This Document Contains Chapters 9 to 12 Chapter 09 Enabling the Organization – Decision Making Multiple Choice Questions 1. Which of the following is not a reason for the growth of decision-making information systems? A. People need to analyze large amounts of information. B. People must make decisions quickly. C. People must apply sophisticated analysis techniques to make good decisions. D. People no longer have to worry about protecting the corporate asset of organizational information. Answer: D. People no longer have to worry about protecting the corporate asset of organizational information. Rationale: People must protect the corporate asset of organizational information; it is one of their competitive advantages. 2. What can a model accomplish? A. Calculate risks B. Understand uncertainty C. Manipulate time D. All of these Answer: D. All of these Rationale: A model can do All of these. 3. Which of the following is a quantitative model typically used by a DSS? A. Sensitivity analysis B. What-if analysis C. Goal-seeking analysis D. All of these Answer: D. All of these Rationale: A DSS can perform all of these. 4. What is the study of the effect that changes in one (or more) part of the model has on other parts of the model? A. Drill-down B. Sensitivity analysis C. Statistical analysis D. Goal-seeking analysis Answer: B. Sensitivity analysis Rationale: This is the definition of sensitivity analysis. 5. What finds the inputs necessary to achieve a goal, such as a desired level of output? A. Drill-down B. Sensitivity analysis C. What-if analysis D. Goal-seeking analysis Answer: D. Goal-seeking analysis Rationale: This is the definition of goal-seeking analysis. 6. What is consolidation? A. Involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information. B. The ability to look at information from different perspectives. C. Enables users to get details, and details of details, of information. D. Finds the inputs necessary to achieve a goal, such as a desired level of output. Answer: A. Involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information. Rationale: This is the definition of consolidation. 7. What is drill-down capability? A. Involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information. B. The ability to look at information from different perspectives. C. Enables users to get details, and details of details, of information. D. Finds the inputs necessary to achieve a goal, such as a desired level of output. Answer: C. Enables users to get details, and details of details, of information. Rationale: This is the definition of drill-down. 8. What is slice-and-dice capability? A. Involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information. B. The ability to look at information from different perspectives. C. Enables users to get details, and details of details, of information. D. Finds the inputs necessary to achieve a goal, such as a desired level of output. Answer: B. The ability to look at information from different perspectives. Rationale: This is the definition of slice-and-dice. 9. What integrates information from multiple components and tailors the information to individual preferences? A. Drill-down B. Sensitivity analysis C. What-if analysis D. Digital dashboard Answer: D. Digital dashboard Rationale: This is the definition of digital dashboards. 10. What are various commercial applications of artificial intelligence? A. Drill-down B. Sensitivity analysis C. Digital dashboard D. Intelligent systems Answer: D. Intelligent systems Rationale: This is the definition of intelligent systems. 11. What is a category of AI that attempts to emulate the way the human brain works? A. Intelligent system B. Artificial intelligence C. Expert systems D. Neural network Answer: D. Neural network Rationale: This is the definition of neural network. 12. Which of the following is the most commonly used form of AI in the business arena? A. Intelligent system B. Artificial intelligence C. Expert system D. Neural network Answer: C. Expert system Rationale: Expert systems are the most common. 13. What is a special-purpose, knowledge-based information system that accomplishes specific tasks on behalf of its users? A. Intelligent system B. Artificial intelligence C. Neural network D. Intelligent agent Answer: D. Intelligent agent Rationale: This is the definition of intelligent agent. 14. What is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem? A. Intelligent system B. Artificial intelligence C. Neural network D. Genetic algorithm Answer: D. Genetic algorithm Rationale: This is the definition of genetic algorithm. 15. Which of the following represents the top-down (executives to analysts) organizational levels of information technology systems? A. TPS, DSS, EIS. B. DSS, TPS, EIS. C. EIS, DSS, TPS. D. None of these. It varies from organization to organization. Answer: C. EIS, DSS, TPS. Rationale: Executive-information systems, decision-support systems, and transaction-processing systems are the top-down organizational levels of information technology systems. 