: The agency should understand the concept or model of total cost of ownership: the costs will go beyond the cost of the server, but they will also need to purchase the server software, along with any application software they will be using. They will also need someone in their IT department to manage and maintain the computers. They will also incur facilities costs for running the computer. They need to have a backup plan should the server fail. The design agency will need to add up all the potential costs and risks. Additionally, they need to prepare for the possibility they may need more servers. Will they eventually have to run and maintain their own server farm? What about scalability? What if one of their clients' sites is more popular than anticipated and the server has difficulty handling the load? How quickly can they add servers or processing power? The company should look at co-location, web hosting services, and service providers to see if their needs will be better met this way. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology?

144

97) You have been given the task of creating localized versions of your company's software for overseas branches. What are your chief concerns? Answer: The software will have to be built in a local language interface. Menu bars, commands, error messages, reports, queries, online data entry forms, and system documentation may need to be translated into all the languages of the countries where the system will be used. To be truly useful for enhancing productivity of a global workforce, the software interfaces must be easily understood and mastered quickly. The entire process of converting software to operate in a second language is called software localization. Global systems must also consider differences in local cultures and business processes. Cross-functional systems such as enterprise and supply chain management systems are not always compatible with differences in languages, cultural heritages, and business processes in other countries. In a global systems environment, all of these factors add to the TCO and will influence decisions about whether to outsource or use technology service providers. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology? 98) Define outsourcing and explain some of the computing tasks that are well suited to outsourcing. Answer: Outsourcing is the shift of IT infrastructure and systems development to external vendors. This is a good option for companies without the resources or technical capability to perform certain computing tasks. Tasks well suited to outsourcing include website hosting, web design, development of custom software, and software maintenance. More basic tasks such as data entry and call center operation are often outsourced as well. Outsourcing often requires firms to enter into a service level agreement (SLA) that defines the specific responsibilities of the service provider. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology? 99) What are the components that must be considered in a TCO analysis? Answer: TCO cost components include hardware acquisition, which includes the purchase price of computer hardware equipment, including computers, terminals, storage, and printers; software acquisition, which includes the purchase or license of software for each user; installation, which includes the cost to install computers and software; training, which includes the cost to provide training to information systems specialists and end users; support, which includes the cost to provide ongoing technical support; maintenance, which includes the cost to upgrade hardware and software; infrastructure, which includes the cost to acquire, maintain, and support related infrastructure, such as networks and specialized equipment; downtime, which includes the cost of lost productivity if hardware or software failures cause the system to be unavailable; and space and energy, such as real estate and utility costs. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology?

145

100) What are some of the challenges companies face in managing the mobile platform? Answer: Today, employees want to be able to use a variety of personally owned mobile devices, including the iPad, iPhone, and Android handhelds, to access corporate systems such as email, databases, and applications. Gains in productivity from equipping employees with mobile computing devices must be balanced against increased costs from integrating these devices into the firm's IT infrastructure and providing technical support. For personal mobile devices to access company information, the company's networks must be configured to receive connections from that device. Firms need an efficient inventory management system that keeps track of which devices employees are using, where each device is, and what software is installed on it. They also need to know what pieces of corporate data are on those personal devices, and this is not always easy to determine. It is more difficult to protect the company's network and data when employees access them from their privately owned devices. If a device is stolen or compromised, companies need to ensure that sensitive or confidential company information isn't exposed. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 5-4: What are the principal issues in managing hardware and software technology? Essentials of MIS, 14e (Laudon/Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) From your reading of the chapter-opening case study, Domino's implemented a new data management platform in order to solve which of the following problems? A) Domino's revenue was declining. B) Domino's wanted to be able to capture more data. C) The entities and attributes of Domino's customer records were poorly organized. D) Domino's was unable to easily analyze data for a detailed understanding of its customers and their buying patterns. E) Domino's computer networks were outdated. Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 6-1: What is a database, and how does a relational database organize data? 2) In a business relational database, tables contain: A) one table for each entity. B) relations among entities. C) bytes. D) three-dimensional relations. E) links to other tables. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 3) Which of the following best illustrates the relationship between entities and attributes? A) The entity CUSTOMER with the attribute PRODUCT 146

B) The entity CUSTOMER with the attribute ADDRESS C) The entity PRODUCT with the attribute PURCHASE D) The entity PRODUCT with the attribute CUSTOMER E) The entity ADDRESS with the attribute CUSTOMER Answer: B Difficulty: Moderate AACSB: Analytical Thinking LO: 6-1: What is a database, and how does a relational database organize data?

147

4) Which of the following is the type of logical database model that treats data as if they were stored in two-dimensional tables? A) Two-tiered DBMS B) Pre-digital DBMS C) Open source DBMS D) Hierarchical DBMS E) Relational DBMS Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 5) What are the relationships that the relational database is named for? A) Relationships between rows and columns B) Relationships between entities C) Relationships between fields and records D) Relationships between databases E) Relationships between attributes Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 6) A characteristic or quality describing an entity is called a(n): A) field. B) tuple. C) key field. D) attribute. E) table. Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 7) The most basic business database is comprised of: A) three tables: for suppliers, parts, and sales. B) four tables: for customers, suppliers, parts, and sales. C) four tables: for customers, suppliers, sales, and employees. D) five tables: for customers, employees, suppliers, parts, and sales. E) attributes instead of tables. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data?

148

8) In a table for customers, the information about a single customer would reside in a single: A) field. B) entity. C) column. D) table. E) row. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 9) Relational databases organize data into two-dimensional tables, called columns and rows. A) tuples. B) key field C) attributes D) fields E) relations Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data?

with

10) A field identified in a table as holding the unique identifier of the table's records is called the: A) primary key. B) key field. C) primary field. D) foreign key. E) identifying field. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 11) A field identified in a record as holding the unique identifier for that record is called the: A) primary key. B) entity field. C) primary field. D) foreign key. E) identifying field. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data?

149

12) A schematic of the entire database that describes the relationships in a database is called a(n): A) data dictionary. B) intersection relationship diagram. C) field key diagram. D) data definition diagram. E) entity-relationship diagram. Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 13) A one-to-one relationship between two entities is symbolized in a diagram by a line that ends: A) in two short marks. B) in one short mark. C) with a crow's foot. D) with a crow's foot topped by a short mark. E) with a crow's foot topped by two short marks. Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 14) A one-to-many relationship between two entities is symbolized in a diagram by a line that ends: A) in two short marks. B) in one short mark. C) with a crow's foot. D) with a crow's foot preceded by a short mark. E) in three short marks. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data? 15) A table that links two tables that have a many-to-many relationship is often called a(n): A) derived table. B) intersection relation. C) foreign table. D) entity-relationship table. E) derived relation. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 6-1: What is a database, and how does a relational database organize data?

150

16) The process of streamlining data to minimize redundancy and awkward many-to-many relationships is called: A) normalization. B) data scrubbing. C) data cleansing. D) data administration. E) data management. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 17) Which of the following best describes the importance of creating an accurate data model for your business's database? A) It is not essential, as the data model itself is modified by the database continuously. B) It is critical, as without one, your data may be inaccurate, incomplete, or difficult to retrieve. C) It is essential, as table relationships cannot be created without an accurate data model. D) It is somewhat important, as the type of data model will define what kinds of data will be stored. E) It is unnecessary, as a well-designed database should not require one. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 18) You are working in the IT department of a small paper supply company and planning a new database that monitors employee benefits and productivity. What would be the relationship you need to establish between Employee_ID in the Employee table and Parking_spot_number in the Perks table? A) One-to-many B) One-to-one C) Many-to-many D) Many-to-one E) One-to-all Answer: B Difficulty: Moderate AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data?

151

19) As described in the chapter case, all of the following are benefits of Domino's new data management platform except the ability to: A) assess the buying patterns of each customer as an individual. B) cleanse data from different data sources. C) enrich data with data from third-party sources. D) assess the performance of individual stores and franchise groups. E) keep the data more secure. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 20) The smallest unit of data a computer can handle is called a: A) file. B) record. C) field. D) byte. E) bit. Answer: E Difficulty: Easy AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 21) A grouping of characters into a word, a group of words, or a complete number is called a byte. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 22) Every record in a file must contain at least one key field. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data? 23) A foreign key is a field that links to a separate table. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-1: What is a database, and how does a relational database organize data?

152

24) A small publishing company that you work for would like to develop a database that keeps track of the contracts that authors and publishers sign before starting a book. What fields do you anticipate needing for this database? Identify at least seven fields. Which of these fields might be in use in other databases within the firm? Answer: Author first name, author last name, author address, agent name, agent address, title of book, book ISBN, date of contract, amount of money, payment schedule, date contract ends. Other databases might be an author database (author names, address, and agent details), a book title database (title and ISBN of book), and financial database (payments made). Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 6-1: What is a database, and how does a relational database organize data? 25) What types of relationships are possible in a relational database? Describe and give an example of each. Answer: There are three types of relationships: one-to-one, one-to-many, and many-to-many. A one-to-one relationship occurs when each record in one table has only one related record in a second table. An example might be a table of salespeople and a separate table of company cars. Each salesperson can only have one car or be related to the one car in the database. A one-tomany relationship occurs when a record in one table has many related records in a second table. An example might be a table of salespeople and clients. Each salesperson may have several clients. A many-to-many relationship occurs when records in one table have many related records in a second table, and the records in the second table have many related records in the first table. An example might be a Clients table and a Products table. Clients may buy more than one product, and products are sold to more than one client. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-1: What is a database, and how does a relational database organize data? 26) The small publishing company you work for wants to create a new database for storing information about their author contracts. What difficulties do you anticipate? Answer: Data accuracy when the new data is input, establishing a good data model, determining which data is important and anticipating what the possible uses for the data will be, beyond looking up contract information, technical difficulties linking this system to existing systems, new business processes for data input and handling, and contracts management, determining how end users will use the data, making data definitions consistent with other databases, what methods to use to cleanse the data. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 6-1: What is a database, and how does a relational database organize data?

153

27) A DBMS makes the: A) relational database available for different analytical views. B) logical database available for different analytical views. C) physical database available for different relational views. D) relational database available for different physical views. E) physical database available for different logical views. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 28) The logical view of a database: A) shows how data are organized and structured on the storage media. B) presents an entry screen to the user. C) allows the creation of supplementary reports. D) presents data as they would be perceived by end users. E) shows the relationships between entities and attributes. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 29) Which of the following allows users to add, change, delete, or retrieve data in a database? A) Attribute generation B) Report generation tools C) Data dictionary D) Query wizard tool E) Data manipulation language Answer: E Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 30) In a relational database, the three basic operations used to develop useful sets of data are: A) select, project, and where. B) select, join, and where. C) select, project, and join. D) select, from, and join. E) who, what, and where. Answer: C Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system?

154

31) The select operation: A) combines relational tables to provide the user with more information than is otherwise available. B) creates a subset consisting of columns in a table. C) identifies the table from which the columns will be selected. D) creates a subset consisting of all records in the file that meet stated criteria. E) specifies the content of the database. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 32) The project operation: A) combines relational tables to provide the user with more information than is otherwise available. B) creates a subset consisting of columns in a table. C) organizes elements into segments. D) identifies the table from which the columns will be selected. E) stores definitions of data elements. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 33) Which of the following is an automated or manual file that stores information about data elements and data characteristics such as usage, physical representation, ownership, authorization, and security? A) Referential integrity module B) Data definition diagram C) Entity-relationship diagram D) Relationship dictionary E) Data dictionary Answer: E Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 34) Which of the following is the most prominent data manipulation language today? A) Access B) DB2 C) SQL D) Crystal Reports E) Hadoop Answer: C Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 155

35) Nonrelational databases: A) store information in an unstructured format. B) use rows and columns to organize data. C) are used to store structured and unstructured data. D) are used to store low volumes of transactional data. E) use database-mapping to normalize relations. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 36) DBMS typically include report-generating tools in order to: A) retrieve and display data. B) display data in tables. C) display data in graphs. D) perform predictive analysis. E) display data in an easier-to-read-format. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 37) MongoDB and SimpleDB are both examples of: A) open source databases. B) SQL databases. C) NoSQL databases. D) cloud databases. E) big data databases. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 38) Both Oracle and Microsoft Access use SQL to retrieve information from a database. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 39) DBMS simplify how end users work with databases by separating the logical and physical views of the data. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 156

40) Microsoft Access is a database management system for large mainframe computers. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 41) A logical view of data shows data as it is organized on the storage media. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 42) The select operation in a relational database joins records from different tables. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 6-2: What are the principles of a database management system? 43) Identify and describe the three basic operations used to extract useful sets of data from a relational database. Answer: The select operation creates a subset consisting of all records (rows) in the table that meet stated criteria. The join operation combines relational tables to provide the user with more information than is available in individual tables. The project operation creates a subset consisting of columns in a table, permitting the user to create new tables that contain only the information required. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 6-2: What are the principles of a database management system? 44) Describe the process of querying and reporting in a database using DBMS. Answer: DBMS include tools for accessing and manipulating information in databases. A data manipulation language is used to handle data in the database–adding, changing, deleting, and retrieving data. Structured Query Language (SQL) is the most common data manipulation language in use today. DBMS also include the ability to generate reports to display information in a more accessible format using a report generator. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-2: What are the principles of a database management system?

157

45) What are some of the benefits of using the cloud as a database platform? Answer: Cloud-based data management services are ideal for smaller to medium-sized businesses looking to establish database capabilities without paying for expensive in-house database products. Companies can use a public cloud-based service or they can use a private cloud to share hardware and software between users, reducing the number of servers, DBMS, and storage devices required. Difficulty: Easy AACSB: Information Technology; Written and Oral Communication LO: 6-2: What are the principles of a database management system? 46) A is a repository for raw unstructured data or structured data that for the most part have not yet been analyzed. A) data mart B) data warehouse C) dashboard D) data lake E) relational DBMS Answer: D Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 47) Data mining tools use clustering to find: A) new groupings within data. B) related predictions from existing values. C) several events grouped by time. D) new associations. E) forecasts for future events. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 48) Big data refers to any database that: A) contains more than one petabyte of data. B) discovers patterns in data. C) has a large volume and variety of data. D) includes data from thousands of websites. E) stores data in rows and columns. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 158

49) Data mining is more than OLAP. A) data-focused B) multidimensional C) query-oriented D) discovery-driven E) streamlined Answer: D Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 50) All of the following are tools or technologies for extracting information from unstructured data sets except: A) sentiment analysis software. B) SQL queries. C) Hadoop. D) a nonrelational DBMS. E) text mining. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 51) Which of the following database types would be best suited for storing unstructured audio and video data? A) SQL DBMS B) Open source DBMS C) HBase D) Cloud-based database E) NoSQL DBMS Answer: C Difficulty: Challenging AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

159

52) Pre-configured hardware-software systems that use both relational and nonrelational technology optimized for analyzing large data sets are referred to as: A) hybrid DBMS. B) Hadoop. C) BI. D) analytic platforms. E) data marts. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 53) Which of the following statements about data warehouses is not true? A) They store supply data to be used across the enterprise for management analysis and decision making. B) Data warehouse systems provide a range of ad hoc and standardized query tools, analytical tools, and graphical reporting facilities. C) They may include data from website transactions. D) Data warehouse systems provide easy-to-use tools for managers to easily update data. E) Data warehouses make data available for anyone to access as needed. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 54) A data mart usually can be constructed more rapidly and at lower cost than a data warehouse because: A) it typically focuses on a single subject area or line of business. B) all the information is historical. C) it uses a web interface. D) all of the information belongs to a single company. E) it is created using open-source software. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

160

55) Capabilities and tools to manage and analyze large quantities and different types of data from multiple sources are collectively known as: A) DSS. B) business intelligence infrastructure. C) OLAP. D) data mining. E) in-memory computing. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 56) Which of the following enables users to view the same data in different ways using multiple dimensions? A) Hadoop B) SQL C) Big data D) Data mining E) OLAP Answer: E Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 57) OLAP is a tool that enables users to: A) rapidly obtain online answers to ad hoc questions. B) view both logical and physical views of data. C) quickly diagram data relationships. D) normalize data. E) find hidden patterns in large databases. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

161

58) Data mining is a tool for allowing users to: A) quickly compare transaction data gathered over many years. B) perform multidimensional data analysis. C) obtain online answers to ad hoc questions in a rapid amount of time. D) summarize massive amounts of data into much smaller, traditional reports. E) find hidden relationships in data. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 59) In terms of the data relationships found by data mining, associations refer to: A) events linked over time. B) patterns that describe a group to which an item belongs. C) occurrences linked to a single event. D) undiscovered groupings. E) classification when no groups have yet been defined. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 60) In terms of the data relationships found by data mining, sequences refer to: A) events linked over time. B) patterns that describe a group to which an item belongs. C) occurrences linked to a single event. D) undiscovered groupings. E) classifications when no groups have yet been defined. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

162

61) Which of the following would you use to find patterns in user interaction data recorded by web servers? A) Web usage mining B) Web server mining C) Web structure mining D) Web content mining E) Web protocol mining Answer: A Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 62) Which of the following would you use to find out which websites with content related to database design were the most often linked to by other websites? A) Web usage mining B) Web server mining C) Web structure mining D) Web content mining E) Web protocol mining Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 63) Businesses use tools to search and analyze unstructured data sets, such as emails and memos. A) Hadoop B) web mining C) text mining D) OLAP E) DBMS Answer: C Difficulty: Easy AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

163

64) Hadoop is a(n): A) NoSQL database technology that stores both data and procedures acting on the data as objects. B) data mining platform designed for storing and analyzing big data produced by web communications and transactions. C) open source software framework designed for distributing data-processing over inexpensive computers. D) pre-configured hardware-software system designed for analyzing big data. E) high-speed platform used to analyze large data sets. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 65) A data stores current and historical data of potential interest to decision makers throughout the company. A) warehouse B) mart C) archive D) mine E) center Answer: A Difficulty: Easy AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 66) A(n) is a dedicated computer in a client/server environment that hosts a DBMS. A) web server B) online server C) database server D) client server E) application server Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

164

67) Which of the following is an example of a company whose business model is based on access to large databases through the web? A) Gartner B) Fortune C) IBM D) Microsoft E) Facebook Answer: E Difficulty: Easy AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 68) Links pointing to an online document are a sign of: A) richness or variety of topics covered. B) popularity. C) data quality. D) data usage. E) marketing. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 69) Links coming out of an online document are a sign of: A) richness or variety of topics covered. B) popularity. C) data quality. D) data usage. E) marketing. Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 70) Text mining is the discovery of useful patterns on the web. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

165

71) Sentiment analysis is used to identify patterns in blogs and social media conversations to detect favorable and unfavorable comments. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 72) Hadoop is an open source software framework for processing large quantities of any type of data, including video and Twitter feeds. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 73) Two key services of Hadoop are HDFS and MapReduce. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 74) A data warehouse is best used for storing unstructured data. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 75) A data warehouse extracts current and historical data from multiple operational systems in an organization. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 76) OLAP enables users to view data from different perspectives. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

166

77) OLAP is used to quickly find answers to ad hoc questions. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 78) In-memory computing relies on a computer's main memory for storing data. Answer: TRUE Difficulty: Challenging AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 79) Web servers can directly access a firm's back-end databases using HTML. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 80) Facebook is an example of a business based on access to large databases through the web. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 81) In linking databases to the web, the role of the application server is to host the DBMS. Answer: FALSE Difficulty: Challenging AACSB: Information Technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

167

82) List and describe three main capabilities or tools of a DBMS. Answer: A DBMS includes capabilities and tools for organizing, managing, and accessing the data in the database. The most important are its data definition capability, data dictionary, and data manipulation language. The data definition capability specifies the structure of the content of the database. It is used to create database tables and to define the characteristics of the fields in each table. This information about the database would be documented in a data dictionary. A data dictionary is an automated or manual file that stores definitions of data elements and their characteristics. Data dictionaries for large corporate databases may capture additional information, such as usage; ownership (who in the organization is responsible for maintaining the data); authorization; security; and the individuals, business functions, programs, and reports that use each data element. The data manipulation language is a specialized language used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 83) Describe the ways in which database technologies could be used by an office stationery supply company to achieve low-cost leadership. Answer: Student answers will vary; an example answer is: Databases could be used to make the supply chain more efficient and minimize warehousing and transportation costs. You can use OLAP to better analyze sales forecasts. You can also use sales databases and predictive analysis to determine what supplies are in demand by which customers, and whether needs are different in different geographical areas. DSS databases could be used to predict future trends in office supply needs, to help anticipate demand. You could use text mining to identify service issues or inefficiencies within the company. Databases could be used to determine the most efficient methods of transportation and delivery. In addition, you could allow customers to order supplies through the web and have these orders influence the entire supply chain and minimize warehousing costs. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

168

84) Explain what big data refers to. What benefits does it have, and what challenges does it pose? Answer: Big data are datasets with volumes so huge that they are beyond the ability of typical DBMS to capture, store, and analyze. Big data is often characterized by the "3Vs": the extreme volume of data, the wide variety of data types and sources, and the velocity at which the data must be processed. Big data doesn't designate any specific quantity but usually refers to data in the petabyte and exabyte range–in other words, billions to trillions of records, respectively, from different sources. Big data are produced in much larger quantities and much more rapidly than traditional data. It is created by the explosion of data coming from the web, such as web traffic, email, Twitter, and Facebook, as well as information from other electronic and networked devices such as sensors and meters. Businesses are interested in big data because they contain more patterns and interesting anomalies than smaller data sets, with the potential to provide new insights into customer behavior, weather patterns, financial market activity, or other phenomena. However, to derive business value from these data, organizations need new technologies and tools capable of managing and analyzing non-traditional data along with their traditional enterprise data. They also need to know what questions to ask of the data and limitations of big data. Capturing, storing, and analyzing big data can be expensive, and information from big data may not necessarily help decision makers. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 85) What are the differences between data mining and OLAP? When would you advise a company to use OLAP? Answer: Data mining uncovers hidden relationships and is used when you are trying to discover data and new relationships, and is used to answer questions such as, are there any product sales that are related in time to other product sales. In contrast, OLAP is used to analyze multiple dimensions of data and is used to find answers to complex, but known, questions, such as sales of a product broken down by month and geographical region, and compared to sales forecasts. I would advise a company to use OLAP when they need to analyze sales in different areas or for different products to see complex views of data. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

169

86) What makes data mining an important business tool? What types of information does data mining produce? In what type of circumstance would you advise a company to use data mining? Answer: Data mining is one of the data analysis tools that helps users make better business decisions and is one of the key tools of business intelligence. Data mining allows users to analyze large amounts of data and find hidden relationships between data that otherwise would not be discovered. For example, data mining might find that a customer that buys product X is ten times more likely to buy product Y than other customers. Data mining finds information such as: • Associations, or occurrences that are linked to a single event. • Sequences, or events that are linked over time. • Classifications, or patterns that describe the group to which an item belongs, found by examining existing items that have been classified and by inferring a set of rules. • Clusters, or unclassified but related groups. • Forecasts, using a series of existing values to predict what other values will be. I would advise a company to use data mining when they are looking for new products and services, or when they are looking for new marketing techniques or new markets. Data mining might also be helpful when trying to analyze unanticipated problems with sales whose causes are difficult to identify. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 87) What are the similarities and differences between a data warehouse and a data mart? Answer: A data warehouse stores current and historical data of potential interest throughout a company. Data warehouses gather data from multiple operational systems inside the organization. Data warehouses make data available, but do not allow that information to be altered. Data marts are subsets of data warehouses, in which a highly focused portion of an organization's data is placed in a separate database for specific users. Data marts are decentralized, whereas data warehouses are enterprise-wide, central locations for data. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

170

88) Imagine you are running a growing business with an active presence on social media. How would you better understand what your customers think about your business using these platforms? Answer: Text mining and web mining techniques would help a business in this situation. Using text mining tools, businesses can analyze transcripts of calls, texts of email messages, blogs, and social media posts using sentiment analysis, or survey forms, gleaning valuable information about customer opinions on specific topics. web mining involves similar techniques but using web pages and Google search results as the source of data. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 89) All of the following are elements of a data governance policy except identifying: A) which users and organizational units can share information. B) where information can be distributed. C) who is responsible for updating and maintaining information. D) how data resources should be secured. E) the structure of the company's database. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 90) Which of the following establishes rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information? A) Data cleansing B) Data mining C) Data governance D) Logical database design E) Data quality audit Answer: C Difficulty: Moderate AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

171

91) Detecting and correcting data in a database or file that are incorrect, incomplete, improperly formatted, or redundant is called: A) data auditing. B) defragmentation. C) data scrubbing. D) data optimization. E) data repair. Answer: C Difficulty: Easy AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 92) A is a structured survey of the accuracy and level of completeness of the data in an information system. A) data quality audit B) systems analysis C) systems audit D) data analysis E) data overview Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 93) Common data quality problems include all of the following except: A) misspelled names. B) transposed numbers. C) incorrect codes. D) missing codes. E) Internet connectivity problems. Answer: E Difficulty: Easy AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 94) Data governance establishes the organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

172

95) Redundant data often stems from the use of different codes to identify the same data in a firm's various information systems. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 96) Data cleansing is the same process as data scrubbing. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 97) A data governance policy specifies the procedures and rules for defining the content of corporate databases. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 98) Gartner Inc. reported that about 10 percent of the critical data in large Fortune 1000 companies' databases is inaccurate or incomplete. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? 99) List at least two ways that a business's data can become redundant or inconsistent. Answer: Data redundancy and inconsistency can occur because of (1) employing different names and descriptions for the same entities or attributes; (2) multiple systems feeding a data warehouse; (3) incorrect data entry. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

173

100) Why might you receive multiple pieces of the same piece of mail, or multiple emails featuring the same promotion? Answer: These events often occur because of redundant information in a database. If you used your middle initial one time and not another, it might generate two entries for you, leading to extra advertising. These types of errors are caused by data input and are becoming more frequent as companies migrate to the web and allow individuals to enter their own data into websites. Organizations must identify and correct this type of error using a data quality audit and by performing data cleansing. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources? Essentials of MIS, 14e (Laudon/Laudon) Chapter 7 Telecommunications, the Internet, and Wireless Technology 1) Which of the following is a device that sends packets of data through different networks ensuring they go to the correct address? A) Hub B) Switch C) Router D) NIC E) Modem Answer: C Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 2) The Internet is based on which three key technologies? A) TCP/IP, HTML, and HTTP B) TCP/IP, HTTP, and packet switching C) Client/server computing, packet switching, and the development of communications standards for linking networks and computers D) Client/server computing, packet switching, and HTTP E) Email, instant messaging, and newsgroups Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 3) Which of the following involves slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations? A) Multiplexing B) Packet shifting C) Packet routing 174

D) ATM E) Packet switching Answer: E Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

175

4) The telephone system is an example of a network. A) peer-to-peer B) wireless C) packet-switched D) circuit-switched E) client/server Answer: D Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 5) Which of the following is not a characteristic of packet switching? A) Packets travel independently of each other. B) Packets are routed through many different paths. C) Packet switching requires point-to-point circuits. D) Packets include data for checking transmission errors. E) Packets are reassembled into the original message when they reach their destinations. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 6) In TCP/IP, IP is responsible for which of the following? A) Disassembling and reassembling packets during transmission B) Establishing an Internet connection between two computers C) Moving packets over the network D) Sequencing the transfer of packets E) Breaking messages down into packets Answer: A Difficulty: Challenging AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

176

7) Which of the following is the best description of a protocol in a telecommunications network architecture? A) A device that handles the switching of voice and data in a local area network B) A standard set of rules and procedures for control of communications in a network C) A communications service for microcomputer users D) The main computer in a telecommunications network E) A pathway through which packets are routed Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 8) What are the four layers of the TCP/IP reference model? A) Physical, Application, Transport, and Network Interface B) Physical, Application, Internet, and Network Interface C) Application, Transport, Internet, and Network Interface D) Application, Hardware, Internet, and Network Interface E) Software, Hardware, Network Interface, Internet Answer: C Difficulty: Challenging AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 9) On which of the following protocols is the Internet based? A) TCP/IP B) FTP C) IMAP D) HTTP E) DNS Answer: A Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

177

10) Client/server computing is a: A) network that connects sensors to desktop computers. B) network where centralized mainframe computers serve local devices. C) centralized model of computing for large corporations. D) distributed computing model where clients are linked to one another through a network that is controlled by a network server computer. E) centralized computing model where local computers are connected to one another by a network. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 11) Computer networks are based on the same principles as telephone networks. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 12) A NOS must reside on all the local computers in a network. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 13) A hub is a networking device that sends packets of data to all other devices on the network. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 14) In a client/server network, the client sets the rules of communication for the network. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

178

15) A computer network requires at least three computers. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 16) Client/server computing has largely replaced centralized mainframe computing. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 17) Computer networks that use packet switching are less efficient than telephone networks that use circuit switching. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 18) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 19) In a large company today, you will often find an infrastructure that includes a large number of small LANs linked to each other as well as to corporate-wide networks. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 20) TCP/IP was developed during the early 1970s to support efforts to help scientists transmit data among different types of computers over long distances. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

179

21) How does packet switching work? Answer: Packet switching is a method of slicing digital messages into parcels called packets, sending the packets along different communication paths as they become available, and then reassembling the packets once they arrive at their destinations. Packet switching makes much more efficient use of the communications capacity of a network than did circuit-switching. In packet-switched networks, messages are first broken down into small fixed bundles of data called packets. The packets include information for directing the packet to the right address and for checking transmission errors along with the data. The packets are transmitted over various communication channels using routers, each packet traveling independently. Packets of data originating at one source will be routed through many different paths and networks before being reassembled into the original message when they reach their destinations. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 22) Identify the layers of the Department of Defense reference model for TCP/IP and describe how this model works. Answer: The application layer enables client application programs to access the other layers and defines the protocols that applications use to exchange data. One of these application protocols is the Hypertext Transfer Protocol (HTTP), which is used to transfer Web page files. The transport layer is responsible for providing the application layer with communication and packet services. This layer includes TCP and other protocols. The Internet layer is responsible for addressing, routing, and packaging data packets called IP datagrams. The Internet Protocol is one of the protocols used in this layer. The network interface layer is responsible for placing packets on and receiving them from the network medium, which could be any networking technology. Data sent from one computer to the other passes downward through all four layers, starting with the sending computer's application layer and passing through the network interface layer. After the data reach the recipient host computer, they travel up the layers and are reassembled into a format the receiving computer can use. If the receiving computer finds a damaged packet, it asks the sending computer to retransmit it. This process is reversed when the receiving computer responds. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

180

23) How are modern telephone and computer networks different from what firms used in the past? Answer: Modern telephone and computer networks are converging into a single digital network using shared Internet-based standards and technology. Telecom companies offer full suites of telecommunication and Internet service. In the past, these two types of networks were distinct— telephone networks and computer networks performed completely different services and were not affiliated with one another. Additionally, modern communication networks are much faster and more cost effective than they were in the past. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies? 24) Which signal types are represented by a continuous waveform? A) Laser B) Optical C) Digital D) RFID E) Analog Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 25) Which of the following is a device that makes possible the translation of digital signals to analog sound signals used by a computer network? A) Local area network B) Modem C) DSL D) Twisted wire E) TCP/IP Answer: B Difficulty: Easy AACSB: Information Technology LO: 7-2: What are the different types of networks? 26) Which type of network is used to connect digital devices within a city or metropolitan area? A) Wi-Fi B) LAN C) WAN D) MAN E) SAN Answer: D Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 181

27) Which type of network treats all processors equally and allows peripheral devices to be shared without going to a separate server? A) MAN B) Wireless C) LAN D) Windows domain network E) Peer-to-peer Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 28) Which type of network would be most appropriate for a business comprised of three employees and a manager located in the same office space, whose primary need is to share documents? A) MAN B) Domain-based LAN C) Peer-to-peer network D) WAN E) SAN Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 7-2: What are the different types of networks? 29) A network that spans a college or corporate facility is called a: A) CAN. B) MAN. C) LAN. D) WAN. E) WSN. Answer: A Difficulty: Easy AACSB: Information Technology LO: 7-2: What are the different types of networks? 30) A network that covers entire geographical regions is most commonly referred to as a(n): A) local area network. B) intranet. C) peer-to-peer network. D) wide area network. E) metropolitan area network. Answer: D Difficulty: Easy AACSB: Information Technology LO: 7-2: What are the different types of networks? 182

31) Bandwidth is the: A) number of frequencies that can be broadcast through a medium. B) number of cycles per second that can be sent through a medium. C) difference between the highest and lowest frequencies that can be accommodated on a single channel. D) total number of bytes that can be sent through a medium per second. E) geographical distance spanned by a network. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 32) The total amount of digital information that can be transmitted through any telecommunications medium is measured in: A) bps. B) Hertz. C) baud. D) gigaflops. E) RPMs. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 33) A(n) signal is a discrete, binary waveform that transmits data coded into two discrete states: 1-bits and 0-bits. A) modulated B) broadband C) T1 D) analog E) digital Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 34) Coaxial cable is similar to that used for cable television and consists of thickly insulated copper wire. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks?

183

35) Fiber-optic cable is less expensive and easier to install than wireless media. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 36) Bandwidth refers to the range of frequencies that can be transmitted by a telecommunications channel. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-2: What are the different types of networks? 37) You have been hired by a small new web design firm to set up a network for its single office location. The network is primarily needed for exchanging files, accessing and managing beta websites on their web server, and connecting to the Internet. The firm hires many freelancers who come into the office on an ad-hoc basis and it does not have a lot of money to spend on infrastructure. What type of network will you recommend? Answer: Student answers will vary. An example answer is: I would recommend a mixed wired and wireless network. The wired LAN would connect the web servers and primary workstations and connect via cable service to the Internet. Freelancers could connect wirelessly via access points. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 7-2: What are the different types of networks? 38) What are the two types of signals used to communicate a message in a network and how are they different? What device converts one type to the other type? Answer: The two ways to communicate a message in a network are analog signals and digital signals. An analog signal is represented by a continuous waveform that passes through a communications medium and is used for voice communication. Examples include the telephone handset and other types of speakers that generate analog sound. On the other hand, digital signals are binary waveforms (not continuous) that communicate information as strings of two discrete states: one bit or zero bits (often depicted as strings of zeroes and ones). Computers use these types of signals and use modems to convert digital signals to analog signals. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-2: What are the different types of networks?

184

39) What are some of the common types of physical transmission media and what differentiates them from one another? Answer: Common types of physical transmission media include twisted pair wire, coaxial cable, fiber-optic cable, and wireless transmission media. Twisted pair wire consists of strands of copper wire twisted in pairs for voice and data communications. Coaxial cable consists of thickly insulated copper wires capable of high-speed data transmission and resistance to interference. Fiber-optic cable consists of strands of clear glass fiber that transmit data as pulses of light generated by lasers. Wireless transmission media is based on radio signals and involves satellite microwave systems and cellular networks. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-2: What are the different types of networks? 40) Which of the following is not one of the top five search engines? A) Facebook B) Yahoo C) Microsoft Bing D) Baidu E) Google Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 41) Digital subscriber lines: A) operate over existing telephone lines to carry voice, data, and video. B) operate over coaxial cable lines to deliver Internet access. C) are very-high-speed data lines typically leased from long-distance telephone companies. D) have up to twenty-four 64-Kbps channels. E) are assigned to every computer on the Internet. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

185

42) T1 and T3 lines: A) operate over existing telephone lines to carry voice, data, and video. B) operate over coaxial lines to deliver Internet access. C) do not provide guaranteed service levels, but simply "best effort." D) have up to twenty-four 64-Kbps channels. E) are high-speed, leased data lines providing guaranteed service levels. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 43) What service converts natural language names to IP addresses? A) HTML B) FTP C) IP D) HTTP E) DNS Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 44) The domain .gov is a(n): A) Internet root domain. B) top-level domain. C) host domain. D) network domain. E) third level domain. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 45) In the domain name "http://books.pearson.com," which element is the second-level domain? A) books B) pearson.com C) com D) books.pearson E) none; there is no second-level domain in this name Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 186

46) Which organization manages the domain name system of the Internet? A) none (no one "owns" the Internet) B) W3C C) ICANN D) The Department of Commerce (U.S.) E) IAB Answer: C Difficulty: Challenging AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 47) IPv6 has been developed in order to: A) update the packet transmission protocols for higher bandwidth. B) create more IP addresses. C) allow for different levels of service. D) support Internet2. E) reduce excess IP addresses. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 48) Predictive search in Google's search engine: A) maintains a history of your searches and then predicts what you will search on next. B) uses a tracking service and cookies on your browser to predict search results. C) uses a knowledge graph of what similar people searched on to predict your search interests. D) uses a semantic approach to predict what you are looking for. E) predicts what you are looking for as you enter words into the query box. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

187

49) Instant messaging is a type of service. A) chat B) cellular C) email D) wireless E) network Answer: A Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 50) integrate disparate channels for voice communications, data communications, instant messaging, email, and electronic conferencing into a single experience. A) Wireless networks B) Intranets C) Virtual private networks D) Modems E) Unified communications Answer: E Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 51) A VPN: A) is an encrypted private network configured within a public network. B) is more expensive than a dedicated network. C) provides secure, encrypted communications using Telnet. D) is an Internet-based service for delivering voice communications. E) is a proprietary networking service technology developed by individual corporations. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

188

52) Web browser software requests web pages from the Internet using which of the following protocols? A) URL B) HTTP C) DNS D) HTML E) FTP Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 53) Together, a protocol prefix, a domain name, a directory path, and a document name, are called a(n): A) uniform resource locator. B) IP address. C) third-level domain. D) root domain. E) child domain. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 54) The most common web servers today are: A) Microsoft IIS and IBM HTTP Server. B) WebSTAR and Netscape Server. C) IBM HTTP Server and Apache HTTP Server. D) Netscape Server and Apache HTTP. E) Apache HTTP Server and Microsoft IIS. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

189

55) Which of the following pulls content from websites and feeds it automatically to a user's computers? A) FTP B) RSS C) HTTP D) Bluetooth E) IPv6 Answer: B Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 56) Which of the following can be used to help a website achieve a higher ranking with the major search engines? A) VPN B) IAB C) SEM D) SEO E) RSS Answer: D Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 57) Which of the following statements is not true about search engines? A) They are arguably the Internet's "killer app." B) They have solved the problem of how users instantly find information on the Internet. C) They are monetized almost exclusively by search engine marketing. D) There are hundreds of search engines vying for user attention, with no clear leader having yet emerged. E) Users are increasingly using search engines on mobile devices. Answer: D Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

190

58) Which process is used to protect transmitted data in a VPN? A) Tunneling B) PPP C) VOIP D) Packet-switching E) Chaining Answer: A Difficulty: Challenging AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 59) monetizes the value of the data stored by search engines. A) TCP/IP B) RSS C) WiMax D) IoT E) Search Engine Marketing Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 60) Shopping bots use software for searching the Internet. A) Web 2.0 B) Web 3.0 C) intelligent agent D) comparison E) SEO Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 61) Which one of the following statements is not true? A) The Internet backbone is owned by the federal government in the United States. B) ICANN manages the domain name system. C) The IAB establishes the overall structure of the Internet. D) The Internet must conform to laws where it operates. E) W3C determines programming standards for the Internet. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 191

62) A(n) is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers. A) RSS B) WAN C) NFP D) ISP E) FTP Answer: D Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 63) The backbone networks of the Internet are typically owned by long-distance telephone companies called: A) regional network providers. B) enhanced service providers. C) internet bulk providers. D) backbone providers. E) network service providers. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 64) A is software for locating and managing stored web pages. A) web server B) net server C) router D) modem E) hub Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

192

65) The concept of a future web in which it is commonplace for everyday objects to be connected, controlled, or monitored over the Internet is called: A) the Internet of Things. B) the Semantic Web. C) Internet2. D) a 3-D Web. E) Web 2.0. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 66) In 2019, it is estimated that 215 million Americans used mobile search. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 67) Wikis allow visitors to change or add to the original posted material. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 68) The Domain Name System (DNS) converts domain names to IP addresses. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 69) VoIP technology delivers voice information in digital form using packet switching. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

193

70) The dark web is intentionally hidden from search engines and is accessible only with a special web browser. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 71) Mobile search makes up about 25 percent of all Internet searches. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 72) The Internet of Things refers to a vision of a pervasive Web, in which common objects are connected to and controlled over the Internet. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 73) DNS has a hierarchical structure. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 74) In addition to being an online retailer, Amazon is also a powerful product search engine. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 75) The Internet of Things is based on billions of Internet-connected sensors throughout the physical world. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

194

76) What is IPv6 and why is it necessary? Answer: The Internet was not originally designed to handle the transmission of massive quantities of data and billions of users. Because of sheer Internet population growth, the world is about to run out of available IP addresses using the old addressing convention. The old addressing system is being replaced by a new version of the IP addressing schema called IPv6 (Internet Protocol version 6), which contains 128-bit addresses (2 to the power of 128), or more than a quadrillion possible unique addresses. IPv6 is compatible with most modems and routers sold today, and IPv6 will fall back to the old addressing system if IPv6 is not available on local networks. The transition to IPv6 will take several years as systems replace older equipment. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 77) What are the business advantages of using voice over IP (VoIP) technology? Answer: Business can lower costs by using the Internet to deliver voice information, avoiding the tolls charged by local and long-distance telephone networks. They can lower costs from not having to create a separate telephone network. VOIP enables communication by supporting Internet conference calls using video. VOIP also provides flexibility–phones can be added or moved to different offices without rewiring or reconfiguring the network. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

195

78) What are some of the key features of the future Web and Internet? Answer: The key features of the future Web and Internet are more tools for individuals to make sense out of the trillions of pages on the Internet, or the millions of apps available for smartphones and a visual, even three-dimensional (3D) web where you can walk through pages in a 3D environment. Even closer in time is a pervasive web that controls everything from a city's traffic lights and water usage, to the lights in your living room, to your car's rear-view mirror, not to mention managing your calendar and appointments. This is referred to as the Internet of Things (IoT) and is based on billions of Internet-connected sensors throughout our physical world. Objects, animals, or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. The App Internet is another element in the future web. The growth of apps within the mobile platform is astounding. More than 80 percent of mobile minutes in the United States are generated through apps, as opposed to browsers. Apps give users direct access to content and are much faster than loading a browser and searching for content. Other complementary trends leading toward a future web include more widespread use of cloud computing and software as a service (SaaS) business models, ubiquitous connectivity among mobile platforms and Internet access devices, and the transformation of the web from a network of separate siloed applications and content into a more seamless and interoperable whole. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 79) Blogs, wikis, and social networking sites were designed for individuals to communicate with each other. What uses do businesses have for these tools? Give specific examples. Answer: Businesses can use these tools to reach out and market to potential new customers. For example, many businesses have Facebook sites to market their product to specific groups on Facebook. They can use these tools to support and give added value to existing customers. For example, a software company could have a blog that discusses in-depth use of a software product. Businesses can also use these tools within their company to communicate between departments and share knowledge. For example, a company wiki could be set up as a repository of expert information. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

196

80) What has made the Google search engine so successful? Answer: The Google search engine became so successful because it was one of the first search engines to incorporate page ranking. Not only does it index the web pages it finds according to both keywords and combinations of keywords, it also ranks each page according to the number of pages that link to it, and the number of pages it links to itself. This helped make search results more relevant when compared to search engines relying solely on key words used on web pages. A user could be relatively certain that they would find relevant information within the top results of a Google search. Improved search results for the user, along with continual improvements to its search engine, the development and other web applications, tools, and its Ad Sense product where it sells keywords to the highest bidder has made Google so successful as a search engine and marketing firm. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 81) Explain the Domain Name System. What are some of the common domain name extensions currently available and what types of services do they designate? Answer: The Domain Name System (DNS) converts domain names to IP addresses. Domain names are the English-like names that correspond to the unique 32-bit numeric IP address for each computer connected to the Internet. DNS is a hierarchy, with the root domain at the top, top-level domains such as .com and .edu one level below, and second-level domains designate a top-level name and a second-level name, like amazon.com. Common domain name extensions include .edu (educational institutions), .gov (government agencies), .mil (military), .net (network computers), .org (nonprofit organizations and foundations), .biz (business firms), and .info (information providers). Additionally, countries have their own domain names. Answers may cite a variety of other domain name extensions. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business? 82) All of the following are physical components of an RFID system except: A) bar codes. B) antennas. C) radio transmitters. D) tags. E) a stationary or handheld device. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