16. Which of the following is an incorrect enterprise view of information technology? A. Processes are analytical for executives and transactional for analysts. B. Granularity is coarse for executives and fine for analysts. C. Processing is OLTP for executives and OLAP for analysts. D. None of these. Answer: C. Processing is OLTP for executives and OLAP for analysts. Rationale: Processing is OLAP for executives and OLTP for analysts. 17. Which of the following is a type of transaction-processing system? A. Order processing B. Sales C. Manufacturing D. Transportation Answer: A. Order processing Rationale: Order processing is a transaction-processing system. 18. Which of the following is a type of decision-support system? A. Order processing B. Inventory tracking C. Manufacturing D. All of these Answer: C. Manufacturing Rationale: Manufacturing is a type of decision-support system. 19. Which system differentiates an executive-information system from a decision-support system and a transaction-processing system? A. Order processing system B. Manufacturing system C. Stock market information system D. Transportation system Answer: C. Stock market information system Rationale: A stock market information system is found only in an executive-information system, since it is an external source of information. The rest are internal sources of information. True/False Questions 20. A genetic algorithm is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. Answer: True Rationale: This is the definition of genetic algorithm. 21. The ultimate goal of AI is to build a system that can mimic human intelligence. Answer: True Rationale: This is the ultimate goal of AI. 22. Sensitivity analysis, what-if analysis, and market-basket analysis are the three quantitative models typically used by a DSS. Answer: False Rationale: Sensitivity analysis, what-if analysis, and goal-seeking analysis are the three quantitative models typically used by a DSS. 23. Consolidation, drill-down, and slice-and-dice are the three most common capabilities offered in an EIS. Answer: True Rationale: These are the three most common capabilities offered in an EIS. 24. A shopping bot is one of the simplest examples of an intelligent agent. Answer: True Rationale: A shopping bot is a simple example of an intelligent agent. Fill in the Blank Questions 25. A(n) ___________ is a simplified representation or abstraction of reality. Answer: Model 26. A decision-support system models __________ to support managers and business professionals during the decision-making process. Answer: Information 27. ___________ analysis occurs when users change the value of one variable repeatedly and observe the resulting changes in other variables. Answer: Sensitivity 28. What-if analysis checks the impact of a __________ in an assumption on the proposed solution. Answer: Change 29. _________ seeking analysis could answer the question "How many customers are required to purchase our new product line to increase gross profits to $5 million?" Answer: Goal 30. __________ logic is a mathematical method of handling imprecise or subjective information. Answer: Fuzzy 31. _____________ systems are various commercial applications of artificial intelligence. Answer: Intelligent 32. Artificial intelligence simulates ______________ intelligence, such as the ability to reason and learn. Answer: Human 33. ______________ systems are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. Answer: Expert 34. A(n) _________ agent is a special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users. Answer: Intelligent 35. A(n) _____________ bot is software that will search several retailer websites and provide a comparison of each retailer's offerings, including price and availability. Answer: Shopping Essay Questions 36. List and define the four primary reasons for the growth of decision-making information systems. Answer: (1) People need to analyze large amounts of information. (2) People must make decisions quickly. (3) People must apply sophisticated analysis techniques, such as modeling and forecasting, to make good decisions. (4) People must protect the corporate asset of organizational information. 37. Describe the three capabilities commonly offered by an EIS. Answer: (1) Consolidation involves the aggregation of information and features simple roll-ups to complex groupings. (2) Drill-down enables users to get details, and details of details. (3) Slice-and-dice looks at information from different perspectives. 