197

83) Which digital cellular standard is used widely throughout the world except the United States? A) GSM B) CDMA C) WLAN D) LTD E) 4G Answer: A Difficulty: Challenging AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 84) Which of the following statements about RFID is not true? A) RFIDs transmit only over a short range. B) RFIDs use an antenna to transmit data. C) Microchips embedded in RFIDs are used to store data. D) RFIDs require line-of-sight contact to be read. E) RFID tags and antennas come in a variety of shapes and sizes. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 85) Wireless sensor networks (WSNs) are used for the following tasks except: A) processing consumer transactions. B) monitoring machines. C) detecting radioactive materials. D) protecting property. E) identifying vehicles for trucking firms. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 86) 4G networks use which of the following standards? A) GSM and LTD B) CDMA and PAN C) LTE and LTD D) T-Mobile and AT&T E) LTE and WiMax Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 198

87) Which of the following statements about 5G is true? A) 5G is built on the foundation of 4G networks. B) 5G will transmit data in the megabyte range. C) 5G will be able to transmit data in the gigabit range. D) 5G will have longer transmission delays. E) 5G is not currently being developed by large Internet network providers. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 88) Bluetooth can be used to link up to devices within a 10-meter area using lowpower, radio-based communication. A) two B) five C) eight D) fifteen E) twenty Answer: C Difficulty: Challenging AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 89) One or more access points positioned on a ceiling, wall, or other strategic spot in a public place to provide maximum wireless coverage for a specific area are referred to as: A) touch points. B) netcenters. C) hot points. D) wireless hubs. E) hotspots. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

199

90) The 802.11 set of standards is known as: A) WLAN. B) WSN. C) Wi-Fi. D) WiMax. E) WAN. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 91) The WiMax standard can transmit up to a distance of approximately: A) 30 meters. B) 500 meters. C) 30 miles. D) 5 miles. E) 70 miles. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 92) Based on your reading of the examples in the chapter, which of the following would be the best use of RFID for a business? A) Logging transactions B) Managing the supply chain C) Lowering network costs D) Enabling client communication E) Improving employee engagement Answer: B Difficulty: Moderate AACSB: Analytical Thinking LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

200

93) The Tour de France, described in the chapter-opening case, uses all of the following technologies except: A) wireless networking. B) wireless sensors. C) cloud services. D) GPS. E) 5G cellular networks. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 94) A(n) is a box consisting of a radio receiver/transmitter and antennas that links to a wired network, router, or hub. A) RFID receiver B) WiMax receiver C) access point D) hub E) hotspot Answer: C Difficulty: Challenging AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 95) RFID technology is being gradually replaced by less costly technologies such as WSNs. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 96) Apple Pay uses an RFID-related technology called near field communication. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 97) NFC tags are always passive. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 201

98) How are RFID systems used in inventory control and supply chain management? Answer: In inventory control and supply chain management, RFID systems capture and manage more detailed information about items in warehouses or in production than bar coding systems. If a large number of items are shipped together, RFID systems track each pallet, lot, or even unit item in the shipment. This technology may help companies improve receiving and storage operations by enhancing their ability to "see" exactly what stock is stored in warehouses or on retail store shelves. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 99) What are wireless sensor networks? How do they work and what are they used for? Answer: Wireless sensor networks (WSNs) are networks of interconnected wireless devices that are embedded into the physical environment to provide measurements of many points over large spaces. These devices have built-in processing, storage, and radio frequency sensors and antennas. They are linked into an interconnected network that routes the data they capture to a computer for analysis. These networks range from hundreds to thousands of nodes. Because wireless sensor devices are placed in the field for years at a time without any maintenance or human intervention, they must have very low power requirements and batteries capable of lasting for years. Wireless sensor networks are valuable in areas such as monitoring environmental changes; monitoring traffic or military activity; protecting property; efficiently operating and managing machinery and vehicles; establishing security perimeters; monitoring supply chain management; or detecting chemical, biological, or radiological material. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? 100) What are some of the standards and networks used in digital cellular service, and where are they in use? Answer: Common cellular system standards include the Global System for Mobile Communications (GSM), which is used in Europe and much of the world outside of the United States. In the U.S., Code Division Multiple Access is used by Verizon and Sprint. It is a more efficient system than GSM. The generations of networks in use today by cellular systems includes 3G and 4G. 4G networks offer higher speeds than 3G. The standards in use by 4G Networks are Long Term Evolution (LTE) and Worldwide Interoperability for Microwave Access (WiMax). Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access? Essentials of MIS, 14e (Laudon/Laudon) 202

Chapter 8 Securing Information Systems 1) Which of the following refers to policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems? A) Security B) Controls C) Benchmarking D) Algorithms E) Identity management Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 2) Which of the following refers to all of the methods, policies, and organizational procedures that ensure the safety of the organization's assets, the accuracy and reliability of its accounting records, and operational adherence to management standards? A) Legacy systems B) SSID standards C) Vulnerabilities D) Security policy E) Controls Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 3) Most computer viruses deliver a: A) worm. B) Trojan horse. C) drive-by download. D) keylogger. E) payload. Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

203

4) Which of the following statements about wireless security is not true? A) LANs using the 802.11 standard can be easily penetrated by outsiders. B) Wi-Fi networks are susceptible to hacking by eavesdroppers. C) War driving involves eavesdroppers driving by buildings or parking outside and trying to intercept a wireless network. D) Intruders can force a user's NIC to associate with a rogue access point. E) Bluetooth is the only wireless technology that is not susceptible to hacking. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 5) All of the following are specific security challenges that threaten the communications lines in a client/server environment except: A) errors. B) tapping. C) theft and fraud. D) radiation. E) sniffing. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 6) All of the following are specific security challenges that threaten corporate servers in a client/server environment except: A) hacking. B) malware. C) denial-of-service attacks. D) sniffing. E) vandalism. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 7) All of the following are specific security challenges that threaten corporate systems in a client/server environment except: A) theft of data. B) copying of data. C) alteration of data. D) radiation. E) hardware failure. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 204

8) CryptoLocker is an example of which of the following? A) Worm B) SQL injection attack C) Sniffer D) Evil twin E) Ransomware Answer: E Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 9) Which of the following statements about Internet security is not true? A) The use of P2P networks can expose a corporate computer to outsiders. B) A corporate network without access to the Internet is more secure than one that provides access. C) Data stored in cloud systems is not vulnerable to attack. D) Instant messaging can provide hackers access to an otherwise secure network. E) Email attachments can serve as a springboard for malicious software. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 10) A Trojan horse: A) is software that appears to be benign but does something other than expected. B) is a virus that replicates quickly. C) is malware named for a breed of fast-moving Near-Eastern horses. D) installs spyware on users' computers. E) is a type of sniffer used to infiltrate corporate networks. Answer: A Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 11) A salesperson clicks repeatedly on the online ads of a competitor in order to drive the competitor's advertising costs up. This is an example of: A) phishing. B) pharming. C) spoofing. D) evil twins. E) click fraud. Answer: E Difficulty: Moderate AACSB: Analytical Thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 205

12) Which of the following is a virus that uses flaws in Windows software to take over a computer remotely? A) Sasser B) Zeus C) Cryptolocker D) ILOVEYOU E) Conficker Answer: E Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 13) is malware that hijacks a user's computer and demands payment in return for giving back access. A) A Trojan horse B) Ransomware C) Spyware D) A virus E) An evil twin Answer: B Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 14) is spyware that logs and transmits everything a user types. A) Spyware B) A Trojan horse C) A keylogger D) A worm E) A sniffer Answer: C Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 15) Which of the following statements about botnets is not true? A) Eighty percent of the world's malware is delivered by botnets. B) Botnets are often used to perpetrate DDoS attacks. C) Ninety percent of the world's spam is delivered by botnets. D) Botnets are often used for click fraud. E) It is not possible to make a smartphone part of a botnet. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

206

16) Using numerous computers to inundate and overwhelm the network from numerous launch points is called a(n) attack. A) DDoS B) DoS C) SQL injection D) phishing E) botnet Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 17) Which of the following is not an example of a computer used as a target of crime? A) Knowingly accessing a protected computer to commit fraud B) Accessing a computer system without authority C) Illegally accessing stored electronic communication D) Threatening to cause damage to a protected computer E) Breaching the confidentiality of protected computerized data Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 18) An employee clicks on a link in an email from what looks like a fellow employee and is taken to a fraudulent website which asks for personal information is an example of: A) click fraud. B) DDOS attack. C) spear phishing. D) pharming. E) identity theft. Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 19) Which of the following specifically makes malware distribution and hacker attacks to disable websites a federal crime? A) Computer Fraud and Abuse Act B) Economic Espionage Act C) Electronic Communications Privacy Act D) Data Security and Breach Notification Act E) National Information Infrastructure Protection Act Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 207

20) The intentional defacement or destruction of a website is called: A) spoofing. B) cybervandalism. C) cyberwarfare. D) phishing. E) pharming. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 21) Evil twins are: A) Trojan horses that appears to the user to be a legitimate commercial software application. B) email messages that mimic the email messages of a legitimate business. C) fraudulent websites that mimic a legitimate business's website. D) computers that fraudulently access a website or network using the IP address and identification of an authorized computer. E) bogus wireless network access points that look legitimate to users. Answer: E Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 22) Pharming involves: A) redirecting users to a fraudulent website even when the user has typed in the correct address in the web browser. B) pretending to be a legitimate business's representative in order to garner information about a security system. C) setting up fake website to ask users for confidential information. D) using emails for threats or harassment. E) setting up fake Wi-Fi access points that look as if they are legitimate public networks. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 23) Which of the following is the single greatest cause of network security breaches? A) Viruses B) User lack of knowledge C) Trojan horses D) Cyberwarfare E) Bugs Answer: B Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 208

24) When a hacker discovers a security hole in software that is unknown to the software vendor, it is an example of: A) sniffing. B) social engineering. C) phishing. D) zero-day vulnerability. E) snooping. Answer: D Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 25) According to Ponemon Institute's 2018 Annual Cost of Cyber Crime Study, the average annualized cost of cybercrime for benchmarked companies in 11 different countries was approximately: A) $1.3 million. B) $13 million. C) $130 million. D) $13 billion. E) $130 billion. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 26) Which of the following refers to eavesdroppers driving by buildings or parking outside and trying to intercept wireless network traffic? A) War driving B) Sniffing C) Cybervandalism D) Drive-by tapping E) Snooping Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

209

27) When hackers gain access to a database containing your personal private information, this is an example of: A) phishing. B) spoofing. C) social engineering. D) identity theft. E) pharming. Answer: D Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 28) Dyn suffered which of the following types of attacks? A) SQL injection B) Data breach C) Cyberwarfare D) Ransomware E) DDoS Answer: E Difficulty: Challenging AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 29) A foreign country attempting to access government networks in order to disable a national power grid is an example of: A) phishing. B) denial-of-service attacks. C) cyberwarfare. D) cyberterrorism. E) evil twins. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 30) According to the 2019 Identity Fraud Study by Javelin Strategy & Research, how many consumers were affected by identity fraud in 2018? A) 144,000 B) 1.44 million C) 14.4 million D) 144 million E) 1.4 billion Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 210

31) All of the following have contributed to an increase in software flaws except: A) the growing complexity of software programs. B) the growing size of software programs. C) demands for timely delivery to markets. D) the inability to fully test programs. E) the increase in malicious intruders seeking system access. Answer: E Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 32) As described in the chapter case, Meltdown involves which of the following? A) Trojan horse B) Software design vulnerability C) Microprocessor design vulnerability D) Computer worm E) Pharming attack Answer: C Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 33) Zeus is an example of a keylogger. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 34) Smartphones are not vulnerable to malicious software or penetration from outsiders. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 35) The Mirai botnet infected numerous IoT devices and then used them to launch a DDoS attack. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 36) A computer worm is a program that can copy itself to other computers on the network. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 211

37) In 2018, the number of malicious mobile malware attacks doubled from the previous year. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 38) Wireless networks are more difficult for hackers to gain access to because radio frequency bands are difficult to scan. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 39) A computer virus replicates more quickly than a computer worm. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 40) Phishing is a form of spoofing. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 41) Sniffers enable hackers to steal proprietary information from anywhere on a network, including email messages, company files, and confidential reports. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 42) DoS attacks are used to destroy information and access restricted areas of a company's information system. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 43) Zero defects cannot be achieved in larger software programs because fully testing programs that contain thousands of choices and millions of paths would require thousands of years. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

212

44) Most IoT devices support sophisticated security approaches. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 45) Malicious software programs referred to as spyware include a variety of threats such as computer viruses, worms, and Trojan horses. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 46) What are the security challenges faced by wireless networks? Answer: Both Bluetooth and Wi-Fi networks are susceptible to hacking by eavesdroppers. Local area networks (LANs) using the 802.11 standard can be easily penetrated by outsiders armed with laptops, wireless cards, external antennae, and hacking software. Hackers use these tools to detect unprotected networks, monitor network traffic, and, in some cases, gain access to the Internet or to corporate networks. Wireless networks in many locations do not have basic protections against war driving, in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic. Intruders can use the information they have gleaned from a Wi-Fi network to set up rogue access points on a different radio channel in a nearby physical location to force a Wi-Fi user to associate with the rogue access point. Once this association occurs, hackers using the rogue access point can capture the names and passwords of unsuspecting users. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 47) Explain how an SQL injection attack works and what types of systems are vulnerable to this type of attack. Answer: SQL injection attacks take advantage of vulnerabilities in poorly coded web application software to introduce malicious code into a company's systems and networks. These vulnerabilities occur when a web application fails to properly validate or filter data entered by a user on a web page, which might occur when ordering something online. An attacker uses this input validation error to send a rogue SQL query to the underlying database to access the database, plant malicious code, or access other systems on the network. Large web applications using databases are most vulnerable, as they may have hundreds of places for inputting user data, each of which creates an opportunity for an SQL injection attack. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

213

48) How is the security of a firm's information system and data affected by its people, organization, and technology? Is the contribution of one of these dimensions any more important than the other? Why? Answer: There are various technological essentials to protecting an information system: firewalls, authentication, encryption, antivirus protection etc. Without technology implemented correctly, there is no security. A firm's employees are its greatest threat, in terms of embezzlement and insider fraud, errors, and lax enforcement of security policies. Probably the most important dimension is organization, because this is what determines a firm's business processes and policies. The firm's information policies can most enhance security by stressing intelligent design of security systems, appropriate use of security technology, and the usability of its security processes. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse? 49) The HIPAA Act of 1996: A) requires financial institutions to ensure the security of customer data. B) specifies best practices in information systems security and control. C) imposes responsibility on companies and management to safeguard the accuracy of financial information. D) outlines medical security and privacy rules. E) identifies computer abuse as a crime and defines abusive activities. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 8-2: What is the business value of security and control? 50) The Gramm-Leach-Bliley Act: A) requires financial institutions to ensure the security of customer data. B) specifies best practices in information systems security and control. C) imposes responsibility on companies and management to safeguard the accuracy of financial information. D) outlines medical security and privacy rules. E) identifies computer abuse as a crime and defines abusive activities. Answer: A Difficulty: Challenging AACSB: Application of Knowledge LO: 8-2: What is the business value of security and control?

214

51) The Sarbanes-Oxley Act: A) requires financial institutions to ensure the security of customer data. B) specifies best practices in information systems security and control. C) imposes responsibility on companies and management to safeguard the accuracy of financial information. D) outlines medical security and privacy rules. E) identifies computer abuse as a crime and defines abusive activities. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-2: What is the business value of security and control? 52) Which of the following is a type of ambient data? A) Computer log containing recent system errors B) A file deleted from a hard disk C) A file that contains an application's user settings D) A set of raw data from an environmental sensor E) Data that has been recorded over Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 8-2: What is the business value of security and control? 53) Computer forensics tasks include all of the following except: A) presenting collected evidence in a court of law. B) securely storing recovered electronic data. C) collecting physical evidence on the computer. D) finding significant information in a large volume of electronic data. E) recovering data from computers while preserving evidential integrity. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-2: What is the business value of security and control?

215

54) Three major concerns of system builders and users are disaster, security, and human error. Of the three, which do you think is most difficult to deal with? Why? Answer: Student answers will vary. Example answers are: Disaster might be the most difficult because it is unexpected, broad-based, and frequently life threatening. In addition, the company cannot know if the disaster plan will work until a disaster occurs, and then it's too late to make corrections. Security might be the most difficult because it is an ongoing problem, new viruses are devised constantly, and hackers get smarter every day. Furthermore, damage done by a trusted employee from inside cannot be obviated by system security measures. Human error might be most difficult because it isn't caught until too late, and the consequences may be disastrous. Also, administrative error can occur at any level and through any operation or procedure in the company. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 8-2: What is the business value of security and control? 55) Define computer forensics and describe the types of problems it is designed to address. Answer: Computer forensics involves the scientific collection, examination, authentication, preservation, and analysis of data held on or retrieved from computer storage media in such a way that the information can be used as evidence in a court of law. It deals with the following problems: • Recovering data from computers while preserving evidential integrity • Securely storing and handling recovered electronic data • Finding significant information in a large volume of electronic data • Presenting the information to a court of law Electronic evidence may reside on computer storage media in the form of computer files and as ambient data, which are not visible to the average user. An example might be a file that has been deleted on a PC hard drive. Data that a computer user may have deleted on computer storage media can be recovered through various techniques. Computer forensics experts try to recover such hidden data for presentation as evidence. An awareness of computer forensics should be incorporated into a firm's contingency planning process. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 8-2: What is the business value of security and control? 56) Your company, an online discount pet supply store, has calculated that a loss of Internet connectivity for 3 hours results in a potential loss of $2,000 to $3,000 and that there is a 50% chance of this occurring each year. What is the annual expected loss from this exposure? A) $500 B) $1,000 C) $1,250 D) $1,500 E) $2,500 Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control? 216

57) Implementation controls: A) can be classified as input controls, processing controls, and output controls. B) govern the design, security, and use of computer programs and the security of data files in general throughout the organization. C) apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment. D) include software controls, computer operations controls, and implementation controls. E) audit the systems development process at various points to ensure that the process is properly controlled and managed. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 8-3: What are the components of an organizational framework for security and control? 58) controls formalize standards, rules, procedures, and control disciplines to ensure that the organization's general and application controls are properly executed and enforced. A) Software B) Administrative C) Data security D) Implementation E) Input Answer: B Difficulty: Challenging AACSB: Information Technology LO: 8-3: What are the components of an organizational framework for security and control? 59) An analysis of an information system that rates the likelihood of a security incident occurring and its cost would be included in which of the following? A) Security policy B) AUP C) Risk assessment D) Business impact analysis E) Business continuity plan Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control?

217

60) A statement ranking information risks and identifying security goals would be included in which of the following? A) Security policy B) AUP C) Risk assessment D) Business impact analysis E) Business continuity plan Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control? 61) Which of the following defines acceptable uses of a firm's information resources and computing equipment? A) An information systems audit policy B) A CA policy C) An MSSP D) A UTM system E) An AUP Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control? 62) Which of the following focuses primarily on the technical issues of keeping systems up and running? A) Business continuity planning B) Security policies C) Disaster recovery planning D) An AUP E) An information systems audit Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control? 63) All of the following are types of information systems general controls except: A) application controls. B) computer operations controls. C) hardware controls. D) software controls. E) administrative controls. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-3: What are the components of an organizational framework for security and control? 218

64) An acceptable use policy defines acceptable uses of the firm's information resources and computing equipment. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 8-3: What are the components of an organizational framework for security and control? 65) Hackers and their companion viruses are an increasing problem, especially on the Internet. What are the most important measures for a firm to take to protect itself from this? Is full protection feasible? Why or why not? Answer: For protection, a company must institute good security measures, which will include firewalls, investigation of personnel to be hired, physical and software security and controls, antivirus software, and internal education measures. These measures are best put in place at the time the system is designed, and careful attention paid to them. A prudent company will engage in disaster protection measures, frequent updating of security software, and frequent auditing of all security measures and of all data upon which the company depends. Full protection may not be feasible in light of the time and expenses involved, but a risk analysis can provide insights into which areas are most important and vulnerable. These are the areas to protect first. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 8-3: What are the components of an organizational framework for security and control?

219

66) How can a firm's security policies contribute and relate to the following business objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; improved decision making; competitive advantage; and survival? Give examples. Answer: A firm's security policies can contribute and relate to the following business objectives as follows: (1) Operational excellence: Security policies are essential to operational excellence. A firm's daily transactions can be severely disrupted by cybercrime such as hackers. A firm's efficiency relies on accurate data. In addition, information assets have tremendous value, and the repercussions can be devastating if they are lost, destroyed, or placed in the wrong hands. (2) New products, services, business models: Security policies protect a company's ideas for new products and services, which could be stolen by competitors. Additionally, enhanced security could be seen by a customer as a way to differentiate your product. (3) Customer and supplier intimacy: Customers rely on your security if they enter personal data into your information system, for example, credit card information into your e-commerce site. The information you receive from customers and suppliers directly affects how able you are to customize your product, service, or communication with them. (4) Improved decision making: Secure systems make data accuracy a priority, and good decision making relies on accurate and timely data. Lost and inaccurate data would lead to compromised decision making. (5) Competitive advantage: The knowledge that your firm has superior security than another would, on an otherwise level playing field, make your firm more attractive to do business with. Also, improved decision-making, new products and services, which are also affected by security (see above), will contribute to a firm's competitive advantage. Strong security and control also increase employee productivity and lower operational costs. (6) Survival: New laws and regulations make keeping your security system up to date a matter of survival. Inadequate security and control may result in serious legal liability. Firms have been destroyed by errors in security policies. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 8-3: What are the components of an organizational framework for security and control? 67) What is the role of an information systems audit? Answer: An information systems audit examines the firm's overall security environment as well as controls governing individual information systems. The auditor should trace the flow of sample transactions through the system and perform tests, using, if appropriate, automated audit software. The information systems audit may also examine data quality. The audit should review technologies, procedures, documentation, training, and personnel. A thorough audit will even simulate an attack or disaster to test the response of the technology, information systems staff, and business employees. The audit lists and ranks all control weaknesses and estimates the probability of their occurrence. It then assesses the financial and organizational impact of each threat. Management is expected to devise a plan for countering significant weaknesses in controls. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 8-3: What are the components of an organizational framework for security and control?

220

68) How does disaster recovery planning differ from business continuity planning? Answer: Disaster recovery planning devises plans for the restoration of disrupted computing and communications services. Disaster recovery plans focus primarily on the technical issues involved in keeping systems up and running, such as which files to back up and the maintenance of backup computer systems or disaster recovery services. Business continuity planning, on the other hand, focuses on how the company can restore business operations after a disaster strikes. The business continuity plan identifies critical business processes and determines action plans for handling mission-critical functions if systems go down. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 8-3: What are the components of an organizational framework for security and control? 69) WPA3 is a more effective way to secure a wireless network than WEP because it: A) includes an AUP. B) operates on a VPN. C) uses encryption keys that are more difficult to crack. D) uses symmetric encryption methods. E) is part of most vendors UTM products. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 70) Which of the following statements about passwords is not true? A) Authentication cannot be established by the use of a password. B) Password systems that are too rigorous may hinder employee productivity. C) Passwords can be stolen through social engineering. D) Passwords are often disregarded by employees. E) Passwords can be sniffed when being transmitted over a network. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 71) Two-factor authentication utilizes a(n): A) unique password. B) encrypted connection. C) multistep process of authentication. D) firewall. E) digital certificate. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 221

72) All of the following are currently being used as traits that can be profiled by biometric authentication except: A) fingerprints. B) facial characteristics. C) body odor. D) retinal images. E) voice. Answer: C Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 73) A firewall allows the organization to: A) enforce a security policy on data exchanged between its network and the Internet. B) check the accuracy of all transactions between its network and the Internet. C) create an enterprise system on the Internet. D) check the content of all incoming and outgoing email messages. E) create access rules for a network. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 74) use scanning software to look for known problems such as bad passwords, the removal of important files, security attacks in progress, and system administration errors. A) Stateful inspections B) Intrusion detection systems C) Application proxy filtering technologies D) Packet filtering technologies E) Firewalls Answer: B Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

222

75) Currently, the protocols used for secure information transfer over the Internet are: A) TCP/IP and SSL. B) S-HTTP and CA. C) HTTP and TCP/IP. D) S-HTTP and SHTML. E) SSL, TLS, and S-HTTP. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 76) In which method of encryption is a single encryption key sent to the receiver so both sender and receiver share the same key? A) SSL/TLS B) Symmetric key encryption C) Public key encryption D) Private key encryption E) Distributed encryption Answer: B Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 77) A digital certificate system: A) uses third party CAs to validate a user's identity. B) uses digital signatures to validate a user's identity. C) uses tokens to validate a user's identity. D) is used primarily by individuals for personal correspondence. E) protects a user's identity by substituting a certificate in place of identifiable traits. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

223

78) Fault tolerant information systems offer 100 percent availability because they use: A) high-capacity storage. B) a multitier server network. C) redundant hardware, software, and power supplies. D) dedicated phone lines. E) a digital certificate system. Answer: C Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 79) Which of the following statements about blockchain is not true? A) Once recorded, a blockchain transaction cannot be changed. B) The data represented in a blockchain is maintained in a central database. C) The records in a blockchain are secured through cryptography. D) Each block in a blockchain is connected to all the blocks before and after it. E) Blockchain is especially suitable for environments with high security requirements and mutually unknown actors. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 80) An authentication system in which a user must provide two types of identification, such as a bank card and PIN, is called: A) smart card authentication. B) biometric authentication. C) two-factor authentication. D) symmetric key authorization. E) token authentication. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

224

81) Which of the following techniques stops data packets originating outside the organization, inspects them, and passes the packets to the other side of an organization's firewall? A) NAT B) Packet filtering C) Blockchain D) Stateful inspection E) Application proxy filtering Answer: E Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 82) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called systems. A) DPI B) MSSP C) NSP D) PKI E) UTM Answer: E Difficulty: Challenging AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 83) Blockchain refers to a technology that: A) uses a chain of digital "blocks" that contain records of transactions. B) uses a centralized data store in the cloud. C) relies on the Internet to provide secure transactions. D) uses existing banking systems to transfer funds. E) relies on peer-to-peer networks. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 84) Organizations can use existing network security software to secure mobile devices. Answer: FALSE Difficulty: Challenging AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

225

85) In cloud computing, accountability and responsibility for protection of sensitive data is transferred to the cloud provider. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 86) Biometric authentication uses systems that read and interpret individual human traits. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 87) Packet filtering catches most types of network attacks. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 88) Application proxy filtering examines the application content of packets. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 89) SSL is a protocol used to establish a secure connection between two computers. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 90) Symmetric encryption uses two keys. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

226

91) Smartphones typically feature state-of-the-art encryption and security features, making them highly secure tools for businesses. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 92) Authentication refers to verifying that a person is who he or she claims to be. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 93) In public key encryption the keys are mathematically related so that data encrypted with one key can be decrypted using only the other key. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 94) A firewall is a combination of hardware and software that controls the flow of incoming and outgoing network traffic. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 95) Is the cloud a safer and more secure computing environment than an in-house network? Why or why not? Answer: Student evaluations will vary, but should include the understanding that using the cloud for computing distributes data to remote services that a company will not have final control of, that a company's cloud data will be stored alongside the data of other companies, and that various safeguards should be in place to protect your data. A sample answer is: The safety of cloud computing as compared to in-house network computing depends on the security implemented both at the corporation and at the service provider. For example, the company will need to ensure secure procedures and make sure that employees have secure passwords and access levels. The cloud service provider should use encryption for all data, at a minimum. Clients should make sure that the service provider complies with local privacy rules, external security audits, and certifications and provides proof of encryption mechanisms. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 227

96) Why is software quality important to security? What specific steps can an organization take to ensure software quality? Answer: Software errors pose a constant threat to information systems, causing untold losses in productivity. Growing complexity and size of software programs, coupled with demands for timely delivery to markets, have contributed to an increase in software flaws or vulnerabilities. A major problem with software is the presence of hidden bugs or program code defects. Studies have shown that it is virtually impossible to eliminate all bugs from large programs. Flaws in commercial software not only impede performance but also create security vulnerabilities that open networks to intruders. To correct software flaws once they are identified, the software vendor creates small pieces of software called patches to repair the flaws without disturbing the proper operation of the software. Organizations must maintain best efforts to both make sure purchased software is up to date and make sure their own software and programming is as bugfree as possible by employing software metrics and rigorous software testing. Ongoing use of metrics allows the information systems department and end users to jointly measure the performance of the system and identify problems as they occur. Examples of software metrics include the number of transactions that can be processed in a specified unit of time, online response time, the number of payroll checks printed per hour, and the number of known bugs per hundred lines of program code. For metrics to be successful, they must be carefully designed, formal, objective, and used consistently. Early, regular, and thorough testing will contribute significantly to system quality. Good testing begins before a software program is even written by using a walkthrough—a review of a specification or design document by a small group of people carefully selected based on the skills needed for the particular objectives being tested. Once developers start writing software programs, coding walkthroughs also can be used to review program code. However, code must be tested by computer runs. When errors are discovered, the source is found and eliminated through a process called debugging. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

228

97) You have just been hired as a security consultant by MegaMalls Inc., a chain of retail malls, to make sure that the security of their information systems is up to par. Outline the steps you will take to achieve this. Answer: To ensure that the security of MegaMalls' information systems is up to par, I would take the following steps: (1) Establish what data and processes are important and essential to the company. Determine what external and internal information is essential to the different employee roles in the company. (2) Conduct a security audit and create a risk assessment analysis. (3) Establish what legal/governmental/industry standards need to be adhered to and which international standards are relevant. (4) Conduct a business impact analysis and determine a disaster recovery and business continuity plan. (5) Create a security policy that defines an acceptable use policy, authorization policies and processes. (6) Plan for any change management needed. (7) Determine how the success of your policy will be measured and set up means for measuring this. (8) Implement such policies. (9) Measure and evaluate the effectiveness of the policy and make any additional adjustments. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 98) What is a digital certificate? How does it work? Answer: Digital certificates are data files used to establish the identity of users and electronic assets for protection of online transactions. A digital certificate system uses a trusted third party, known as a certification authority, to validate a user's identity. The CA verifies a digital certificate user's identity offline. This information is put into a CA server, which generates an encrypted digital certificate containing owner identification information and a copy of the owner's public key. The certificate authenticates that the public key belongs to the designated owner. The CA makes its own public key available publicly either in print or perhaps on the Internet. The recipient of an encrypted message uses the CA's public key to decode the digital certificate attached to the message, verifies it was issued by the CA, and then obtains the sender's public key and identification information contained in the certificate. Using this information, the recipient can send an encrypted reply. The digital certificate system would enable, for example, a credit card user and a merchant to validate that their digital certificates were issued by an authorized and trusted third party before they exchange data. Public key infrastructure (PKI), the use of public key cryptography working with a certificate authority, is now widely used in ecommerce. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

229

99) Name and describe four firewall screening technologies. Answer: There are a number of firewall screening technologies, including static packet filtering, stateful inspection, Network Address Translation, and application proxy filtering. They are frequently used in combination to provide firewall protection. • Packet filtering examines selected fields in the headers of data packets flowing back and forth between the trusted network and the Internet, examining individual packets in isolation. This filtering technology can miss many types of attacks. • Stateful inspection provides additional security by determining whether packets are part of an ongoing dialogue between a sender and a receiver. It sets up state tables to track information over multiple packets. Packets are accepted or rejected based on whether they are part of an approved conversation or attempting to establish a legitimate connection. • Network Address Translation (NAT) can provide another layer of protection when static packet filtering and stateful inspection are employed. NAT conceals the IP addresses of the organization's internal host computer(s) to prevent sniffer programs outside the firewall from ascertaining them and using that information to penetrate internal systems. • Application proxy filtering examines the application content of packets. A proxy server stops data packets originating outside the organization, inspects them, and passes a proxy to the other side of the firewall. If a user outside the company wants to communicate with a user inside the organization, the outside user first communicates with the proxy application, and the proxy application communicates with the firm's internal computer. Likewise, a computer user inside the organization goes through the proxy to talk with computers on the outside. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources? 100) Explain how two-factor authentication increases security. Answer: Two-factor authentication increases security by validating users by a multistep process. To be authenticated, a user must provide two means of identification, one of which is typically a physical token, such as a smartcard or chip-enabled bank card, and the other of which is typically data, such as a password or PIN (personal identification number). Biometric data, such as fingerprints, iris prints, or voice prints, can also be used as one of the authenticating mechanisms. A common example of two-factor authentication is a bank card; the card itself is the physical item, and the PIN is the data that go with it. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources? Essentials of MIS, 14e (Laudon/Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) From your reading of the chapter's opening case, Avon chose an enterprise application from which of the following vendors? A) Oracle B) SAP 230

C) IBM D) Microsoft E) JDA Software Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 2) Which of the following provides a suite of integrated software modules and a common central database that allows data to be used by multiple functions and business processes? A) Process management software B) ERP systems C) Groupware D) CRM software E) Supply chain management systems Answer: B Difficulty: Moderate AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 3) Enterprise software is built around thousands of predefined business processes that reflect: A) government regulations. B) industry benchmarks. C) best practices. D) cutting edge workflow analyses. E) the firm's culture. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

231

4) Which of the following is not true about enterprise systems? A) Enterprise systems help firms respond rapidly to customer requests for information or products. B) Enterprise system data have standardized definitions and formats that are accepted by the entire organization. C) Enterprise software is expressly built to allow companies to support their existing business practices. D) Enterprise software includes analytical tools to evaluate overall organizational performance. E) Enterprise systems provide firm-wide information to help managers make better decisions. Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 5) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take? A) Rewrite the software to support the way the company's business processes work. B) Select the business processes you wish to automate. C) Map the company's business processes to the software's business processes. D) Map the software's business processes to the company's business processes. E) Select the functions of the system you wish to use. Answer: E Difficulty: Moderate AACSB: Analytical Thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 6) Which of the following enables a company to tailor a particular aspect of enterprise software to the way a company does business? A) Configuration tables B) Web services C) Data dictionaries D) Middleware E) Groupware Answer: A Difficulty: Moderate AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

232

7) To achieve the maximum benefit of a new ERP system, Tasty Baking implemented an enterprise system by: A) using only the pre-defined processes in the ERP software that matched its own processes. B) retaining its legacy systems to operate as a backup to the new enterprise system. C) customizing less than 5 percent of the enterprise system processes. D) changing the ERP software as needed to match their own processes. E) using a cloud-based version of the ERP. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 8) Coca-Cola implemented an enterprise system from SAP that enabled it to achieve all of the following except: A) standardizing business processes worldwide. B) improving its bargaining power with suppliers. C) reacting faster to market changes. D) reducing the number of employees. E) reducing the cost of raw materials. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 9) Enterprise systems improve management decision making in all the following ways except: A) providing up-to-the-minute data on sales, inventory and production. B) providing more accurate sales and production forecasts. C) improving forecasts of consumer behavior. D) implementing standard definitions and formats worldwide. E) determining the profitability of products. Answer: C Difficulty: Challenging AACSB: Analytical Thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 10) The total time it takes to complete a business process, from start to finish, is called its time. A) development B) cycle C) fulfillment D) service E) actualization Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 233

11) Enterprise systems are built around a small number of predefined business processes. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 12) Organizations can rewrite enterprise system software to support existing business processes. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 13) Extensive customization of enterprise software reduces the overall cost of implementation. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

234

14) Identify and describe three major enterprise applications. Answer: Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes. Enterprise systems provide many benefits including an enterprise-enabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes. Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, manufacturing, delivering, and returning items. Supply chain management software can be categorized as a supply chain planning system or as a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply chain execution system manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. Supply chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization. Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise. Customer relationship management systems can be classified as operational or as analytical. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Benefits include increased customer satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and retention. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 15) Identify at least four benefits and four challenges of enterprise systems. Answer: Benefits include: increasing operational efficiency; providing firm-wide information to help decision making; standardized business processes; greater responsiveness to customer needs; greater accuracy in fulfilling product demand; reduction of inventory and inventory costs; reduction in order-to-delivery time; improving business processes; removing redundant processes and systems; lowering costs through centralized processing; and improved decision making. Challenges include: the expense of the software and related costs; the time required for implementation; the deep-seated technological and organizational changes required,; the need to overcome organizational resistance; switching costs; and the data cleansing work required. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 235

16) You have been hired by Santori, Inc., a small company that imports and distributes an Italian sparkling water. The company is interested in what benefits an enterprise system would bring. Would an enterprise system be appropriate for this company? What steps would you take in determining this? Answer: An enterprise system may be too expensive, although there are enterprise software packages that are available to smaller companies. A hosted enterprise application might be the most economical way to implement an enterprise system. To determine whether this would be beneficial to Santori, I would first look at their existing business processes. It would be ideal to determine if their efficiency meets benchmarks in their industry and allows them to be competitive with other businesses in their niche. Then I would review existing hosted applications to see how the applications business processes matched up with Santori's. It would be important to compare the costs of instituting new business processes with the benefits and cost savings. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence? 17) What business processes are supported by enterprise systems? Give specific examples. Answer: The four major business processes supported by enterprise systems are: • Financial and accounting processes, including general ledger, accounts payable, accounts receivable, fixed assets, cash management and forecasting, product-cost accounting, cost-center accounting, asset accounting, tax accounting, credit management, and financial reporting. • Human resources processes, including personnel administration, time accounting, payroll, personnel planning and development, benefits accounting, applicant tracking, time management, compensation, workforce planning, performance management, and travel expense reporting. • Manufacturing and production processes, including procurement, inventory management, purchasing, shipping, production planning, production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant and equipment maintenance. • Sales and marketing processes, including order processing, quotations, contracts, product configuration, pricing, billing, credit checking, incentive and commission management, and sales planning. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

236

18) A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers is called a(n): A) distribution channel. B) supply chain. C) value chain. D) marketing channel. E) information system. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 19) In the supply chain, components or parts are referred to as: A) upstream materials, organizations, and processes. B) raw materials. C) secondary products. D) intermediate products. E) downstream organizations and processes. Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 20) Which of the following refers to a company's suppliers, the suppliers' suppliers, and the processes for managing relationships with them? A) Supplier's internal supply chain B) Logistics supply chain C) Downstream portion of the supply chain D) Upstream portion of the supply chain E) Outsourced supply chain Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

237

21) Distribution and delivery of products to retailers is part of the: A) downstream portion of the supply chain. B) external supply chain. C) upstream portion of the supply chain. D) supplier's internal supply chain. E) midstream portion of the supply chain. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 22) Uncertainties in the supply chain often lead to: A) declines in production. B) increases in inventory across all tiers. C) strategic changes in production plans. D) the bullwhip effect. E) a reduction in safety stocks. Answer: B Difficulty: Easy AACSB: Analytical Thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 23) Why isn't overstocking warehouses an effective solution for a problem of low availability? A) It does not speed product time to market. B) It is an inefficient use of raw materials. C) It increases sales costs. D) It increases inventory costs. E) It lowers fill rate. Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

238

24) Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain? A) Safety stock B) Continuous replenishment C) Just-in-time strategies D) Demand planning E) Perfect information Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 25) A scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line best describes a strategy. A) just-in-time B) frictionless C) bullwhip D) safety-stock E) streamlined Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 26) A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain is called the effect. A) network B) bullwhip C) ripple D) whirlpool E) diffraction Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

239

27) Supply chain software can be classified as either supply chain systems or supply chain systems. A) push; pull B) demand; continual C) upstream; downstream D) planning; execution E) maintenance; development Answer: D Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 28) Which of the following enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product? A) Supply chain demand system B) Supply chain delivery system C) Supply chain optimization system D) Supply chain execution system E) Supply chain planning system Answer: E Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 29) Supply chain planning systems perform all of the following functions except: A) establish inventory levels for raw materials and finished goods. B) identify the transportation mode to use for product delivery. C) determine where to store finished goods. D) determine how much product to manufacture in a given time period. E) track the physical status of goods. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

240

30) Which supply chain planning function determines how much product is needed to satisfy all customer demands? A) Distribution management B) Replenishment planning C) Demand planning D) Order planning E) Customer planning Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 31) Which of the following manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner? A) Supply chain demand system B) Supply chain delivery system C) Supply chain planning system D) Supply chain execution system E) Supply chain optimization system Answer: D Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 32) Supply chain execution systems provide all of the following functions except: A) generating demand forecasts for products. B) tracking the flow of finished goods. C) managing materials. D) managing warehouse operations. E) managing the financial information involving all parties. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

241

33) A supply chain driven by forecasts of consumer demand follows a(n) model. A) pull-based B) build-to-stock C) push-based D) replenishment-driven E) optimized Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 34) A supply chain driven by actual customer orders is called a model. A) supply-based B) demand-driven C) replenishment-driven D) pull-based E) market-driven Answer: D Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 35) Concurrent supply chains are made possible by which technology? A) ERP systems B) The Internet C) Supply-chain management systems D) Just-in-time supply-chain technologies E) Extranets Answer: B Difficulty: Easy AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

242

36) The business value of an effective supply chain management system includes all of the following except: A) faster time to market. B) cost reduction. C) supply matched to demand. D) improved delivery service. E) increased inventory levels. Answer: E Difficulty: Moderate AACSB: Analytical Thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 37) The bullwhip effect can be countered by: A) globalization. B) disintermediation. C) implementing a CRM. D) reducing information uncertainty. E) product differentiation. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 38) As they move through the supply chain, are transformed into finished products and shipped to retailers and customers. A) raw materials B) intermediate products C) basic products D) natural resources E) nascent products Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

243

39) A company having difficulty with timely delivery of parts to its manufacturing plants should implement a supply chain system. A) execution B) planning C) optimization D) management E) touch point Answer: A Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 40) The difference between push- and pull-based models is summarized by which of the following slogans? A) Sell what we make, not make what we sell. B) Push what we make, not pull what we make. C) Make what we sell, not sell what we make. D) Pull what we make, not push what we sell. E) Make what we push, not push what we sell. Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 41) Walmart's continuous replenishment system is an example of a(n) model. A) push-based B) pull-based C) enterprise-based D) supply chain optimization E) forecast-based Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 42) Supply chain management (SCM) systems are a type of enterprise application. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

244

43) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 44) Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 45) Firms in the supply chain develop safety stocks in order to increase the efficiency of their operations. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 46) The bullwhip effect leads to declining inventory costs across the entire supply chain. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 47) Supply chain execution systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 48) Before the pre-Internet environment, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 245

49) Inefficiencies in a supply chain are primarily caused by inaccurate or untimely information. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 50) In a push-based model of SCM systems, actual customer orders or purchases trigger events in the supply chain. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 51) In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for products. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 52) Procter & Gamble (P&G) experienced a growth in its Pampers diapers inventory due to information distortions in the supply chain. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 53) Total supply chain costs in some industries approach 75 percent of the total operating budget. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

246

54) Identify two classifications for supply chain software. For each classification, identify five capabilities. Answer: Supply chain planning systems and supply chain execution systems are two classifications for supply chain software. Supply chain planning systems enable a firm to generate demand forecasts for a product and develop sourcing and manufacturing plans for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, distribution planning, and transportation planning. Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations. Capabilities include order commitments, final production, replenishment, distribution management, and reverse distribution. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 55) What additional complexities are faced in global supply chains? How does the Internet help in managing global supply chains? Answer: Global supply chains typically span greater geographic distances and time differences than domestic supply chains and have participants from a number of different countries. Although the purchase price of many goods might be lower abroad, there are often additional costs for transportation, inventory, and local taxes or fees. Performance standards may vary from region to region or from nation to nation. Supply chain management may need to reflect foreign government regulations and cultural differences. All of these factors impact how a company takes orders, plans distribution, organizes warehousing, and manages inbound and outbound logistics throughout the global markets its services. The Internet helps companies manage many aspects of their global supply chains, including sourcing, transportation, communications, and international finance. As goods are being sourced, produced, and shipped, communication is required among retailers, manufacturers, contractors, agents, and logistics providers. With Internet technology, supply chain members communicate through a web-based system. Firms use intranets to improve coordination among their internal supply chain processes, and they use extranets to coordinate supply chain processes shared with their business partners. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