38. Define the ultimate goal of AI and describe a few current examples of how AI is being used throughout industries. Answer: At Manchester Airport in England, the Hefner ASI Robot Cleaner alerts passengers to security and nonsmoking rules while it scrubs up to 65,600 square feet of floor per day. A SmartPump keeps drivers in their cars on cold, wet days. The SmartPump can service any automobile built after 1987 that has been fitted with a special gas cap and a windshield-mounted transponder that tells the robot where to insert the pump. The Miami Police bomb squad's AI robot is used to locate and deactivate bombs. Matsushita's courier robot navigates hospital hallways, delivering patient files, X-ray films, and medical supplies. Firefighter AI robots can extinguish flames at chemical plants and nuclear reactors with water, foam, powder, or inert gas. 39. List and define the four most common categories of AI. Answer: (1) Expert systems are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. (2) Neural networks attempt to emulate the way the human brain works. (3) Genetic algorithms mimic the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. (4) Intelligent agents are special-purposed knowledge-based information systems that accomplish specific tasks on behalf of their users. Chapter 10 Extending the Organization – Supply Chain Management Multiple Choice Questions 1. What does the average company spend on production needs? A. Almost 10 percent of every dollar that it earns. B. Almost 20 percent of every dollar that it earns. C. Almost 40 percent of every dollar that it earns. D. Almost 50 percent of every dollar that it earns. Answer: D. Almost 50 percent of every dollar that it earns. Rationale: The average company spends nearly half of every dollar that it earns on production needs. 2. When was SCM developed? A. 1950s B. 1970s C. 1990s D. 2004 Answer: C. 1990s Rationale: SCM's inception occurred in the early 1990s. 3. Today, SCM systems focus on extending beyond an organization's four walls to influence: A. Suppliers B. Suppliers' suppliers C. Customers' customers D. All of these Answer: D. All of these Rationale: SCM efforts extend beyond an organization's four walls to influence the entire supply chain, including customers, customers' customers, suppliers, and suppliers' suppliers. 4. Which of the following is not one of the three main links in the supply chain? A. Materials flow from suppliers and their downstream suppliers at all levels. B. Transformation of materials into semifinished and finished products-the organization's own production processes. C. Distribution of products to customers and their downstream customers at all levels. D. None of these. Answer: A. Materials flow from suppliers and their downstream suppliers at all levels. Rationale: Materials flow from suppliers and their "upstream" suppliers at all levels. 5. Which of the following is not one of the five basic components of supply chain management? A. Plan B. Source C. Cost D. Deliver Answer: C. Cost Rationale: Plan, source, make, deliver, and return are the five components of SCM. 6. Which of the following is not one of the main links in the supply chain? A. Materials flow from suppliers and their upstream suppliers at all levels. B. Transformation of materials into semifinished and finished products, or the organization's own production processes. C. Distribution of products to customers and their downstream customers at all levels. D. Materials flow from customers and their downstream customers at all levels. Answer: D. Materials flow from customers and their downstream customers at all levels. Rationale: Materials flow from suppliers and their upstream suppliers at all levels. 7. Which of the following is not one of the four changes resulting from advances in technology that are driving supply chains? A. Information technology B. Consumer behavior C. Visibility D. Scalability Answer: D. Scalability Rationale: Information technology, consumer behavior, visibility, and speed are the four changes resulting from advances in technology that are driving supply chains. 8. What is it called when distorted product demand information passes from one entity to the next throughout the supply chain? A. Bullwhip effect B. Demand planning software C. Supply chain planning software D. Supply chain execution software Answer: A. Bullwhip effect Rationale: This is the definition of the bullwhip effect. 9. Which of the following automates the different steps and stages of the supply chain? A. Bullwhip effect B. Demand planning software C. Supply chain planning software D. Supply chain execution software Answer: D. Supply chain execution software Rationale: This is the definition of supply chain execution software. 10. What is the ability to view all areas up and down the supply chain? A. Bullwhip effect B. Demand planning software C. Supply chain visibility D. Supply chain execution software Answer: C. Supply chain visibility Rationale: This is the definition of supply chain visibility. 11. Which of the following generates demand forecasts using statistical tools and forecasting techniques? A. Bullwhip effect B. Demand planning software C. Supply chain visibility D. Supply chain execution software Answer: B. Demand planning software Rationale: This is the definition of demand planning software. 12. Which of the following is not a principle of supply chain management? A. Customize the logistics network and focus intensively on the service requirements. B. Listen to signals of market demand and plan accordingly. C. Segment customers by service needs and then tailor services to those particular segments. D. Listen to signals from telecommunications equipment and plan accordingly. Answer: D. Listen to signals from telecommunications equipment and plan accordingly. Rationale: Listen to signals of market demand and plan accordingly is the correct principle of supply chain management. 13. What is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies from suppliers to customers? A. Supply chain execution B. Logistics C. Demand planning D. Supply chain planning Answer: B. Logistics Rationale: This is the definition of logistics. 14. Which of the following is a key to SCM success? A. Be future oriented. B. Listen to signals from telecommunications equipment and plan accordingly. C. Wean suppliers off traditional business practices. D. Make the sale to the manufacturers. Answer: A. Be future oriented. Rationale: Be future oriented is an SCM key to success. True/False Questions 15. The customers' customer is upstream in the supply chain. Answer: False Rationale: The customers' customer is downstream in the supply chain. 16. Plan, source, make, deliver, and return are the five basic supply chain management components. Answer: True Rationale: Plan, source, make, deliver, and return are the five basic supply chain management components. 17. Information technology, consumer behavior, visibility, and speed are the four changes resulting from advances in technology that are driving supply chains. Answer: False Rationale: Consumer behavior, competition, visibility, and speed are the four changes resulting from advances in technology that are driving supply chains. 18. Information technology's primary role in supply chain management is creating the integrations, or tight process and information linkages, between functions within a firm-such as marketing, sales, finance, manufacturing, and distribution-and between firms. Answer: True Rationale: Information technology's primary role in supply chain management is creating the integrations, or tight process and information linkages, between functions within a firm-such as marketing, sales, finance, manufacturing, and distribution-and between firms. 19. Deploy in incremental phases and measure and communicate success is one of the keys to success for SCM. Answer: True Rationale: This is a key to success for SCM. Fill in the Blank Questions 20. Materials flow from suppliers and their _______________ suppliers at all levels. Answer: Upstream 21. Distribution of products flow from customers and their _____________ customers at all levels. Answer: Downstream 22. Consumer behavior, _____________, competition, and speed are the four changes resulting from advances in IT that are driving supply chains. Answer: Visibility 23. The __________ effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain. Answer: Bullwhip 24. Make the sale to ___________ is one of the keys to SCM success. Answer: Suppliers Essay Questions 25. List and describe the components of a typical supply chain. Answer: The components of a typical supply chain include suppliers, suppliers' supplier, manufacturer, distributor, retailer, customer, and customer's customer. 26. Define the relationship between supply chain management and decision making. Answer: SCM enhances decision making. Collecting, analyzing, and distributing transactional information to all relevant parties, SCM systems help all the different entities in the supply chain work together more effectively. SCM systems provide dynamic holistic views of organizations. Users can "drill down" into detailed analyses of supply chain activities in a process analogous to DSS. Without SCM systems, organizations would be unable to make accurate and timely decisions regarding their supply chains. 27. Describe the four changes resulting from advances in IT that are driving supply chains. Answer: (1) Visibility-More visible models of different ways to do things in the supply chain have emerged. High visibility in the supply chain is changing industries, as Walmart demonstrated. (2) Consumer behavior-Companies must respond to demanding customers through supply chain enhancements. (3) Competition-Increased competition makes any organization that is ignoring its supply chain at risk of being obsolete. (4) Speed-As the pace of business increases through electronic media, an organization's supply chain must respond efficiently, accurately, and quickly. 28. Summarize the best practices for implementing a successful supply chain management system. Answer: (1) Make the sale to suppliers-A large part of any SCM system extends beyond the organization to the suppliers. Since the organization has little control over anything external to itself, these pieces are typically the most complicated. Be sure suppliers are on board with the benefits that the SCM system will provide to ease SCM implementation difficulties. (2) Wean employees off traditional business practices-If the organization cannot convince people that using the SCM software is worthwhile, the employees will probably find a way around using the software. (3) Ensure the SCM system supports the organizational goals-Be sure to select SCM software that supports organizational goals and strategies. (4) Deploy in incremental