247

56) Identify two supply chain models. Which is better? Answer: Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. Pull-based refers to a supply chain driven by actual customer orders or purchases so that members of the supply chain produce and deliver only what customers have ordered. Pull-based models are better. Difficulty: Moderate AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 57) Plant Away is an Oregon-based retailer and distributor of trees and shrubs. They have hundreds of smaller nurseries based around the country that grow the plant stock. The majority of their business is conducted online. Consumers typically purchase small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate they have in their supply chain? What might remedy these problems? Answer: Typical problems in supply chains arise from unforeseeable events. In a plant nursery, variations in the weather, growing season, plant diseases, crop output would be uncertainties. Other problems might be interstate regulations governing plants allowed in different states, and making sure plants survive and are healthy during transportation. It would be very important to have up-to-date forecasting of the weather or growing seasons that could anticipate possible problems and analyze and determine the best transportation routes. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 58) Discuss the business value of supply chain management systems. Answer: Supply chain management systems enable firms to streamline both their internal and external supply chain processes and provide management with more accurate information about what to produce, store, and move. By implementing a networked and integrated supply chain management system, companies match supply to demand, reduce inventory levels, improve delivery service, speed product time to market, and use assets more effectively. Total supply chain costs represent the majority of operating expenses for many businesses and in some industries approach 75 percent of the total operating budget. Reducing supply chain costs has a major impact on firm profitability. In addition to reducing costs, supply chain management systems help increase sales. If a product is not available when a customer wants it, customers often try to purchase it from someone else. More precise control of the supply chain enhances the firm's ability to have the right product available for customer purchases at the right time. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers? 248

59) From your reading of the Adidas case study, Adidas uses which of the following to capture online and web behavior from digital actions across all channels and devices? A) Salesforce Marketing Cloud B) Salesforce Sales Cloud C) Salesforce Service Cloud D) Salesforce DMP E) Salesforce Commerce Cloud Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 60) A is a method of interaction with a customer, such as telephone or customer service desk. A) point of presence B) touch point C) sales point D) client channel E) point of service Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 61) Which of the following would not be considered a contact point? A) Email B) Website C) Intranet D) Retail store E) Facebook Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

249

62) software modules deal with setting employee objectives, performance, and compensation. A) SCM B) SFA C) ERM D) DRM E) PRM Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 63) software modules seek to enhance collaboration between a company and its selling partners. A) SCM B) SFA C) ERM D) DRM E) PRM Answer: E Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 64) Customer relationship management systems typically provide software and online tools for sales, customer service, and: A) marketing. B) account management. C) advertising. D) public relations. E) human resources. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

250

65) SFA modules in CRM systems provide tools for all of the following except: A) team selling. B) territory management. C) sales forecasting. D) managing sales prospect and contact information. E) managing customer service requests. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 66) CRM systems help businesses achieve which of the following business objectives? A) Automated accounting processes B) Automated production forecasts C) Faster time to market with new products and services D) Enhanced supplier intimacy E) Enhanced customer intimacy Answer: E Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 67) Customer service modules in CRM systems provide tools for: A) assigning and managing customer service requests. B) capturing prospect and customer data. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information. E) organizing effective marketing campaigns. Answer: A Difficulty: Easy AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 68) Marketing modules in CRM systems provide tools for all of the following except: A) assigning and managing customer service requests. B) capturing prospect and customer data. C) identifying profitable and unprofitable customers. D) qualifying leads. E) identifying opportunities for cross-selling. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 251

69) Selling a customer with a checking account a home improvement loan is an example of: A) operational CRM. B) direct marketing. C) sales force automation. D) cross-channel promotions. E) cross-selling. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 70) Major CRM products typically have all of the following service capabilities except: A) customer satisfaction management. B) returns management. C) call center & help desk. D) service analytics. E) order management. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 71) Which of the following is an important capability for sales processes that is found in most SFA modules in major CRM software products? A) Returns management B) Lead management C) Channel promotions management D) Events management E) Customer satisfaction management Answer: B Difficulty: Challenging AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

252

72) Which of the following customer relationship management applications provides analysis of customer data? A) Operational CRM B) Analytical CRM C) Operational SCM D) Analytical SFA E) Operational SFA Answer: B Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 73) Operational CRM applications include tools for all of the following except: A) sales force automation. B) call center support. C) marketing automation. D) customer service support. E) calculating CLTV. Answer: E Difficulty: Challenging AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 74) Which of the following tools is used to analyze customer buying patterns? A) CLTV B) Analytical CRM C) Operational CRM D) Demand planning E) SFA Answer: B Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

253

75) Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company? A) Churn rate B) Customer lifetime value C) Cost per lead D) Cost per sale E) Customer average value Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 76) The measurement of the number of customers who stop using or purchasing products or services from a company is called: A) switching costs. B) churn rate. C) CLTV. D) switch rate. E) turnover percentage. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 77) modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services. A) Customer B) ERM C) Marketing D) Complex E) SFA Answer: E Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

254

78) CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation. A) Analytical B) Employee C) Operational D) Partner E) Next-generation Answer: C Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 79) All CRM packages contain modules for PRM and ERM. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 80) Major CRM application software vendors include Oracle, SAP, Salesforce.com, and Microsoft Dynamics. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 81) Cross-selling is the marketing of complementary products to customers. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 82) CRM software can help organizations identify high-value customers for preferential treatments. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

255

83) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from other sources. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 84) Churn rate is an important indicator of the growth or decline of a company's customer base. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 85) Identify and describe the two types of customer relationship management applications. Answer: Operational CRM and analytical CRM are two types of CRM. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 86) Identify five benefits of customer relationship management systems. Answer: Benefits include: better customer service, make call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional products and services, provide customer information for developing new products, increase product utilization, reduce sales and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, respond quickly to market opportunities. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

256

87) You have been hired by Croydon Visiting Nurse Services, whose business processes are all manual, paper-based processes. How might a CRM system benefit them? Answer: A CRM system that includes patients' health records would allow any nurse to take over if another needed replacement. Assuming that the nurses had access via laptops or other PDAs to the system, a new nurse would have instant access to the patients' needs. The CRM might also be able to record which types of treatments or products customers were most interested in or gave the greatest benefit to customers and help anticipate needs. Additionally, with PRM capabilities, products needed by the nursing service would be more easily anticipated, ordered, and delivered. Since the employees work in the field, or away from a central office, Internet-based communications might provide tools for reviewing employee performance. Difficulty: Challenging AACSB: Analytical Thinking; Information Technology; Written and Oral Communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 88) What are four questions that a good CRM system can help answer and how do firms use the answers to those questions? Answer: Four questions that a good CRM system can help answer are: (1) What is the value of a particular customer to the firm over his or her lifetime?; (2) Who are our most loyal customers?; (3) Who are our most profitable customers?; and (4) What do these profitable customers want to buy? Firms use the answers to these questions to acquire new customers, provide better service and support to existing customers, customize their offerings more precisely to customer preferences, and provide ongoing value to retain profitable customers. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

257

89) What is a PRM module? How does it differ from an ERM module? Answer: The more comprehensive CRM packages contain modules for partner relationship management (PRM) and employee relationship management (ERM). PRM uses many of the same data, tools, and systems as customer relationship management to enhance collaboration between a company and its selling partners. If a company does not sell directly to customers but rather works through distributors or retailers, PRM helps these channels sell to customers directly. It provides a company and its selling partners with the ability to trade information and distribute leads and data about customers, integrating lead generation, pricing, promotions, order configurations, and availability. It also provides a firm with tools to assess its partners' performances so it can make sure its best partners receive the support they need to close more business. ERM software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training. Major CRM application software vendors include Oracle, SAP, Salesforce.com, and Microsoft Dynamics CRM. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy? 90) Which of the following statements about enterprise applications is not true? A) Enterprise applications require organizational learning. B) Enterprise applications introduce "switching costs." C) Enterprise applications are based on organization-wide definitions of data. D) Enterprise applications require fundamental changes in the way a business operates. E) Enterprise applications are best implemented when few changes in business processes are required. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 91) Which of the following is the undisputed global market leader in cloud-based SCM systems? A) Oracle B) SAP C) Microsoft D) Salesforce.com E) Epicor Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

258

92) Enterprise application vendors have created to make their own customer relationship management, supply chain management, and enterprise systems work closely together with each other. A) enterprise solutions B) ERP systems C) middleware D) legacy systems E) cloud solutions Answer: A Difficulty: Easy AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 93) Which of the following issues did Kmart experience when it first implemented SCM software? A) Cost overruns B) Inability to cross sell products C) Trouble generating reports D) Trouble getting products to store shelves E) Implementation delays Answer: D Difficulty: Challenging AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 94) tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes. A) Analytical CRM B) Social CRM C) Operational CRM D) PRM E) ERM Answer: B Difficulty: Easy AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

259

95) How did Office Depot reduce the cost of maintaining and managing its enterprise application? A) By avoiding customization B) By selecting enterprise application modules from multiple vendors C) By customizing its in-house system D) By implementing social CRM tools E) By adding business intelligence Answer: A Difficulty: Moderate AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 96) Enterprise systems do not require fundamental changes in the way the business operates. Answer: FALSE Difficulty: Easy AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 97) The cost of switching from one enterprise system to another is quite low. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 98) Enterprise applications are based on organization-wide definitions of data. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? 99) SCM systems require multiple organizations to share information and business processes. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

260

100) What is social CRM and how is it being used? Answer: Social CRM tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes. The leading CRM vendors now offer such tools to link data from social networks to their CRM software. SAP, Salesforce.com and Oracle CRM products now feature technology to monitor, track, and analyze social media activity in Facebook, LinkedIn, Twitter, YouTube, and other sites. Business intelligence and analytics software vendors such as SAS also have capabilities for social media analytics (with several measures of customer engagement across a variety of social networks) along with campaign management tools for testing and optimizing both social and traditional web-based campaigns. For example, Salesforce.com connected its system for tracking leads in the sales process with social-listening and social-media marketing tools, enabling users to tailor their social-marketing dollars to core customers and observe the resulting comments. If an ad agency wants to run a targeted Facebook or Twitter ad, these capabilities make it possible to aim the ad specifically at people in the client's lead pipeline who are already being tracked in the CRM system. Users will be able to view tweets as they take place in real time and perhaps uncover new leads. They can also manage multiple campaigns and compare them all to figure out which ones generate the highest click-through rates and cost per click. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? Essentials of MIS, 14e (Laudon/Laudon) Chapter 10 E-Commerce: Digital Markets, Digital Goods 1) What event marked the beginning of e-commerce? A) The first product sold online B) The first domain name registered C) The first email sent D) The first paid advertisements placed on a website E) The first product advertised online Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 2) All of the following are examples of social commerce companies except: A) Uber. B) Facebook. C) Twitter. D) Pinterest. E) Instagram. Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 261

3) A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n): A) exchange. B) marketspace. C) online marketplace. D) e-hub. E) net marketplace. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 4) When did e-commerce begin? A) 1965 B) 1983 C) 1995 D) 1999 E) 2000 Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 5) What standards are referred to when discussing universal standards as a unique feature of ecommerce? A) Internet technology standards B) Common spoken and written languages C) Universal measuring standards D) Universal advertising and media format standards E) EDI standards Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 6) All of the following are unique features of e-commerce technology, except: A) personalization/customization. B) interactivity. C) transparency. D) richness. E) global reach. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 262

7) Which of the following dimensions of e-commerce technology involves engaging consumers in a dialogue that dynamically adjusts the experience to the individual? A) Ubiquity B) Personalization/customization C) Richness D) Interactivity E) Information density Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

263

8) Which of the following dimensions of e-commerce technology involves the integration of video, audio, and text marketing messages into a single marketing message and consumer experience? A) Ubiquity B) Personalization/customization C) Richness D) Interactivity E) Social technology Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 9) Which of the following dimensions of e-commerce technology has the potential to raise the quality of information? A) Information density B) Richness C) Customization D) Interactivity E) Global reach Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 10) The effort required to locate a suitable product is called: A) price discrimination. B) search costs. C) menu costs. D) shopping costs. E) location costs. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 11) Information density refers to the: A) richness–complexity and content–of a message. B) total amount and quantity of information delivered to consumers by merchants. C) total amount and quantity of information available to all market participants. D) amount of information available to reduce price transparency. E) amount of physical storage space needed to store data about a specific entity, such as a product or consumer. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 264

12) Selling the same goods to different targeted groups at different prices is called: A) cost customization. B) cost optimization. C) price gouging. D) cost personalization. E) price discrimination. Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 13) Information exists when one party in a transaction has more information that is important for the transaction than the other party. A) transparency B) asymmetry C) complexity D) discrimination E) competition Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 14) Changing the prices of products based on the level of demand characteristics of the customer is called pricing. A) menu B) dynamic C) flexible D) asymmetric E) customized Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 15) Removing the business process layers in a distribution channel is called: A) disintermediation. B) BPR. C) market segmentation. D) network effects. E) market transparency. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 265

16) In digital markets: A) search costs increase. B) menu costs decline. C) disintermediation is less likely. D) network effects are weaker. E) information asymmetry increases. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 17) Compared to digital markets, traditional markets have: A) lower search costs. B) stronger network effects. C) higher delayed gratification effects. D) reduced information asymmetry. E) higher transaction costs. Answer: E Difficulty: Challenging AACSB: Analytical Thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 18) Compared to traditional goods, digital goods have: A) lower marginal costs of production. B) higher delivery costs. C) higher copying costs. D) higher inventory costs. E) higher marginal costs. Answer: A Difficulty: Challenging AACSB: Analytical Thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 19) Compared to digital goods, traditional goods have: A) lower inventory costs. B) lower marginal costs per unit. C) lower copying costs. D) less variable pricing. E) higher costs of distribution. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

266

20) What is the primary benefit to consumers of disintermediation? A) Faster service B) Lower costs C) Higher quality D) Greater choices E) None, because disintermediation primarily benefits manufacturers. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 21) What is the difference between personalization and customization, as applied to e-commerce technologies? A) Customization is any type of adjustment made to a product by the user; personalization refers to a business changing a product or service for the user. B) Personalization is any type of adjustment made to a product by the user; customization refers to a business changing a product or service for the user. C) Customization refers to adjusting marketing messages for a consumer; personalization refers to adjusting a product or service based on a user's preferences. D) Personalization refers to adjusting marketing messages for a consumer; customization refers to adjusting a product or service based on a user's preferences. E) There is no difference. Both terms refer to changing a product or communication for the consumer. Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 22) E-commerce refers to the use of the Internet and the web to transact business. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 23) Retail consumer e-commerce is growing at single-digit rates. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 24) The Internet increases information asymmetry. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

267

25) All previous mass media in modern history, including the printing press, use a broadcast model where content is created in a central location by experts. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 26) Disintermediation provides major benefits to the consumer. Answer: TRUE Difficulty: Moderate AACSB: Analytical Thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 27) In general, for digital goods, the marginal cost of producing another unit is about zero. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 28) Traditional online marketing, such as display ads, have been replaced by video ads. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 29) Information asymmetry exists when there is more information about one product than there is about a similar product. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 30) Cost transparency refers to the ability of consumers to discover what merchants actually pay for products. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 31) Switching costs are the merchants' costs of changing prices. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

268

32) Behavioral targeting refers to targeting ad messages to a person's clickstream behavior. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 33) What is the most profound way in which e-commerce and the Internet have changed the relationship between companies and their customers? Support your answer. Answer: Student answers will vary. A sample answer is: The most profound way in which ecommerce and the Internet have changed this relationship is in the shrinking of information asymmetry. An information asymmetry exists when one party in a transaction has more information that is important for the transaction than the other party. That information helps determine their relative bargaining power. In digital markets, consumers and suppliers can "see" the prices being charged for goods, and in that sense digital markets are said to be more "transparent" than traditional markets. For example, until auto retailing sites appeared on the web, there was a pronounced information asymmetry between auto dealers and customers. Only the auto dealers knew the manufacturers' prices, and it was difficult for consumers to shop around for the best price. Auto dealers' profit margins depended on this asymmetry of information. Today's consumers have access to a legion of websites providing competitive pricing information, and three-fourths of U.S. auto buyers use the Internet to shop around for the best deal. Thus, the web has reduced the information asymmetry surrounding an auto purchase. The Internet has also helped businesses seeking to purchase from other businesses reduce information asymmetries and locate better prices and terms. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 34) "Knowledge increases exponentially" is a phrase with which we are all familiar. How does this concept apply to the emergence of the digital firm? Support your contentions. Answer: Student answers will vary. A sample answer is: The exponential increases of knowledge refer to shared information. For example, once the concept of a wheel is established, inheritors of that knowledge do not have to "reinvent the wheel." The Internet is a tool similar to the wheel: it is based on shared standards and universal tools. The Internet and shared networking technologies are allowing new techniques for attracting customers and selling customers to be developed and adapted very quickly. For example, although early Internet retailers had difficulty setting up secure credit card transactions and payment systems, today there are many systems in place as vendors step in to create shared tools for doing this. The Internet is fostering shared knowledge and, as such, propagating ever greater increases in that knowledge. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

269

35) What are digital goods, and how does the Internet impact the market for digital goods? Answer: Digital goods are goods that can be delivered over a digital network. Music tracks, video, Hollywood movies, software, newspapers, magazines, and books can all be expressed, stored, delivered, and sold as purely digital products. For the most part, digital goods are intellectual property, which is defined as "works of the mind." Intellectual property is protected from misappropriation by copyright, patent, and trade secret laws. Today, all these products are delivered as digital streams or downloads while their physical counterparts decline in sales. The impact of the Internet on the market for digital goods is nothing short of revolutionary. Businesses dependent on physical products for sales—such as bookstores, music stores, book publishers, music labels, and film studios—face the possibility of declining sales and even destruction of their businesses. In general, for digital goods, the marginal cost of producing another unit is about zero (it costs nothing to make a copy of a digital file such as a music file). However, the cost of producing the original first unit is relatively high—in fact, it is nearly the total cost of the product because there are few other costs of inventory and distribution. Costs of delivery over the Internet are very low, inventory costs are low, marketing costs often remain the same, and pricing can be highly variable. On the Internet, the merchant can change prices as often as desired because of low menu costs. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 36) What is dynamic pricing and how is it used in e-commerce? Answer: In dynamic pricing, the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller. For instance, online retailers from Amazon to Walmart change prices on many products based on time of day, demand for the product, and users' prior visits to their sites. Using big data analytics, some online firms can adjust prices at the individual level based on behavioral targeting parameters such as whether the consumer is a price haggler (who will receive a lower price offer) versus a person who accepts offered prices and does not search for lower prices. Prices can also vary by zip code, with higher prices set for poor sections of a community. Uber, along with other ride services, uses surge pricing to adjust prices of a ride based on demand (which always rises during storms and major conventions). Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

270

37) Describe the use of personalization and customization in e-commerce. What business value do these techniques have? Answer: In personalization, merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. For example, Amazon.com greets each logged-in user with the user's user name. With customization, merchants can change the delivered product or service based on a user's preferences or prior behavior. The Wall Street Journal Online allows you to select the type of news stories you want to see first and gives you the opportunity to be alerted when certain events happen. The ability of Internet technology to track customer behavior at websites, along with records of purchases and other behavior, allows merchants to create a detailed profile of a customer. These profiles can be used to create unique personalized web pages that display content or ads for products or services of special interest to each user, improving the customer's experience and creating additional value. The business value of personalization is reduced marketing costs, as you spend only the money to target customers that are more likely to be receptive and are more profitable, and improved sales results, from increased customer response to personalized sites that better serve their own purposes and shopping needs. Personalization can achieve some of the benefits of using individual salespeople for dramatically lower costs. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods? 38) Amazon.com is known primarily for its use of which of the following business models? A) Content provider B) Portal C) Market creator D) E-tailer E) Transaction broker Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 39) Craigslist is an example of: A) C2C e-commerce. B) B2B e-commerce. C) B2C e-commerce. D) M-commerce. E) P2P e-commerce. Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

271

40) Which of the following types of e-commerce involves businesses selling goods and services directly to individuals via the Internet? A) B2C e-commerce B) B2B e-commerce C) C2C e-commerce D) M-commerce E) P2P e-commerce Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 41) Which of the following is an example of a company primarily engaged in B2B e-commerce? A) Apple Music B) Walmart C) Elemica D) Uber E) Craigslist Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 42) Transaction brokers: A) generate revenue from advertising or from directing buyers to sellers. B) save users money and time by processing online sales transactions. C) provide a digital environment where buyers and sellers can establish prices for products. D) sell physical products directly to consumers or individual businesses. E) provide online meeting places where people with similar interests can communicate. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 43) Which of the following Internet business models involves a merchant creating an online digital environment that enables people with like interests to share information? A) Community provider B) Service provider C) Market creator D) Transaction broker E) Portal Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

272

44) Market creators: A) save users money and time by processing online sales transactions. B) provide a digital environment where buyers and sellers can establish prices for products. C) create revenue by providing digital content over the web. D) sell physical products directly to consumers or individual businesses. E) generate revenue from advertising or from directing buyers to sellers. Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 45) Which of the following best illustrates the sales revenue model? A) eBay receives a small fee from a seller if a seller is successful in selling an item. B) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase. C) Pandora provides basic services for free but charges a premium for advanced services. D) Apple accepts micropayments for single music track downloads. E) Netflix charges customers a monthly fee for access to its library of movies. Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 10-2: What are the principal e-commerce business and revenue models? 46) Uber uses the business model. A) service provider B) market creator C) community provider D) portal E) transaction broker Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 47) Which of the following best illustrates the transaction fee revenue model? A) eBay receives a small fee from a seller if a seller is successful in selling an item. B) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase. C) Pandora provides basic services for free but charges a premium for advanced services. D) Apple accepts micropayments for single music track downloads. E) Netflix charges customers a monthly fee for access to its library of movies. Answer: A Difficulty: Moderate AACSB: Analytical Thinking LO: 10-2: What are the principal e-commerce business and revenue models?