phases and measure and communicate success-Designing the deployment of the SCM system in incremental phases is the most successful deployment method. The BIG BANG approach-implementing everything at once-fails 90 percent of the time. (5) Be future oriented-An SCM system, like all systems, must scale to meet future demands. Chapter 11 Building a Customer-centric Organization – Customer Relationship Management Multiple Choice Questions 1. CRM allows an organization to accomplish all of the following except: A. Provide better customer service. B. Make call centers more efficient. C. Complicate marketing and sales processes. D. Help sales staff close deals faster. Answer: C. Complicate marketing and sales processes. Rationale: CRM allows an organization to simplify marketing and sales processes. 2. What is the top CRM business driver? A. Inventory control B. Increase revenues C. Competitive advantage D. Automation/productivity/efficiency Answer: D. Automation/productivity/efficiency Rationale: Automation/productivity/efficiency is the top CRM business driver, as displayed in the CRM business drivers figure. 3. Which of the following is not one of the CRM business drivers? A. Inventory control B. Increase revenues C. Accountability D. Automation/productivity/efficiency Answer: C. Accountability Rationale: Accessibility is the CRM business driver, not accountability. 4. Which of the following represents operational CRM? A. Supports traditional transactional processing. B. Supports day-to-day front-office operations. C. Supports operations that deal directly with the customers. D. All of these. Answer: D. All of these. Rationale: This is the definition of operational CRM. 5. What supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers? A. Analytical CRM B. Operational CRM C. Personalization D. All of these Answer: A. Analytical CRM Rationale: This is the definition of analytical CRM. 6. What made-to-order views can analytical CRM tools slice-and-dice customer information into? A. Customer value B. Customer spending C. Customer segmentation D. All of these Answer: D. All of these Rationale: Analytical CRM tools can slice-and-dice customer information to create made-to-order views of customer value, spending, product affinities, percentile profiles, and segmentations. 7. What can analytical CRM modeling tools discover? A. Identify opportunities for expanding customer relationships. B. Identify opportunities for cross-selling. C. Identify opportunities for up-selling. D. All of these. Answer: D. All of these. Rationale: Analytical CRM modeling tools can identify opportunities for cross-selling, up-selling, and expanding customer relationships. 8. What occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person? A. Operational CRM B. Analytical CRM C. Personalization D. All of these Answer: C. Personalization Rationale: This is the definition of personalization. 9. Which of the following is the first CRM implementation strategy? A. Define information needs and flows. B. Build an integrated view of the customer. C. Clearly communicate the CRM strategy. D. Implement in iterations. Answer: C. Clearly communicate the CRM strategy. Rationale: Clearly communicate the CRM strategy is the first CRM implementation strategy. 10. What is the formula that an organization can use to find its most valuable customers? A. RFM-reporting, features, monetary value. B. RFM-reporting, frequency, market share. C. RFM-recency, frequency, monetary value. D. RFM-recency, features, market share. Answer: C. RFM-recency, frequency, monetary value. Rationale: RFM-recency, frequency, monetary value-is the formula that an organization can use to find its most valuable customers. 11. What is the term that identifies how frequently a customer purchases items? A. Recency B. Frequency C. Monetary value D. Reporting Answer: B. Frequency Rationale: Frequency is the term that identifies how frequently a customer purchases items. 12. What is the term that defines how recently a customer purchased items? A. Recency B. Frequency C. Monetary value D. Reporting Answer: A. Recency Rationale: Recency defines how recently a customer purchased items. 13. What is the term that defines how much a customer spends on each purchase? A. Recency B. Frequency C. Monetary value D. Reporting Answer: C. Monetary value Rationale: Monetary value is the term that defines how much a customer spends on each purchase. 14. What are the three phases in the evolution of CRM? A. Recency, analyzing, predicting B. Reporting, analyzing, predicting C. Recency, analytical, processes D. Reporting, analytical, predicting Answer: B. Reporting, analyzing, predicting Rationale: Reporting, analyzing, and predicting are the three phases in the evolution of CRM. 15. Which of the following statements is incorrect? A. CRM reporting technologies help organizations identify their customers across other applications. B. CRM analysis technologies help organizations segment their customers into categories, such as best and worst customers. C. CRM predicting technologies help organizations make predictions regarding customer behavior, such as which customers are at risk of leaving. D. CRM predicting technologies help organizations identify their customers across other applications. Answer: D. CRM predicting technologies help organizations identify their customers across other applications. Rationale: D is an incorrect statement. 16. What is another term that represents CRM reporting technologies that help organizations identify their customers across other applications? A. Customer identification B. Customer segmentation C. Customer predicting D. All of these Answer: A. Customer identification Rationale: Customer identification is another term that represents CRM reporting technologies that help organizations identify their customers across other applications. 17. What is another term that represents CRM analysis technologies that help organizations segment their customers into categories such as best and worst customers? A. Customer identification B. Customer segmentation C. Customer predicting D. All of these Answer: B. Customer segmentation Rationale: Customer segmentation represents CRM analysis technologies that help organizations segment their customers into categories, such as best and worst customers. 18. Who did Business 2.0 rank as number one in the top 50 people who matter most in business? A. Bill Gates B. You-the business analyst C. Michael Dell D. You-the customer Answer: D. You-the customer Rationale: Business 2.0 ranked "You-the customer" as number one in the top 50 people who matter most in business. 19. Which of the following is not one of the questions asked during the reporting phase of CRM? A. What is the total revenue by customer? B. How many units did we manufacture? C. Where did we sell the most products? D. Who are our customers? Answer: D. Who are our customers? Rationale: "Who are our customers?" is a question asked during the analyzing phase. 20. Which of the following is not one of the questions asked during the analyzing phase of CRM? A. What customers are at risk of leaving? B. Why was customer revenue so high? C. Why did sales not meet forecasts? D. Who are our customers? Answer: A. What customers are at risk of leaving? Rationale: "What customers are at risk of leaving?" is a question asked during the predicting phase. 21. Which of the following is not one of the questions asked during the predicting phase of CRM? A. What is the total revenue by customer? B. What products will the customer buy? C. Who are the best candidates for a mailing? D. What is the lifetime profitability of a customer? Answer: A. What is the total revenue by customer? Rationale: "What is the total revenue by customer?" is a question asked during the reporting phase. 22. Which of the following is not a CRM industry best practice? A. Define information needs and flows. B. Build an integrated view of the customer. C. Scalability for organizational growth. D. Implement using the big-bang approach. Answer: D. Implement using the big-bang approach. Rationale: Implementation must occur in iterations, and the big-bang approach should be avoided. True/False Questions 23. CRM is a technology based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future. Answer: False Rationale: CRM is a business philosophy, not a technology, based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future. 24. The business world is shifting from customer focus to product focus. Answer: False Rationale: The business world is shifting from product focus to customer focus. 25. The Internet can completely replace the phone and face-to-face communications with customers. Answer: False Rationale: The Internet cannot completely replace the phone and face-to-face communications with customers. 26. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its suppliers. Answer: False Rationale: The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. 27. Back-office operations deal directly with the customer. Answer: False Rationale: Front-office operations deal directly with the customer. Fill in the Blank Questions 28. A customer strategy starts with understanding who the company's __________ are and how they help the company meet strategic goals. Answer: Customers 29. ___________ CRM supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. Answer: Operational 30. ___________ CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. Answer: Analytical 31. ___________ occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person. Answer: Personalization 32. ___________ office operations deal directly with the customer. Answer: Front Essay Questions 33. List and describe several benefits an organization can receive from CRM. Answer: (1) Provide better customer service, (2) make call centers more efficient, (3) cross-sell products more effectively, (4) help sales staff close deals faster, (5) simplify marketing and sales processes, (6) discover new customers, and (7) increase customer revenues. 34. Compare operational CRM and analytical CRM. Answer: Operational CRM supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. 