273

48) In the revenue models, a firm offers some services for free but charges a subscription fee for premium services. A) free/freemium B) subscription C) transaction fee D) affiliate E) sales Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 49) Content providers use systems to process large amounts of very small monetary transactions cost-effectively. A) subscription B) mobile payment C) transaction fee D) micropayment E) affiliate revenue Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 50) Which of the following best illustrates the advertising revenue model? A) eBay receives a small fee from a seller if a seller is successful in selling an item. B) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase. C) Facebook provides a social network for free but shows sponsored content in users' News Feeds. D) Apple accepts micropayments for single music track downloads. E) Netflix charges customers a monthly fee for access to its library of movies. Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 10-2: What are the principal e-commerce business and revenue models? 51) Which of the following companies uses the subscription revenue model? A) Expedia B) E*Trade C) Facebook D) Netflix E) Google Search Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 274

52) E*Trade uses which of the following revenue models? A) Advertising B) Transaction fee C) Subscription D) Freemium E) Affiliate Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 53) Uber uses a form of dynamic pricing. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 54) Expedia is an example of the transaction broker business model. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 55) Yahoo is an example of the portal business model. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 56) Podcasting allows subscribers to listen to live, streaming radio and other audio content. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models? 57) In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

275

58) List and describe at least five different Internet business models. Which of these models do you think would be the riskiest for a startup business today? Support your answer. Answer: Internet business models include: e-tailer, transaction broker, market creator, content provider, community provider, portal, and service provider. The choice of riskiest model will depend on the individual student. A sample answer is: Today the riskiest model would be a content-provider, because most, if not all, of the major offline entertainment and content producers such as television networks and newspapers are online. They would be your competitors, and already have the means for content creation and distribution in place. All of the other business models do not have the risk of creating brand new content. Difficulty: Easy AACSB: Analytical Thinking; Written and Oral Communication LO: 10-2: What are the principal e-commerce business and revenue models? 59) List and describe the three main categories of e-commerce. Which do you think is ultimately the most valuable to the individual consumer? Support your answer. Answer: Business-to-consumer, business-to-business, and consumer-to-consumer. All three are valuable to the consumer, but in the long run, business-to-business may be the most valuable to the individual consumer because it will reduce prices and increase both goods and services. (Other opinions, of course, are supportable.) Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 10-2: What are the principal e-commerce business and revenue models? 60) What methods could a portal use to generate revenue? Which do you think might be most successful, and why? Answer: Advertising, subscriptions, selling collected marketing information, and directing buyers to sellers could all generate revenue. Student evaluations will vary. A sample answer is: I would think the most successful method would be through collecting marketing information, because as a portal that links to large amounts of external information and attracts repeat customers, the portal would have the opportunity to gather a lot of information about each user. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 10-2: What are the principal e-commerce business and revenue models? 61) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business models for this opportunity? Answer: Student answers will vary. A sample answer is: In terms of B2B e-commerce, Lucky's might be able to procure goods over the Internet, use a private industrial network to coordinate their supply chain with suppliers and manage inventory. Depending on the structure of the gasoline retail business, industry net marketplaces and exchanges might be of use. In terms of B2C e-commerce, there are not many opportunities, as it is inefficient to sell gasoline over the Internet. Lucky's could make sure that its stations are listed in popular location-based mobile services that help drivers find nearby gas stations. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 10-2: What are the principal e-commerce business and revenue models? 276

62) Ikea asked for the help of its customers in designing new furniture. This is an example of: A) prediction markets. B) behavioral targeting. C) long-tail marketing. D) social shopping. E) crowdsourcing. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 63) Using the Internet to find potential customers inexpensively for products that have low demand is an example of: A) clickstream advertising. B) behavioral targeting. C) online profiling. D) long-tail marketing. E) crowdsourcing. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 64) Which of the following best describes the digital social graph? A) A person's direct and indirect relationships B) All of a person's closest digital relationships C) A collection of millions of personal social graphs D) All of the online and offline relationships a person has E) All of the relationships in an online community Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 65) Which of the following marketing formats is sales-oriented, rather than branding-oriented or a mix? A) Lead generation B) Search engine C) Rich media D) Display ads E) Video Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 277

66) Facebook's Like button is an example of which of the following? A) Social sign-on B) Collaborative shopping C) Network notification D) Social search E) Newsfeed Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 67) An environment where consumers can share their shopping experiences with one another by viewing products, chatting, or texting about brands, products, and services is an example of: A) network notification. B) web personal marketing. C) collaborative shopping. D) social search. E) social sign-on. Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 68) involves placing ads in social network newsfeeds or within traditional editorial content, such as a newspaper article. A) Behavioral targeting B) Crowdsourcing C) Native advertising D) Demand prediction software E) Lead generation marketing Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 69) Social marketing enables firms to tightly control their brands. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 70) Behavioral targeting occurs at individual websites and within apps. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 278

71) Advertising networks track a user's behavior at thousands of websites. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 72) Viral marketing is like traditional word-of-mouth marketing except that it is spread via online communities. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 73) Search engine marketing is the largest form of online marketing. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-3: How has e-commerce transformed marketing? 74) List and describe the top four methods of online marketing and advertising formats, in terms of estimated 2019 revenue. Answer: The top five methods of online advertising are: display ads, which are banner ads with interactive features that increasingly are behaviorally targeted to individual web activity (an estimated $70 billion); search engine marketing, which employs text ads targeted at precisely what the customer is looking for at the moment of shopping and purchase (an estimated $53.7 billion); video ads, which are the fastest-growing format, and use engaging, entertaining, interactive video that are also often behaviorally targeted (an estimated $36 billion); and rich media ads, which use interactive, targeted, entertaining animations, games and/or puzzles (an estimated $41.3 billion). Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 10-3: How has e-commerce transformed marketing?

279

75) You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services? Answer: Student answers will vary. A sample answer is: For marketing research, you could advertise on search engines. You could pay for marketing research at relevant portals. You could also collect customer information from the company's website. You could monitor relevant blogs to see what issues are of concern in juvenile justice, so as to address these concerns in your advertising campaigns. To advertise, you could advertise on search engine results and at relevant portals or legal information content providers. If it were feasible, you could create a juvenile justice portal and blog for the company in order to attract users from whom you could gather market research as well as promote your services. You might also want to investigate social network marketing–assuming that your clients might be the best leads for other clients. Difficulty: Challenging AACSB: Information Technology; Written and Oral Communication LO: 10-3: How has e-commerce transformed marketing? 76) Website tracking software can log the path a customer took through the website, the time spent on the site, and what geographic area, in general, the customer is from, all of which can help in customer analysis. It can also log the customer's operating system and which browser the customer is using. How could these last two data items be of interest to a company? Give examples. Answer: Student answers will vary but should include an understanding that customer OS and browser interact technologically with a website and might be relevant in data analysis. An example is: Customer OSs and browsers could help a company determine what technical functionalities could be used in the site. For example, if it found out that a significant percentage of its users are using mobile browsers, they might want to make sure that the website is easily used by various mobile devices. Secondly, this data might be relevant in data mining or other analysis. For example, a retail clothing company might find that a significant portion of their most valued customers use an Apple operating system, and from other data analysis know that Apple users are more likely to purchase cashmere sweaters. Then the company may want to place a greater emphasis on selling the cashmere sweaters. Difficulty: Moderate AACSB: Information Technology; Written and Oral Communication LO: 10-3: How has e-commerce transformed marketing? 77) Which of the following statements about EDI is not true? A) Each major industry in the United States has EDI standards. B) Today, EDI is only used for document automation. C) Many organizations still use private networks for EDI. D) EDI systems are increasingly web-enabled. E) About 80 percent of online B2B e-commerce is still based on EDI. Answer: B Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

280

78) The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called: A) e-procurement. B) SCM. C) procurement. D) distribution E) production. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 79) A secure website that links a large firm to its suppliers and other key business partners is called a(n): A) e-hub. B) marketspace. C) exchange. D) private industrial network. E) net marketplace. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 10-4: How has e-commerce affected business-to-business transactions? 80) Which of the following statements about Net marketplaces is not true? A) Some Net marketplaces sell direct goods. B) Some Net marketplaces serve vertical markets. C) Some Net marketplaces sell indirect goods. D) Some Net marketplaces support contractual purchases based on long-term relationships. E) Some Net marketplaces are owned by a single firm and used to link solely to the firm's suppliers and key business partners. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 81) Which of the following statements about exchanges is not true? A) Exchanges are independently owned third-party Net marketplaces. B) Some exchanges provide vertical markets. C) Exchanges are the most successful form of B2B commerce. D) Some exchanges enable a spot market. E) Go2Paper is an example of an exchange. Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 281

82) Which of the following is an example of a direct good in the automobile industry? A) Computer equipment B) Paper C) Office furniture D) Roofing shingles E) Sheet steel Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 83) Which of the following is an example of a private industrial network? A) Exostar B) Go2Paper C) Elemica D) Expedia E) VW Group Supply Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 84) Procurement involves all of the following except: A) negotiating with suppliers. B) paying for goods. C) making delivery arrangements. D) sourcing. E) production scheduling. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 85) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 10-4: How has e-commerce affected business-to-business transactions? 86) Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 282

87) Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 88) Sheet steel for auto body production is an example of indirect goods. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 10-4: How has e-commerce affected business-to-business transactions? 89) Which of the following is the largest mobile advertising market? A) Google B) Yahoo C) Facebook D) Microsoft E) Twitter Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications? 90) A new social mobile app you are developing allows users to find friends who are logged in and within a 10-mile radius. This would be categorized as a service. A) geosocial B) geoinformation C) geoadvertising D) geomapping E) geolocating Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

283

91) Geoadvertising sends ads to users based on their: A) GPS locations. B) home addresses. C) shopping preferences. D) website behaviors. E) Google Maps settings. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications? 92) What percent of online retailers now have m-commerce websites? A) 25 percent B) 45 percent C) 65 percent D) 75 percent E) 85 percent Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications? 93) Which of the following is not an example of location-based services? A) Foursquare B) Google Maps C) Waze D) Uber E) Netflix Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

284

94) Define location-based services and describe the main categories of these services. Which of the categories do you feel has the most potential in terms of e-commerce revenues, and why? Answer: Location-based services are services that use GPS mapping services available on smartphones to deliver value-added services. They include geosocial services, geoadvertising, and geoinformation services. A geosocial service can tell you where your friends are meeting. Geoadvertising services can tell you where to find the nearest Italian restaurant, and geoinformation services can tell you the price of a house you are looking at, or about special exhibits at a museum you are passing. Student answers as to the most valuable of these services will vary; an example is: I feel that geoadvertising services have the most potential for profit, as it is based on a profit-making mechanism: advertising. Geosocial services and geoinformation services, by themselves, are more content- and communication-oriented. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications? 95) What are geosocial services and how are they being used? Answer: Geosocial services help you find friends, or your friends to find you, by checking in to the service, announcing your presence in a restaurant or other place. Your friends are instantly notified. About 20 percent of smartphone owners use geosocial services. One example of a firm using geosocial services is Foursquare. Foursquare provides a location-based social networking service to 50 million registered individual users, who may connect with friends, update their location, and provide reviews and tips for enjoying a location. Points are awarded for checking in at designated venues. Users choose to post their check-ins on their accounts on Twitter, Facebook, or both. Users also earn badges by checking in at locations with certain tags, for check-in frequency, or for the time of check-in. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications? 96) Which of the following is a milestone for the Phase 1: Planning phase of developing an ecommerce presence? A) Website plan B) Web mission statement C) Functional website D) Social media plan E) Mobile media plan Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence?

285

97) Which of the following is a milestone for the website development phase of building an ecommerce presence? A) Web mission statement B) Social media plan C) Website plan D) Web presence map E) Functional website Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence? 98) In planning a robust e-commerce presence, you will want to consider the blog platform as part of your presence. A) social media B) email C) community D) websites E) offline media Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence? 99) Which of the following is not one of four types of presence to be considered when building an e-commerce presence? A) Offline media B) Websites C) Social media D) Corporate E) Email Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence?

286

100) What are the steps involved in developing an e-commerce presence for a start-up company? Answer: A one-year timeline for developing an e-commerce presence for a start-up company would involve the following: Phase 1: Planning, which involves envisioning the company's web presence and determining personnel, and producing a web mission statement; Phase 2: Website development, which involves acquiring content, developing a website design, arranging for hosting a website, and producing a website plan; Phase 3: Web implementation, which involves developing keywords and metatags, focusing on search engine optimization, identifying potential sponsors, and producing a functional website; Phase 4: Social media plan, which involves identifying appropriate social platforms and content for the company's products and services, and producing a social media plan; Phase 5: Social media implementation, which involves developing Facebook, Twitter and Pinterest presences, and results in a functioning social media presence, and Phase 6: Mobile plan, which involves developing a mobile media plan and considering options for porting the website. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 10-6: What issues must be addressed when building an e-commerce presence? Essentials of MIS, 14e (Laudon/Laudon) Chapter 11 Improving Decision Making and Managing Knowledge 1) Which of the following statements best describes the business value of improved decision making? A) Improved decision making creates better products. B) Improved decision making can result in a large monetary value for the firm as numerous small daily decisions affecting efficiency, production, costs, and more add up to large annual values. C) Improved decision making enables senior executives to more accurately foresee future financial trends. D) Improved decision making strengthens customer and supplier intimacy, which reduces costs. E) Improved decision making creates a better organizational culture. Answer: B Difficulty: Challenging AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 2) Where there is no well-understood or agreed-on procedure for making a decision, it is said to be: A) undocumented. B) unstructured. C) documented. D) semistructured. E) low-level. Answer: B Difficulty: Moderate AACSB: Application of Knowledge 287

LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 3) The type of decision that can be made by following a definite procedure is called a(n) decision. A) operational B) unstructured C) semistructured D) procedural E) structured Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work?

288

4) Which types of decisions are more prevalent at lower organizational levels? A) Procedural decisions B) Unstructured decisions C) Structured decisions D) Semistructured decisions E) Operational decisions Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 5) decisions are most common at higher levels of management. A) Semistructured B) Unstructured C) Structured D) Undocumented E) Procedural Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 6) Operational management typically makes which type of decisions? A) Semistructured B) Documented C) Structured D) Procedural E) Low-level Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 7) Deciding whether to introduce a new product line is an example of a(n): A) semistructured decision. B) procedural decision. C) nonprocedural decision. D) operational decision. E) unstructured decision. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 289

8) Developing a marketing plan is an example of what kind of decision scenario? A) Semistructured B) High velocity C) Unstructured D) Procedural E) Operational Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 9) Which phase of decision-making finds or recognizes a problem? A) Design B) Intelligence C) Choice D) Implementation E) Definition Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 10) Which of the following is an example of a high-velocity automated decision process? A) Strategic decision making B) Operational decision making C) Credit granting decisions D) Providing online search results E) Discovering and identifying the nature of a decision problem Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work?

290

11) A decision that reflects a rational process fulfills which of the following dimensions of quality with respect to decision making? A) Comprehensiveness B) Accuracy C) Fairness D) Coherence E) Due process Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 12) A decision that faithfully reflects the concerns and interests of affected parties fulfills which of the following dimensions of quality with respect to decision making? A) Due process B) Justice C) Fairness D) Coherence E) Accuracy Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 13) A decision that reflects reality fulfills which of the following dimensions of quality with respect to decision making? A) Due process B) Justice C) Fairness D) Coherence E) Accuracy Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work?

291

14) A decision that reflects a full consideration of the facts and circumstances fulfills which of the following dimensions of quality with respect to decision making? A) Due process B) Comprehensiveness C) Fairness D) Coherence E) Accuracy Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 15) You are answering phones for a local utilities provider and are speaking with an extremely angry customer. Because your company manual advises employees to transfer hostile calls to a superior, you do this. This decision reflects which of the following dimensions of quality with respect to decision making? A) Due process B) Justice C) Fairness D) Coherence E) Accuracy Answer: A Difficulty: Moderate AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 16) Which of the following is a typical middle management decision? A) What should our departmental budget be? B) Should we close a factory? C) Should we introduce our product to overseas markets? D) Should we discontinue this product? E) Which product is selling the best in overseas markets? Answer: A Difficulty: Challenging AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 17) If a solution to problem that you have chosen does not work, you can return to an earlier stage in the decision-making process and repeat it. Answer: TRUE Difficulty: Moderate AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 292

18) In high-velocity automated decision making, humans are eliminated from the decision chain. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 19) A bank's decision to give a customer a mortgage is an example of an unstructured decision. Answer: FALSE Difficulty: Moderate AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 20) A coherent decision is one that can be rationally explained to others. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 21) The use of high-velocity automated decision making eliminates the risk inherent in human decision making. Answer: FALSE Difficulty: Challenging AACSB: Analytical Thinking LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 22) Unstructured decisions are novel, important, and not routine. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 11-1: What are the different types of decisions, and how does the decision-making process work?

293

23) You are the CIO at an insurance firm and a manager has proposed implementing expensive new project management software that would help increase the efficiency of the IT staff. The idea of improved efficiency sounds good, but is there any way you can evaluate her decision before purchasing the software? Be specific. Answer: Student answers will vary but should utilize the steps of the decision-making process and/or the qualities of decisions as a means of evaluation. A sample answer is: Yes, you can ask the manager to describe her decision-making process and evaluate the decision according to the steps she has taken. For example, how was she able to identify efficiency as a problem that needed solving? Is it the most pressing problem? What were the various solutions considered for the problem and what criteria did she choose to evaluate them? You can also evaluate the manager's decision according to the various qualities of decision making: Accuracy (does the decision reflect reality?), comprehensiveness (does the decision reflect a full consideration of the facts and circumstances?), fairness (does the decision faithfully reflect the concerns and interests of affected parties?), speed (is the decision making efficient with respect to time and other resources?), coherence (does the decision reflect a rational process that can be explained to others and made understandable?), and due process (is the decision the result of a known process and can it be appealed to a higher authority?). Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 24) Identify and describe the different types of decisions. Answer: There are three main types of decisions: structured, semistructured, and unstructured. Unstructured decisions are those in which the decision maker must provide judgment, evaluation, and insight to solve the problem. They are novel, important, and not routine, and there is no wellunderstood or agreed-on procedure for making them. Structured decisions are repetitive and routine, and they involve a definite procedure for handling. In semistructured decisions, only part of the problem has a clear-cut answer provided by an accepted procedure. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 25) Describe the stages of organizational decision making. Answer: There are four stages in decision making: intelligence, design, choice, and implementation. Intelligence is the stage of identifying that a problem exists and defining it. In the design stage, the various solutions available are discussed and formulated. In the choice stage, the organization decides which solution is the most viable. In the implementation stage, the organization makes the chosen solution work and monitors how well it is doing. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 11-1: What are the different types of decisions, and how does the decision-making process work?

294

26) How are high-frequency trading programs at electronic stock exchanges able to execute trades within nanoseconds? What issues does this potentially pose? Answer: In these high-speed automated decisions, humans are eliminated from the decision chain because they are too slow. The intelligence, design, choice, and implementation parts of the decision-making process are instead captured by computer algorithms that precisely define the steps to be followed to produce a decision. The people who wrote the software identified the problem, designed a method for finding a solution, defined a range of acceptable solutions, and implemented the solution. In these situations, organizations are making decisions faster than managers can monitor or control, and great care needs to be taken to ensure the proper operation of these systems to prevent significant harm. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 11-1: What are the different types of decisions, and how does the decision-making process work? 27) Which of the following is not one of the six main elements of the business intelligence environment? A) User interface B) Organizational culture C) Delivery platform D) Business analytics toolset E) Data from the business environment Answer: B Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 28) Which of the following would be a typical parameterized report for an organization's marketing group? A) Variability of sales by region and time B) Marketing campaign effectiveness C) Customer satisfaction report D) Impressions and conversion on the firm's website E) Sales forecast for a single product Answer: A Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making?

295

29) In a dashboard, users can: A) drill down to more finely grained information. B) create their own reports based on custom queries. C) view overall firm performance data. D) view data according to different dimensions of the data. E) predict future outcomes according to changing circumstances. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 30) Which of the following BI functionalities would you use to assess the likelihood of students dropping out of a college program? A) Parameterized reports B) Balanced scorecard C) Ad hoc queries D) Production reports E) Predictive analytics Answer: E Difficulty: Moderate AACSB: Analytical Thinking LO: 11-2: How do business intelligence and business analytics support decision making? 31) What is the name of a decision support tool that asks what-if questions repeatedly to predict outcomes in a variety of situations? A) Key performance indicators B) Predictive analytics C) Ad hoc query D) Sensitivity analysis E) Pivot table Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 32) Why is the balanced scorecard method said to be "balanced"? A) It uses measurable dimensions for assessing performance. B) It assesses both the internally focused and externally focused business processes. C) It measures performance along all major divisions of a firm, from production and manufacturing to human resources. D) It measures performance of all levels of a firm, from executives to operational employees and data workers. E) It causes managers to focus on more than just financial performance. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 296

33) What kind of decision-making tool could help you develop a recommended system for your firm's website which has over 1 million visitors a month? A) Big data analytics B) Sensitivity analysis C) Goal seeking D) Forecasting E) Simulation Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 34) Backward sensitivity analysis software is used for: A) supply chain optimization. B) historical what-if analysis. C) goal seeking. D) reverse forecasting. E) customer analysis. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 35) Which type of information system uses data visualization technology to analyze and display data for planning and decision making in the form of digitized maps? A) GIS B) DSS C) GSS D) TPS E) MIS Answer: A Difficulty: Easy AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making?

297

36) According to the chapter case, which statement is not true about Siemens AG's use of process mining software? A) The process mining software was enthusiastically adopted by Siemens' managers. B) The process mining software used by Siemens uses artificial intelligence techniques to create process models. C) Siemens used processing mining tools to learn how quickly it pays its suppliers. D) The processing mining software used by Siemens can analyze millions of transaction records and spot deviations from normal workflows. E) Siemens used process mining software to study inefficiencies in the way it takes orders from and is paid by its customers. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 37) A KPI is: A) an industry standard for measuring performance along a given dimension. B) a measure proposed by senior management. C) an alternative to the balanced scorecard method. D) an analytic technique for measuring financial performance. E) a measurement of knowledge performance. Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 38) A restaurant client has asked you to develop a system that would provide smartphone alerts about special discounts to potential customers in the vicinity. Which of the following tools will provide the solution? A) Genetic algorithms B) Neural networks C) Location analytics D) Operational analytics E) Big data analytics Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 11-2: How do business intelligence and business analytics support decision making?

298

39) is a management methodology that translates a firm's strategies into operational targets. A) BPM B) KPI C) Balanced scorecard D) OLAP E) GIS Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 40) help users gain information from large amounts of geographically linked data. A) Data visualization tools B) GIS C) Predictive analytics D) Location analytics E) CAD systems Answer: D Difficulty: Easy AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 41) A(n) table is a spreadsheet feature that displays two or more dimensions of data in a convenient format. A) pivot B) drill-down C) ad hoc D) multitier E) sensitivity Answer: A Difficulty: Easy AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 42) A(n) capability allows users to view more detailed views of data. A) ad hoc B) drill-down C) query and reporting D) metrics E) VRML Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making?

299

43) Which of the following are considered power users of business intelligence? A) IT developers B) Customers C) Operational employees D) Senior managers E) Clerical staff Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 44) You are the CEO of a national apparel retail chain and want to add three new stores. Which of the following tools will best help you find the most potentially profitable new locations? A) Pivot tables B) Sensitivity analysis C) GIS D) Location analytics E) Intelligent agent Answer: C Difficulty: Moderate AACSB: Analytical Thinking LO: 11-2: How do business intelligence and business analytics support decision making? 45) All of the following supply the foundation infrastructure for business intelligence except: A) databases. B) data warehouses. C) data marts. D) Hadoop. E) OLAP. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 46) Which of the following is not a part of the business analytics toolset? A) Models B) Data mining C) Reporting and query tools D) OLAP E) Expert systems Answer: E Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making?