35. List and describe the primary forces driving the explosive growth of CRM. Answer: (1) Automation/productivity/efficiency, (2) competitive advantage, (3) customer demands/requirements, (4) increase revenues, (5) decrease costs, (6) customer support, (7) inventory control, and (8) accessibility. 36. Define the relationship between decision making and analytical CRM. Answer: Analytical CRM solutions are designed to dig deep into a company's historical customer information and expose patterns of behavior on which a company can capitalize. Analytical CRM is primarily used to enhance and support decision making and works by identifying patterns in customer information collected from the various operational CRM systems. 37. List and describe the industry best practices for implementing a successful CRM system. Answer: (1) Clearly communicate the CRM strategy, (2) define information needs and flows, (3) build an integrated view of the customer, (4) implement in iterations, and (5) incorporate scalability for organizational growth. Chapter 12 Integrating the Organization from End-to-End – Enterprise Resource Planning Multiple Choice Questions 1. Which of the following describes ERP systems? A. ERP systems provide a foundation for collaboration between departments. B. ERP systems enable people in different business areas to communicate. C. ERP systems have been widely adopted in large organizations to store critical knowledge used to make the decisions that drive the organization's performance. D. All of these. Answer: D. All of these. Rationale: All of these describe ERP systems. 2. What is at the heart of any ERP system? A. Information B. Employees C. Customers D. Database Answer: D. Database Rationale: At the heart of an ERP system is a central database. 3. What must a system do to qualify as a true ERP solution? A. Be flexible. B. Be modular and closed. C. Extend only throughout the company, not outside the company. D. All of these. Answer: A. Be flexible. Rationale: To qualify as a true ERP solution, the system must be flexible, modular, and open and extend beyond the company. 4. Which of the following is a reason for ERP's explosive growth? A. ERP is a logical solution to the mess of incompatible applications. B. ERP addresses the need for global information sharing and reporting. C. ERP is used to avoid the pain and expense of fixing legacy systems. D. All of these. Answer: D. All of these. Rationale: All of these are reasons for ERP's explosive growth. 5. Which of the following occurs when everyone involved in sourcing, producing, and delivering the company's product works with the same information? A. Eliminates redundancies. B. Cuts down wasted time. C. Removes misinformation. D. All of these. Answer: D. All of these. Rationale: All of these occur due to the use of an ERP system. 6. What are several different types of software that sit in the middle of and provide connectivity between two or more software applications? A. Middleware B. Enterprise application integration middleware C. Automated business process D. Ebusiness infrastructure Answer: A. Middleware Rationale: This is the definition of middleware. 7. What represents a new approach to middleware by packaging together commonly used functionality, such as providing prebuilt links to popular enterprise applications, which reduces the time necessary to develop solutions that integrate applications from multiple vendors? A. Middleware B. Enterprise application integration middleware C. Automated business process D. Ebusiness infrastructure Answer: B. Enterprise application integration middleware Rationale: This is the definition of enterprise application integration middleware. 8. Who are the primary users of SCM systems? A. Sales, marketing, customer service B. Accounting, finance, logistics, and production C. Customers, resellers, partners, suppliers, and distributors D. All of these Answer: C. Customers, resellers, partners, suppliers, and distributors Rationale: The primary users of SCM systems are customers, resellers, partners, suppliers, and distributors. 9. What are the primary business benefits of an ERP system? A. Sales forecasts, sales strategies, and marketing campaigns. B. Market demand, resource and capacity constraints, and real-time scheduling. C. Forecasting, planning, purchasing, material management, warehousing, inventory, and distribution. D. All of these. Answer: C. Forecasting, planning, purchasing, material management, warehousing, inventory, and distribution. Rationale: The primary business benefits of an ERP system include forecasting, planning, purchasing, material management, warehousing, inventory, and distribution. 10. Who are the primary users of ERP systems? A. Sales, marketing, customer service B. Accounting, finance, logistics, and production C. Customers, resellers, partners, suppliers, and distributors D. All of these Answer: B. Accounting, finance, logistics, and production Rationale: The primary users of ERP systems are accounting, finance, logistics, and production. 