300

47) Predictive analytics uses all of the following to predict future trends and behavior patterns except: A) statistical analysis. B) data mining techniques. C) balanced scorecards. D) historical data. E) assumptions about future conditions. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 48) Which of the following is driving the movement toward smart cities? A) Augmented reality B) Big data analytics C) Business intelligence D) Business analytics E) Cognitive computing Answer: B Difficulty: Easy AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 49) Data from fuel tank sensors that help a trucking company identify the optimal location at which a driver should stop for fuel based on how much is left in the tank, the truck's destination, and fuel prices en route, is an example of which of the following? A) Operational intelligence B) Sensitivity analysis C) KPI D) Parameterized report E) Genetic algorithm Answer: A Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 50) Which of the following is the BI delivery platform for super users? A) GIS B) MIS C) DSS D) ESS E) BPM Answer: C Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 301

51) The balanced scorecard framework focuses on measurable outcomes of all of the following dimensions of firm performance except: A) financial. B) business process. C) customer. D) supplier relations. E) learning and growth. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 52) Monitoring day-to-day decision making involves operational intelligence. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 53) DSS primarily address structured problems. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 54) Business intelligence and analytics are products defined by software vendors. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 55) What-if analysis allows the user to vary certain values to test results to predict outcomes when there are no changes in the value of key conditions. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making? 56) Parameterized reports look at the impact of several factors to understand sales patterns. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 11-2: How do business intelligence and business analytics support decision making?

302

57) Data visualization technologies are used to help human users see patterns and relationships in large amounts of data. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 58) Virtual reality enhances visualization by overlaying digital data and images onto a physical real-world environment. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 59) Dashboards and scorecards are visual interfaces used to make a firm's information easier to review quickly. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 60) Employees below the senior executive level use ESS to monitor and measure business performance in their areas of responsibility. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-2: How do business intelligence and business analytics support decision making? 61) Why are managerial users and methods considered an important part of the BI environment? Answer: Managerial users and methods are an important part because the hardware and software of business intelligence are only tools–they are only as useful or intelligent as their users. The managers using the BI tools will decide how important or unimportant various business goals are, choose what analytic tools are used, and determine whether and how to measure progress towards those goals, and how they evaluate the tools themselves. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making?

303

62) You are a city transportation planner and are interested in improving the city's bus service. What types of analytic tools might help you do this, and how would you use them? Answer: To help plan an efficient bus system you could use some kind of decision support system (DSS). Ideally, you will want to use predictive analytics to see how potential changes in the service would affect various elements such as riders and speed. You could use big data predictive modeling and location analytics to gain insight from existing service and routes and prioritize service. You might be able to use a neural network or genetic algorithms to optimize bus routes and schedules. You could also use intelligent agents to model the behavior of customers, buses, other traffic, to simulate different conditions in the bus system environment and perform what-if analyses. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making? 63) Not all business intelligence users are managers interested in forecasting sales figures for the next quarter. What different types of users are there for a business's intelligence systems? Answer: Business intelligence users include everyone from operational employees, customers, and suppliers, through managers, knowledge workers, and senior executives. These users can be ordinary or casual users, who rely on the pre-packaged reports given by the system, or they can be super users, who create custom reports and use the more advanced features of the system for custom analyses. Super users can occur at any level of the organization. An operational level super user is likely to be involved in IT development, while a managerial level super user is more likely to be a business analyst. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making? 64) What is big data? How does it provide business value? Answer: Big data is a term to describe the massive amount of data generated by social media, customer transactions, and output from machines and sensors. It is valuable to the business because it provides ways to find new methods of analyzing sales, customers, and more, and make better predictions, improving business decisions. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making? 65) How is big data being utilized by local governments? Answer: Big-data analytics are driving the movement toward smart cities, which make intensive use of digital technology and public data stores to make better decisions about running cities and serving their residents. Municipalities are adding more data captured through sensors, location data from mobile phones, and targeted smartphone apps. Predictive modeling programs now inform public policy decisions on utility management, transportation operation, health care delivery, and public safety. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making? 304

66) What is a GIS and what is it used for? Answer: GIS is a geographical information system. GIS provide tools to help decision makers visualize problems that benefit from mapping. GIS software ties location data about the distribution of people or other resources to points, lines, and areas on a map. Some GIS have modeling capabilities. GIS might be used to help state and local governments calculate response times to natural disasters and other emergencies, to help banks identify the best locations for new branches or ATM terminals, or to help police forces pinpoint locations with the highest incidence of crime. Difficulty: Easy AACSB: Application of Knowledge; Written and Oral Communication LO: 11-2: How do business intelligence and business analytics support decision making? 67) Which of the following is not a major force driving the rapid evolution of AI? A) The development of big data databases B) E-commerce C) The Internet of Things D) Social media E) The drastic increase in the cost of computer processing Answer: E Difficulty: Challenging AACSB: Information Technology LO: 11-3: What is artificial intelligence? How does it differ from human intelligence? 68) Which of the following statements about the evolution of AI is not true? A) In the last decade, significant progress has been made in the evolution of AI. B) In the last decade, there have been numerous fundamental conceptual breakthroughs in AI. C) Advances in AI have made possible personal assistants like Apple's Siri. D) The growth in the power of processors has been a secondary driver in the rapid evolution of AI. E) The growth of AI has relied on the refinement of algorithms by tens of thousands of AI software engineers and university AI research centers, along with significant investments from business and governments. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 11-3: What is artificial intelligence? How does it differ from human intelligence? 69) AI programs differ from traditional software programs in the techniques they use to input and process data. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-3: What is artificial intelligence? How does it differ from human intelligence?

305

70) AI systems today are not yet capable of performing tasks that humans cannot accomplish. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 11-3: What is artificial intelligence? How does it differ from human intelligence? 71) There are many different definitions of artificial intelligence. What is the expansive vision of AI? What progress has been made to accomplishing the goals of that vision? Answer: In the most ambitious vision, AI involves the attempt to build computer systems that think and act like humans. Humans see, hear, and communicate with natural languages, make decisions, plan for the future, achieve goals, perceive patterns in their environments, and learn, among many other capabilities. Humans also love, hate, and choose what objectives they want to pursue. These are the foundations of what is called "human intelligence" and what is called "common sense" or generalized intelligence. So far the "Grand Vision" of AI remains a distant dream: there are no computer programs that have demonstrated generalized human intelligence or common sense. Human intelligence is vastly more complex than the most sophisticated computer programs and covers a broader range of activities than is currently possible with "intelligent" computer systems and devices. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 11-3: What is artificial intelligence? How does it differ from human intelligence? 72) Which of the following statements about neural networks is not true? A) Neural network applications are used to address problems of control and optimization. B) Neural networks are being used to help detect credit card fraud. C) Neural networks are being used to screen patients for coronary artery disease. D) Neural networks only need a small amount of data to identify patterns. E) Neural networks are being used to predict corporate bankruptcies. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 73) All of the following are intelligent agents that are able to respond to human voice commands with useful information in voice or written form except: A) Apple's Siri. B) Microsoft's Cortana. C) Facebook's DeepFace. D) Amazon's Alexa. E) Google Now. Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

306

74) Expert systems: A) solve problems too difficult for human experts. B) are based on DO WHILE rules. C) use rules based on human expertise. D) share characteristics with mainframe computing. E) are a type of machine- based intelligence. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 75) Expert systems are used when: A) the knowledge of individual experts in an organization needs to be captured. B) predictions for the future are required. C) patterns of consumer behavior need to be investigated. D) big data needs to be analyzed. E) senior managers need reports on overall business performance. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 76) An inference engine is: A) a data mining strategy used by intelligent agents. B) the programming environment of an expert system. C) a method of organizing expert system knowledge into chunks. D) a set of rules used to model human knowledge in an expert system. E) a strategy used to search through the rule base in an expert system. Answer: E Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 77) Which of the following is not a limitation of expert systems? A) The knowledge base can be chaotic. B) They cannot consider multiple rules at a single time. C) They do not scale well to deal with very large data sets. D) They are expensive to build. E) Experts are often unable to explain how they make decisions, Answer: B Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

307

78) Which of the following represents knowledge as a set of rules? A) Machine learning systems B) Neural networks C) Robotics D) Expert systems E) Genetic algorithms Answer: D Difficulty: Easy AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 79) are pattern detection programs. A) Neural networks B) Genetic algorithms C) Expert systems D) Robotics E) Intelligent agents Answer: A Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 80) Genetic algorithms: A) represent knowledge as groups of characteristics. B) are software programs that work in the background to carry out specific, repetitive tasks. C) develop solutions to particular problems using techniques such as mutation, crossover, and selection. D) "learn" patterns from large quantities of data by sifting through data. E) have a large number of sensing and processing nodes that continuously interact with each other. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 81) To find the cheapest airline fare to a particular location, a firm would most likely use a(n): A) CAD system. B) genetic algorithm. C) augmented reality system. D) intelligent agent. E) neural network. Answer: D Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

308

82) Which of the following statements about machine learning is not true? A) More than 75 percent of AI development today involves some kind of machine learning. B) Expert systems are a form of machine learning. C) The main focus of machine learning is finding patterns in data and classifying date inputs in known and unknown outputs. D) Many big data analytics applications utilize machine learning. E) Nearly all machine learning today involves supervised learning. Answer: B Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 83) Google's ability to recognize the meaning and intent behind user queries rather than merely matching keywords is based on which of the following? A) Expert systems B) Machine learning C) DSS D) Neural networks E) Parameterized reports Answer: B Difficulty: Easy AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 84) As described in the chapter opening case, IBM's Watson Explorer is an example of a(n): A) decision support system. B) genetic algorithm. C) cognitive computing platform. D) augmented reality system. E) cloud computing system. Answer: C Difficulty: Easy AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

309

85) Which of the following statements about IBM's Watson Explorer, as described in the chapter opening case, is not true? A) Watson Explorer can only analyze structured data. B) Watson Explorer uses natural language processing. C) Watson Explorer is an example of machine learning software. D) Watson Explorer can make inferences and correlations about the content it ingests and rank potential responses for a user to select. E) Watson Explorer is able to identify patterns in very large databases without explicit programming, although with significant human training. Answer: A Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 86) "The Cat Paper" was a seminal research effort involving which of the following? A) Robotics B) Computer vision system C) Machine learning D) Genetic algorithm E) Expert system Answer: C Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 87) Which of the following is used almost exclusively for pattern detection on unlabeled data where the system is not told what to look for specifically but to simply discover patterns in the data? A) Genetic algorithm B) Intelligent agent C) Deep learning neural network D) Supervised learning neural network E) Computer vision system Answer: C Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 88) Expert systems capture the knowledge of skilled employees in the form of a set of rules in a software system that can be used by others in the organization. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

310

89) Deep learning uses multiple layers of neural networks. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 90) IBM Watson Explorer can be used to confirm medical diagnoses. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 91) Robotics is a type of intelligent technique. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 92) Unlike genetic algorithms, neural networks are not suited to finding patterns and relationships in very large amounts of data. Answer: FALSE Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 93) Because genetic algorithms produce generalized solutions, they are best used as aids or guides to human decision makers instead of substitutes for them. Answer: FALSE Difficulty: Challenging AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 94) Genetic algorithms are used to solve problems that are dynamic and complex, involving hundreds or thousands of variables or formulas. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 95) Shopping bots are a form of intelligent agent. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

311

96) What is a computer vision system? How are they being used in business? Answer: Computer vision systems deal with how computers can emulate the human visual system to view and extract information from real-world images. Such systems incorporate image processing, pattern recognition, and image understanding. Computer vision systems are being used in autonomous vehicles such as drones and self-driving cars, industrial machine vision systems (e.g., inspecting bottles), military applications, and robotic tools. Another example is Facebook's facial recognition tool called DeepFace, which is nearly as accurate as the human brain in recognizing a face. DeepFace will help Facebook improve the accuracy of Facebook's existing facial recognition capabilities to ensure that every photo of a Facebook user is connected to that person's Facebook account. GumGum, an AI company focusing on computer vision technology, has developed algorithms that enable computers to identify what's happening in imagery. GumGum used computer vision technology to thoroughly analyze broadcast and social media content for placement, exposure, and duration involving Goodyear images that appeared in online or in TV-generated NBA content. Instead of humans trying to monitor the number of times a logo appeared on a screen, GumGum's vision technology tracks and reports the data. Difficulty: Moderate AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? 97) What is a genetic algorithm and how do they work? What types of problems are they designed to solve? Answer: Genetic algorithms are another form of machine learning. Genetic algorithms are useful for finding the optimal solution for a specific problem by examining a very large number of alternative solutions for that problem. Their method of solving problems is based on ideas inspired by evolutionary biology such as inheritance, mutation, selection, and crossover (recombination). A genetic algorithm works by searching a population of randomly generated strings of binary digits to identify the right string representing the best possible solution for the problem. As solutions alter and combine, the worst ones are discarded and the better ones survive to go on to produce even better solutions. Genetic algorithms are used to solve problems that are dynamic and complex, involving hundreds or thousands of variables or formulas. The problem must be one whose range of possible solutions can be represented genetically and for which criteria can be established for evaluating fitness. Genetic algorithms expedite the solution because they can evaluate many solution alternatives quickly to find the best one. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

312

98) What is the difference between supervised learning and unsupervised learning? Answer: Nearly all machine learning today involves supervised learning, in which the system is "trained" by providing specific examples of desired inputs and outputs identified by humans in advance. A very large database is developed, say 10 million photos posted on the Internet, and then split into two sections, one a development database and the other a test database. Humans select a target, let's say to identify all photos that contain a car image. Humans feed a large collection of verified pictures, some of which contain a car image, into a neural network (described below) that proceeds iteratively through the development database in millions of cycles, until eventually the system can identify photos with a car at an acceptable rate. The machine learning system is then tested using the test database to ensure the algorithms can achieve the same results with a different set of photos. In many cases, but not all, machine learning can come close to or equal human efforts, but on a very much larger scale and much faster. Over time, with tweaking by programmers, and by making the database even bigger, using ever larger computing systems, the system will improve its performance, and in that sense, can learn. Supervised learning is one technique used to develop autonomous vehicles that need to be able to recognize objects around them, such as people, other cars, buildings, and lines on the pavement to guide them. In unsupervised learning, the same procedures are followed, but humans do not feed the system examples. Instead, the system is asked to process the development database and report whatever patterns it finds. For instance, in a seminal research effort often referred to "The Cat Paper," researchers collected 10 million YouTube photos from videos and built a machine learning system that could detect human faces without labeling or "teaching" the machine with verified human face photos Researchers developed a brute force neural network computer system composed of 1,000 machines with 16,000 core processors loaned by Google. The systems processors had a total of 1 billion connections to one another, creating a very large network that imitated on a small scale the neurons and synapses (connections) of a human brain. The result was a system that could detect human faces in photos, as well as cat faces and human bodies. The system was then tested on 22,000 object images on ImageNet (a large online visual database) and achieved a 16 percent accuracy rate. In principle then, it is possible to create machine learning systems that can "teach themselves" about the world without human intervention. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 11-4: What are the major types of AI techniques and how do they benefit organizations?

313

99) What are neural networks and how do they work? Answer: Neural networks find patterns and relationships in very large amounts of data that would be too complicated and difficult for a human being to analyze by using machine learning algorithms and computational models that emulate the processing patterns that are loosely based on how the biological human brain is thought to operate. Neural networks are pattern detection programs. Neural networks learn patterns from large quantities of data by sifting through the data, and ultimately finding pathways through the network of thousands of neurons. Some pathways are more successful than others in their ability to identify objects like cars, animals, faces, and voices. There may be millions of pathways through the data. An algorithm known as the Learning Rule identifies these successful paths and strengthens the connection among neurons in these pathways. This process is repeated thousands or millions of times until only the most successful pathways are identified. The Learning Rule identifies the best or optimal pathways through the data. At some point, after millions of pathways are analyzed, the process stops when an acceptable level of pattern recognition is reached, for instance, successfully identifying cancerous tumors about as well as humans, or even better than humans. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 11-4: What are the major types of AI techniques and how do they benefit organizations? Essentials of MIS, 14e (Laudon/Laudon) Chapter 12 Building Information Systems and Managing Projects 1) is a tangible benefit of information systems. A) Improved asset usage B) Reduced workforce C) Better corporate image D) More information E) Improved resource control Answer: B Difficulty: Easy AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 2) is an intangible benefit of information systems. A) Improved decision making B) Lower hardware cost C) Reduced software cost D) Lower maintenance cost E) Increased sales Answer: A Difficulty: Easy AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 314

3) Which process is used to develop risk profiles for a firm's information system projects and assets? A) Information systems plan B) Scoring model C) Feasibility study D) Systems analysis E) Portfolio analysis Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

315

4) You have been hired by a pharmaceutical company to evaluate its portfolio of systems and IT projects. Which types of projects would be best avoided? A) Any high-risk projects B) Any low-benefit projects C) High risk, high benefit projects D) Any low-risk projects E) High-risk, low-benefit projects Answer: E Difficulty: Moderate AACSB: Analytical Thinking LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 5) An information systems plan includes all the following except: A) key business processes. B) current situation. C) selection of programming languages. D) financing. E) management strategy. Answer: C Difficulty: Challenging AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 6) All of the following are management strategy considerations in the development of an information systems plan except: A) acquisition plans. B) organizational realignment. C) anticipated difficulties in implementation. D) major training initiatives. E) management controls. Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

316

7) A model is a method for deciding among alternative systems based on a system of ratings for selected objectives. A) scoring B) scorecard C) portfolio D) TCO E) capital budgeting Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 8) According to the opening case, all of the following were benefits of the new app developed for Angostura except: A) reduction in percentage of returned orders. B) reduction in the amount of time customer service representatives spent on data entry ex. C) reduction in time to create an order. D) integration with suppliers. E) integration with Bluetooth wireless printers. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 9) Which of the following is not a factor used in making the business case for a specific new system? A) Customer and supplier relationships B) Financial rationale C) Survival D) Improved decision making E) Employee morale Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

317

10) All of the following are capital budgeting models for evaluating IT projects except: A) payback method. B) net present value. C) TCO. D) IRR. E) ROI. Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 11) Routine projects typically have which of the following profiles in terms of potential risks and benefits? A) Low project risk; low potential benefits B) High project risk; high potential benefits C) Low project risk, high potential benefits D) High project risk; low potential benefits E) Routine projects are impossible to classify in terms of potential risks and benefits. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 12) Which of the following develops the firm-wide IS plan? A) Board of Directors B) Chief Executive Office C) Chief Information Officer D) End users E) Project managers Answer: C Difficulty: Easy AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

318

13) Which of the following did Angostura attach the least importance to, according to the sample scoring model discussed in the chapter? A) Capabilities for sales order processing B) Ease of use C) Ability to support individual sales reps taking orders D) System access from mobile platforms E) Software costs Answer: E Difficulty: Challenging AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 14) Each information system project carries its own set of risks and benefits. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 15) TCO analysis provides all of the information needed to evaluate an information technology investment. Answer: FALSE Difficulty: Easy AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 16) Intangible benefits of an information system are those that cannot be easily quantified. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 17) An information systems plan shows how specific information systems fit into a company's overall business plan and business strategy. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

319

18) A reduced workforce is an example of an intangible benefit of an information system. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 19) Capital budgeting methods rely on measures of cash flows into and out of the firm. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 20) Describe the function of a business case in the acquisition and development of a new information system. Answer: A business case is a proposal to management seeking approval for an investment. The business case for an IT investment describes the problem facing the organization that can be solved by investing in a proposed system solution. It provides an analysis of all the costs, benefits, and risks associated with that investment and the justification for that proposed course of action. The business case describes the rationale for proceeding with an investment and shows how the investment supports the firm's strategic goals and business objectives and how it fits in with the overall Information Systems Plan of the firm. It also provides the information necessary to make an informed decision about whether to proceed with the investment and in what form. The business case explains how this investment will provide value for the business and identifies any risks that could negatively affect outcomes. The business case identifies alternative solutions, along with the deciding factors for selecting the preferred option. A good business case will also describe how the proposed solution may require changes in organizational culture, systems, processes, and jobs. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-1: How should managers build a business case for the acquisition and development of a new information system?

320

21) Why are corporate-wide information systems plans necessary? What does such a plan typically contain? Answer: In order to identify the information systems projects that will deliver the most business value, organizations need a corporate-wide information systems plan that supports their overall business plan, with strategic systems incorporated into top-level planning. The IS firm plan is developed by the Chief Information Officer and is approved annually by the CEO and often the Board of Directors. The plan serves as a road map indicating the direction of systems development (the purpose of the plan), the rationale, the state of current systems, new developments to consider, the management strategy, the implementation plan, and the budget. Without a comprehensive firm-wide IS plan, it is difficult, if not impossible to evaluate the worth of proposals for developing specific individual systems. You cannot make the case for a specific new system without understanding the larger context of all the many systems in the firm. The plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals. It explains how general goals will be achieved by specific systems projects. It identifies specific target dates and milestones that can be used later to evaluate the plan's progress in terms of how many objectives were actually attained in the time frame specified in the plan. The plan indicates the key management decisions, technology, and required organizational change. In order to plan effectively, firms will need to inventory and document all of their information system applications, IT infrastructure components, and longand short-term information requirements. For projects in which benefits involve improved decision making, managers should try to identify the decision improvements that would provide the greatest additional value to the firm. They should then develop a set of metrics to quantify the value of more timely and precise information on the outcome of the decision. The plan also should describe organizational changes, including management and employee training requirements; changes in business processes; and changes in authority, structure, or management practice. When you are making the business case for a new information system project, you show how the proposed system fits into that plan. Difficulty: Challenging AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 22) What are the limitations of analyzing the acquisition and development of a new information system from a financial perspective? Answer: Focusing on the financial aspects of an information system project tends to overlook the social and organizational dimensions of information systems that may affect the true costs and benefits of the investment. Many companies' information systems investment decisions do not adequately consider costs from organizational disruptions created by a new system, such as the cost to train end users, the impact that users' learning curves for a new system have on productivity, or the time managers need to spend overseeing new system-related changes. Intangible benefits such as more timely decisions from a new system or enhanced employee learning and expertise may also be overlooked in a traditional financial analysis. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-1: How should managers build a business case for the acquisition and development of a new information system? 321

23) Which is the first step in developing a new information system? A) Defining the problem B) Gathering information requirements C) Programming D) Developing alternative solutions E) Feasibility study Answer: A Difficulty: Easy AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 24) Which is the last step in developing a new information system? A) Training and documentation B) Conversion C) Maintenance D) Change management E) Implementing the solution Answer: E Difficulty: Easy AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 25) Which process develops a detailed description of the functions that a new information system must perform? A) Feasibility study B) Systems design C) Test plan development D) PERT chart E) Requirements analysis Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 26) A(n) details the costs and benefits of each alternative and the changes that the organization will have to make to use the solution effectively. A) feasibility study B) requirements analysis C) implementation plan D) alternative selection process E) testing plan Answer: A Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 322

27) The first step in implementing a systems solution is to: A) perform a feasibility study. B) evaluate alternative solutions. C) identify information requirements. D) create detailed design specifications. E) prepare training and documentation. Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 28) In the opening case, what was the problem that led Angostura to the decision to develop a new system? A) Angostura's customer service representatives had no way to respond to customer complaints. B) Angostura's human resources system was overloaded. C) Angostura's management lacked an effective ESS. D) Angostura's traditional ordering process was excessively manual and time-consuming, with high error rates. E) Angostura's inventory was not well-integrated with its supply chain. Answer: D Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 29) A(n) provides a model for an information system solution and consists of all the specifications that will deliver the functions identified during systems analysis. A) feasibility study B) requirements analysis C) systems design D) alternative selection process E) testing plan Answer: C Difficulty: Challenging AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 30) Each program in a new information system is tested separately in: A) application testing. B) acceptance testing. C) unit testing. D) user testing. E) system testing. Answer: C Difficulty: Easy AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 323

31) System testing: A) includes all the preparations for the series of tests to be performed on the system. B) tests the functioning of the system as a whole. C) tests each program separately. D) provides the final certification that the system is ready to be used in a production setting. E) rolls system tests out to separate business divisions for independent results. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 32) Acceptance testing: A) includes all the preparations for the trials. B) tests the functioning of the system as a whole. C) tests each program separately. D) provides the final certification that the system is ready to be used in a production setting. E) rolls system tests out to separate business divisions for independent results. Answer: D Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 33) In a parallel conversion strategy, the new system: A) is tested by an outsourced company. B) replaces the old one at an appointed time. C) and the old are run together. D) is introduced in stages. E) is run in at least two separate divisions in order to compare results. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 34) In a direct cutover conversion strategy, the new system: A) is tested by an outsourced company. B) replaces the old one at an appointed time. C) and the old are run together. D) is introduced in stages. E) is run in at least two separate divisions in order to compare results. Answer: B Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system?

324

35) Implementing a system in stages, for instance, at a specific regional location and then at other locations, is an example of a(n): A) direct cutover. B) indirect cutover. C) incremental conversion. D) parallel. E) phased approach. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 36) Changes in hardware, software, documentation, or production to a production system to correct errors, meet new requirements, or improve processing efficiencies are termed: A) compliance. B) production. C) maintenance. D) acceptance. E) conversion. Answer: C Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 37) A systems analysis includes a that is used to determine whether the solution is achievable from a financial, technical, and organizational standpoint. A) test plan B) conversion plan C) feasibility study D) risk analysis E) GANTT chart Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 38) Which of the following is not a part of systems analysis? A) Identifying information requirements B) Identifying causes C) Evaluating the alternatives D) Creating detailed design specifications E) Defining the problem Answer: D Difficulty: Easy AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 325

39) Implementation refers to the steps taken to bring a new information system into production. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 40) Documentation reveals how the system works from both a technical and end-user standpoint. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 41) A new information system is not considered in production until implementation is complete. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system? 42) According to the opening chapter case, Angostura's problem was solely a technology problem that only required the application of new technology to solve. Answer: FALSE Difficulty: Challenging AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 43) The first step in the problem-solving process is to define the problem that needs to be solved. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-2: What are the core problem-solving steps for developing a new information system? 44) A test plan begins by testing how well the entire system works and identifying where it fails. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 12-2: What are the core problem-solving steps for developing a new information system?

326

45) What is the purpose of systems analysis? Explain in detail what is involved in the process of systems analysis. Answer: The purpose of systems analysis is to ensure that the information systems being built have the right goals and requirements, are appropriate to the business in terms of the business goals, capabilities and needs, and to make sure that the implementation process will be successful. Systems analysis consists of three general steps: (1) define and understand the problem, (2) identify alternate solutions, and (3) choose the best solution. In defining the problem, systems analysts typically gather facts about existing systems and problems by examining documents, work papers, procedures, and system operations and by interviewing key users of the system and identifying system requirements. In developing alternate solutions, systems analysis lays out the most likely paths to follow, given the nature of the problem. Some possible solutions do not require an information system solution, but instead call for an adjustment in management, additional training, or refinement of existing organizational procedures. Some, however, do require modifications to the firm's existing information systems or an entirely new information system. In choosing a solution, systems analysis includes a feasibility study to determine whether each proposed solution is feasible, or achievable, from a financial, technical, and organizational standpoint. The feasibility study establishes whether each alternative solution is a good investment, whether the technology needed for the system is available and can be handled by the firm's information systems staff, and whether the organization is capable of accommodating the changes introduced by the system. A written systems proposal report describes the costs and benefits, and advantages and disadvantages of each alternative solution. The systems analysis will detail the costs and benefits of each alternative and the changes that the organization will have to make to use the solution effectively. Difficulty: Challenging AACSB: Application of Knowledge; Written and Oral Communication LO: 12-2: What are the core problem-solving steps for developing a new information system? 46) You work for the IT department of a startup and it is your job to set up the testing processes for a new enterprise system the company will be hosting. Describe the processes you will recommend. What unique considerations will you have? Answer: The first step is to prepare the test plan. Any individual components will need to be tested separately first and then the system as a whole will need to be tested. Because this is a hosted application, the system will need to be tested as accessed from the variety of platforms that are supported by the application. If the hosted application supports both Mac and Windows users, the system and its parts will need to be tested using client computers running these systems. Difficulty: Moderate AACSB: Analytical Thinking; Written and Oral Communication LO: 12-2: What are the core problem-solving steps for developing a new information system?

327

47) You have been hired as a consultant to make recommendations for Smarty's, a healthy fastfood chain that is undergoing major expansion. Smarty's needs to create an enterprise resource planning system. However, Smarty's needs to have this system up and running as quickly as possible or it is likely they will begin losing business. What do you recommend? Answer: Creating new, original enterprise software is extremely complex, and has a 50 to 75 percent failure rating. Because any enterprise software is extremely complex, it is likely that they will run into problems if they implement a system too quickly. I would caution them that an entirely new enterprise system is most likely to fail, and their best options may be to examine their existing portfolio to identify which systems can remain without doing too much damage and which must be revamped in order for them to maintain their growth. Regardless, they will still need to go through a rigorous evaluation and planning process in order to determine the most appropriate software. They may be able to implement web services for rapid, component-based development for the portions of the system that need to be overhauled or augmented. Another option is to use hosted applications for some of their systems. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 12-2: What are the core problem-solving steps for developing a new information system? 48) Which of the following is not one of the unique considerations in developing applications for a mobile platform? A) Reduced screen space B) The telephone service provider C) User gestures D) Bandwidth constraints E) Multiple mobile platforms Answer: B Difficulty: Easy AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 49) The oldest method for building information systems is: A) JAD. B) prototyping. C) object-oriented development. D) the systems development life cycle. E) RAD. Answer: D Difficulty: Easy AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems?

328

50) In the traditional systems development life cycle, end users: A) contribute heavily throughout development. B) have no input. C) contribute only during testing. D) are important only during the conversion phase. E) are limited to providing information requirements and reviewing the technical staff's work. Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 51) As a technical project manager, you have decided to propose implementing a prototyping methodology for a small web-based design project. What is the first step you will follow in this project? A) Use the existing prototype. B) Identify user requirements. C) Conduct a feasibility study. D) Identify different solutions. E) Develop an initial prototype. Answer: B Difficulty: Easy AACSB: Analytical Thinking LO: 12-3: What are the alternative methods for building information systems? 52) Which of the following is the biggest risk in using end-user development to create a new information system? A) The software used may create inaccurate information. B) The system doesn't adequately reflect user needs. C) Hardware is unable to support the new system. D) The system may not be able to scale up to handle larger amounts of data. E) End users are overly taxed and become reluctant to use the system. Answer: D Difficulty: Challenging AACSB: Analytical Thinking LO: 12-3: What are the alternative methods for building information systems? 53) Of the following, which is the most important reason for creating a mobile version of a business's website? A) Mobile devices provide access from anywhere. B) Mobile devices use touch interfaces. C) Mobile devices use lower bandwidth. D) Mobile devices use different platforms. E) Mobile websites use different programming than traditional websites. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 329

54) is a stand-alone application designed to run on a specific mobile platform and device. A) A mobile browser B) A mobile website C) A responsive mobile web app D) A native app E) HTML5 Answer: D Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 55) If an organization's requirements conflict with the software package chosen, and the package cannot be customized, the organization should: A) select a different package. B) outsource the development of the system. C) redesign the RFP. D) change the evaluation process. E) change its procedures. Answer: E Difficulty: Moderate AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 56) "Hidden costs," such as costs, can easily undercut anticipated benefits from outsourcing. A) hardware B) software C) employee salary D) communications E) vendor selection Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems?

330

57) The process of creating workable information systems in a very short period of time is called: A) RAD. B) Systems life cycle. C) prototyping. D) end-user development. E) SDLC. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 58) Which of the following types of systems development is not characterized by short development times? A) RAD B) JAD C) Prototyping D) End-user development E) SDLC Answer: E Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 59) You are an IT project manager for an advertising firm. The firm wishes to create an online survey tool that will be used to survey focus group reactions to products in development. The most important consideration for the firm is being able to offer the tool as soon as possible as a new corporate service. However, you know that many of the senior managers that are business owners of this project have difficulty in understanding technical or software development issues and are likely to change their requirements during the course of development. What development method would be most successful for this project? A) RAD B) JAD C) End-user development D) Prototyping E) SDLC Answer: D Difficulty: Moderate AACSB: Analytical Thinking LO: 12-3: What are the alternative methods for building information systems?

331

60) Which of the following is a technique used to create websites that will conform to the screen resolution of the user? A) Native design B) Responsive web design C) End-user design D) Multiplatform design E) Mobile development Answer: B Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 61) enable(s) websites to change layouts automatically according to the visitor's screen resolution, whether on a desktop, laptop, tablet, or smartphone. A) Flexible layouts B) Flexible images C) Detecting user screen resolution D) Responsive web design E) Media queries to optimize design Answer: D Difficulty: Challenging AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 62) A detailed list of questions submitted to external vendors to determine how well they meet the organization's specific requirements is called: A) a feasibility study. B) process specifications. C) a systems analysis. D) a case study. E) a request for proposal. Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 63) End-user development is useful primarily for creating: A) enterprise systems. B) user interfaces. C) conventional programs. D) mobile apps. E) simple information systems. Answer: E Difficulty: Easy AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 332

64) Native apps can function even if the device is not connected to the Internet. Answer: TRUE Difficulty: Challenging AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 65) Systems analysts typically gather facts about existing systems by interacting with end users. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 66) One problem with prototyping is that the systems constructed may not be able to handle large quantities of data in a production environment. Answer: TRUE Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 67) End-user developed solutions can be developed much faster than other approaches. Answer: TRUE Difficulty: Easy AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems? 68) Domestic outsourcing is driven primarily by the fact that outsourcing firms possess skills, resources, and assets that their clients do not have. Answer: TRUE Difficulty: Challenging AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 69) In the traditional systems development life cycle, each stage must be completed before the next stage begins. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-3: What are the alternative methods for building information systems? 70) A prototype is the final working version of an information system. Answer: FALSE Difficulty: Moderate AACSB: Information Technology LO: 12-3: What are the alternative methods for building information systems?

333

71) Identify and describe the main five systems development approaches. Answer: Features of the systems development life cycle include: sequential step-by-step formal process, written specification and approvals, and limited role of users. Features of prototyping include: requirements specified dynamically with experimental system; rapid, informal, and iterative process; users continually interact with the prototype. Features of end-user development include: systems created by end users using fourth-generation software tools, rapid and informal, minimal role of information systems specialists. Applications software packages are appropriate for universal functions with standard processes that do not change a great deal over time. However, customization may be needed if the software doesn't match the business processes. If a firm does not want to use its internal resources to build or operate information systems, it can outsource the work to an external organization that specializes in providing these services. The vendor may or may not be responsible for operating the system on its own computers. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-3: What are the alternative methods for building information systems? 72) What are the advantages and disadvantages of prototyping? Describe the steps in prototyping. Give at least two circumstances under which prototyping might be useful. Answer: Because prototyping encourages intense end-user involvement throughout the process, it is more likely to produce systems that fulfill user requirements. Working prototype systems can be developed very rapidly and inexpensively. Rapid prototyping can gloss over essential steps in systems development. If the completed prototype works reasonably well, management may not see the need for reprogramming, redesigned, full documentation in testing to build a polished production system. This can backfire later with large quantities of data or large numbers of users in a production environment. The steps in prototyping are: (1) identifying the user's basic requirements, (2) developing an initial prototype, (3) using the prototype, and (4) revising and enhancing the prototype. Prototyping is most useful when there is some uncertainty about requirements or design solutions. It is especially useful in designing the end-user interface. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-3: What are the alternative methods for building information systems? 73) Identify four types of rapid-cycle systems development. Why is rapid-cycle development a trend in current software development? Answer: Rapid-cycle development methods include rapid application development (RAD), joint application design (JAD), prototyping, and component-based development. Organizations are interested in rapid-cycle development because it has become important to be flexible and able to react quickly to changes in scale and user needs. It may also reduce time and costs of development. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-3: What are the alternative methods for building information systems?

334

74) What is the difference between a mobile website and a mobile web app? Answer: A mobile website is a version of a regular website that is scaled down in content and navigation for easy access and search on a small mobile screen. A mobile web app is an Internetenabled application with specific functionality for mobile devices. Difficulty: Easy AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 12-3: What are the alternative methods for building information systems? 75) Why is developing applications for mobile platforms so different from development for PC applications? Answer: The reduced size of mobile devices makes using fingers and multitouch gestures much easier than typing and using keyboards. Mobile apps need to be optimized for the specific tasks they are to perform. They should not try to carry out too many tasks, and they should be designed for usability. The user experience for mobile interaction is fundamentally different from using a desktop or laptop PC. Saving resources—bandwidth, screen space, memory, processing, data entry, and user gestures—is a top priority. Difficulty: Easy AACSB: Application of Knowledge; Information Technology; Written and Oral Communication LO: 12-3: What are the alternative methods for building information systems? 76) According to a joint study by McKinsey and Oxford University, large software projects on average run percent over budget. A) 25 B) 33 C) 50 D) 66 E) 75 Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 77) Which of the following would not be considered a project management activity? A) Assessing risk B) Organizing the work C) Assigning tasks D) Reporting progress E) Writing the code for a new system Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed?

335

78) All of the following are likely to increase the level of project risk except: A) a small number of project team members. B) a project in which project members must master new technology. C) an information systems staff that does not possess much technical expertise. D) a project that impacts many parts of the organization. E) information requirements that are not clear and straightforward. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 79) Very large-scale systems projects have a failure rate that is that for other projects. A) 5 to 10 B) 10 to 25 C) 25 to 33 D) 33 to 50 E) 50 to 75 Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed?

percent higher than

80) Which of the following is not typically an end-user concern? A) Can the data be accessed on mobile phones, tablets, and PCs? B) How will the operation of the system change employees' daily routines? C) Will the system deliver the information I need for my work? D) What technologies should be used to secure the data? E) What new procedures do we need to enter data into the system? Answer: D Difficulty: Challenging AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 81) According to the Project Management Institute, which of the following is the leading factor in project success? A) Having executive sponsors who are actively engaged B) The amount of money spent on the project C) The amount of time spent on the project D) The scope of the project E) The number of employees devoted to the project Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed?

336

82) Which of the following shows each project task as a horizontal bar whose length is proportional to the time required to complete it? A) PERT chart B) Systems chart C) Gantt chart D) Structure chart E) Requirements chart Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 83) Which of the following is the most widely used project management tool? A) Microsoft Word B) Microsoft Project C) Microsoft Excel D) Microsoft Access E) Google Project Answer: B Difficulty: Easy AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 84) refers to the application of knowledge, skills, tools, and techniques to achieve specific targets within specified budget and time constraints. A) Systems analysis B) Systems design C) Project management D) Project implementation E) Project scope Answer: C Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 85) A PERT chart: A) portrays a project as a network diagram consisting of numbered nodes that represent tasks. B) is used to evaluate project risk and time. C) displays a horizontal bar for each project task. D) tracks progress of, and modifications to, project tasks. E) is used to evaluate project costs and benefits. Answer: A Difficulty: Moderate AACSB: Information Technology LO: 12-4: How should information systems projects be managed?

337

86) Users prefer systems that: A) are oriented to facilitating organizational tasks and solving business problems. B) work with existing DBMS. C) are able to provide optimum hardware and software efficiency. D) are capable of storing much more data than they need. E) are cloud-based. Answer: A Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 87) A(n) shows the ordering of project tasks and the relationship of a task with preceding and succeeding tasks. A) PERT chart B) DFD C) feasibility study D) Gantt chart E) ergonomic chart Answer: A Difficulty: Moderate AACSB: Information Technology LO: 12-4: How should information systems projects be managed? 88) Which of the following tools would you use to identify how well employees will accept a new information system? A) System prototype B) Feasibility study C) User testing D) RFP E) Organizational impact analysis Answer: E Difficulty: Challenging AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 89) Which of the following is not one of the main variables that project management seeks to control? A) End-users B) Cost C) Time D) Quality E) Scope Answer: A Difficulty: Easy AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 338

90) The quality of information systems projects usually boils down to improved organizational performance and decision making. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 91) Gantt and PERT charts are two common formal planning tools for project management. Answer: TRUE Difficulty: Easy AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 92) According to the chapter case, a key problem with Arup Group Limited's approach to project management was that it had had no central visibility into what was happening with each project Answer: TRUE Difficulty: Challenging AACSB: Information Technology LO: 12-4: How should information systems projects be managed? 93) A typical end user concern about a new system is where the data will be stored. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 94) Scope describes the full length of time required to complete a project. Answer: FALSE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed? 95) Ergonomics refers to the interaction of people and machines in the work environment. Answer: TRUE Difficulty: Moderate AACSB: Application of Knowledge LO: 12-4: How should information systems projects be managed?

339

96) Why is management backing so important to the success of information systems projects? Answer: If an information systems project has the backing and commitment of management at various levels, it is more likely to receive higher priority from both users and the technical information systems staff. Management backing also ensures that a systems project receives sufficient funding and resources to be successful. Furthermore, to be enforced effectively, all the changes in work habits and procedures and any organizational realignments associated with a new system depend on management backing. According to the Project Management Institute, having executive sponsors who are actively engaged is the leading factor in project success. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-4: How should information systems projects be managed? 97) Discuss the importance of the end-user in software development. Answer: The end-user is the primary focus of software development. Whether a new information system succeeds or fails largely depends on the roles of users. Building successful information systems requires close cooperation among end users and information systems specialists throughout the systems development process. If users are heavily involved in the development of a system, they have more opportunities to mold the system according to their priorities and business requirements, and more opportunities to control the outcome. They also are more likely to react positively to the completed system because they have been active participants in the change process. Incorporating user knowledge and expertise leads to better solutions. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-4: How should information systems projects be managed?

340

98) Describe the major factors that project management for information systems must deal with. Answer: Project management for information systems must deal with five major variables: scope, time, cost, quality, and risk. Scope defines what work is, or is not, included in a project. For example, the scope of a project for a new order processing system might include new modules for inputting orders and transmitting them to production and accounting, but not any changes to related accounts receivable, manufacturing, distribution, or inventory control systems. Project management defines all the work required to complete a project successfully and should ensure that the scope of a project not expand beyond what was originally intended. Time is the amount of time required to complete the project. Project management typically establishes the amount of time required to complete major components of a project. Each of these components is further broken down into activities and tasks. Project management tries to determine the time required to complete each task and establish a schedule for completing the work. Cost is based on the time to complete a project multiplied by the daily cost of human resources required to complete the project. Information systems project costs also include the cost of hardware, software, and workspace. Project management develops a budget for the project and monitors ongoing project expenses. Quality is an indicator of how well the end result of a project satisfies the objectives specified by management. The quality of information systems projects usually boils down to improved organizational performance and decision making. Quality also considers the accuracy and timeliness of information produced by the new system and ease of use. Difficulty: Moderate AACSB: Application of Knowledge; Written and Oral Communication LO: 12-4: How should information systems projects be managed? 99) Americlinic, a national chain of budget health-care clinics, is creating an information system that will allow patients and doctors at participating franchises to communicate online. The goal of the system is to allow doctors to respond to minor health questions quickly and more efficiently, saving patients unnecessary visits to the clinic. This will be a major procedural change. What steps would you recommend to this company to ensure the user acceptance of the system? Answer: The first step should be to conduct an organizational impact analysis to determine the changes in procedures, job function, organizational structure, power relationships, and behavior that this system requires or will engender. Any organizational changes should occur prior to implementing the system. In order to gain compliance and support of the doctors, I would establish a review committee of influential participating doctors and change agents to discuss the system prior to development and during development in order to meet physician needs and requirements. I would also involve focus groups of intended users to review prototypes of the system to make sure it is easy to use and, hopefully, easier to use in the relevant health situations than going to the doctor. The company will need to make sure that there is also an option for users that do not have Internet access. User training for doctors and nurses will be essential. The company should also consider incentives for doctors and patients that use the system. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 12-4: How should information systems projects be managed?

341

100) What unique issues and solutions might be involved in managing global systems projects? Answer: The project management challenges for global systems would be similar to those for domestic systems, but they are complicated by the international environment. User information requirements, business processes, and work cultures differ from country to country. It is more likely that systems in different countries will have difficulty communicating with each other, and the expense of implementing a system globally is multiplied when you have to take differing language, cultural, legal, and management requirements into consideration. Difficulty: Challenging AACSB: Analytical Thinking; Written and Oral Communication LO: 12-4: How should information systems projects be managed?

342