11. Which application's primary business benefits include sales forecasts, sales strategies, and marketing campaigns? A. CRM B. SCM C. ERP D. All of these Answer: A. CRM Rationale: A CRM application's primary business benefits include sales forecasts, sales strategies, and marketing campaigns. 12. Which application's primary business benefits include market demand, resource and capacity constraints, and real-time scheduling? A. CRM B. SCM C. ERP D. All of these Answer: B. SCM Rationale: An SCM application's primary business benefits include better knowledge of market demand and of resource and capacity constraints, and real-time scheduling? 13. Which application's primary business benefits include forecasting, planning, purchasing, material management, warehousing, inventory, and distribution? A. CRM B. SCM C. ERP D. All of these Answer: C. ERP Rationale: An ERP application's primary business benefits include forecasting, planning, purchasing, material management, warehousing, inventory, and distribution. 14. Which application are employees most likely to use? A. CRM B. SCM C. ERP D. All of these Answer: D. All of these Rationale: Employees use all of these systems to perform their jobs. True/False Questions 15. In the past, departments made decisions independently of each other. Answer: True Rationale: In the past, departments made decisions independently of each other. 16. When a user enters or updates information in one ERP module, it is immediately and automatically updated throughout the entire system. Answer: True Rationale: When a user enters or updates information in one ERP module, it is immediately and automatically updated throughout the entire system. 17. One of the primary reasons for ERP's explosive growth is that an ERP system is a logical solution to the many incompatible applications found in business today. Answer: True Rationale: One of the primary reasons for ERP's explosive growth is that ERP is a logical solution to the many incompatible applications found in business today. 18. To qualify as an ERP system, it must be flexible, modular and open, and comprehensive, and it must extend beyond the company. Answer: True Rationale: These are the four components required to qualify as a true ERP solution. Fill in the Blank Questions 19. Integrations are achieved by using ___________. Answer: Middleware 20. Sales, marketing, and customer service are the primary users of ______ systems. Answer: CRM 21. Accounting, finance, logistics, and production are the primary users of ___________ systems. Answer: ERP Essay Questions 22. Describe the role information plays in enterprise resource planning systems. Answer: The primary purpose of an ERP system is to collect, update, and maintain enterprise-wide information. All of the functional departments access the same information when making decisions and solving problems. Refer to Figure 12.2 for a visual diagram of the role information plays in a typical ERP system. 23. Identify the primary forces driving the explosive growth of enterprise resource planning systems. Answer: (1) ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses. (2) ERP addresses the need for global information sharing and reporting. (3) ERP is used to avoid the pain and expense of fixing legacy systems. 24. Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems. Answer: Most organizations piecemeal their applications together, because no one vendor can respond to every organization's needs. Hence, customers purchase multiple applications from multiple vendors. For example, a single organization might choose its CRM components from Siebel, SCM from i2, financial from Oracle, and human resources from PeopleSoft. These applications must be integrated in order to gain an enterprise-wide view of the information. 25. Compare middleware and enterprise application integration middleware. Answer: Middleware is several different types of software, which sit in the middle of and provide connectivity between two or more software applications. Enterprise application integration middleware represents a new approach to middleware by packaging together commonly used functionality, such as providing prebuilt links to popular enterprise applications, which reduces the time necessary to develop solutions that integrate applications from multiple vendors. 26. Describe the primary users and primary business benefits of CRM, SCM, and ERP applications. Answer: CRM applications' primary users are sales, marketing, and customer service. CRM's primary business benefits are sales forecasts, sales strategies, and marketing campaigns. SCM applications' primary users are customers, resellers, partners, suppliers, and distributors. SCM's primary business benefits are market demand, resource and capacity constraints, and real-time scheduling. ERP applications' primary users are accounting, finance, logistics, and production. ERP's primary business benefits are forecasting, planning, purchasing, material management, warehousing, inventory, and distribution. Test Bank for Business Driven Technology Paige Baltzan 9780073376844, 9781259924927, 9781260727814, 9780073376905
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