TB 08

Information System, Third Canadian Edition Rainer
Chapter 8
Information systems within the organization
Question Type: True/False
1) The Sportvision case shows IS are everywhere and can be used in many different ways.
Answer: True
Learning Objective: Provide a real-world application of an information system within an organization.

Section Reference: Opening Case
Difficulty: Easy
2) Pizza Pizza allowed their customers to design their own pizzas to increase sales while increasing the cost.
Answer: False

Section Reference: IT’s About Small Business: Pizza Pizza’s Customer App
Difficulty: Easy
3) TPSs provide data that can be stored in the organization’s databases.
Answer: True
Learning Objective: Explain the purposes of transaction processing systems, and provide at least one example of
how businesses use these systems.
Section Reference: 10.1 Transaction Processing Systems
Difficulty: Easy
4) The functional area information systems are the most fundamental information systems in the organization.
Answer: False
Difficulty: Easy
5) The data processed by transaction processing systems provide the inputs for other organizational information
systems.
Answer: True
Difficulty: Easy
6) Greg is mowing lawns in the neighborhood for the summer. He does not need an information system.
Answer: False
Difficulty: Easy
7) In general, organizations try to automate data entry as much as possible.
Answer: True
Difficulty: Easy
8) HR Information Management System was originally for benefits and tracking vacation.
Answer: True
Learning Objective: Define functional area information systems, and provide an example of the support they
provide for each functional area of the organization.
Section Reference: 10.2 Functional Area Information Systems
Difficulty: Medium
9) When you make a purchase online, that transaction is an example of batch processing.
Answer: False
Difficulty: Medium
10) Source data automation involves collecting data from sensors.

Answer: True
Difficulty: Medium
11) Functional information systems support the entire enterprise or major portions of it.
Answer: False
Difficulty: Easy
12) The information systems for Accounting and Finance could contain control and auditing process.
Answer: True
Difficulty: Easy
13) The POM function within an organization monitors the customer sales activity.
Answer: False
Difficulty: Easy
14) An example of a transaction in a HRIS application is adding a new employee.
Answer: True
Difficulty: Easy
15) Information systems can be function-specific.
Answer: True
Difficulty: Easy
16) Historically, the functional area information systems were developed independently of one another.
Answer: True
Difficulty: Easy
17) EAI are not necessary if an ERP system has been installed.
Answer: False
Learning Objective: Explain the purpose of enterprise resource planning systems, and identify four advantages
and four drawbacks to implementing an ERP system.
Section Reference: 10.3 Enterprise Resource Planning Systems
Difficulty: Hard
18) Airgas chose to implement SAP “as-is” to adopt the industry’s best practices.
Answer: False
Difficulty: Easy
19) Information silos were particularly efficient when business processes crossed functional boundaries in an
organization.
Answer: False
Difficulty: Easy
20) Business processes may be located within one functional area or may span multiple functional areas.
Answer: True
Difficulty: Easy
21) Best practices are the most successful solutions or problem-solving methods for achieving a business
objective.
Answer: True
Difficulty: Easy
22) ERP II systems are considered 3rd generation ERP systems.
Answer: True
Difficulty: Easy
23) Enterprise resource management is an enterprise-wide effort to acquire and retain customers.
Answer: False
Difficulty: Easy
24) Financial management, operations management, and human resource management are extended ERP
modules.
Answer: False
Difficulty: Easy
25) ERP systems integrate the planning, management and use of all resources of the organization.
Answer: True
Difficulty: Easy
26) When ERP systems are not appropriate in an organization, then that organization can use an enterprise
application integration system.
Answer: True
Difficulty: Easy
27) Organizations that use ERP systems are more agile and adaptive.
Answer: True
Difficulty: Easy
28) Exception reports show a greater level of detail than is included in routine reports.
Answer: False
Learning Objective: Discuss the three major types of reports generated by the functional area information
systems and enterprise resource planning systems, and provide an example of each type.
Section Reference: 10.4 Reports
Difficulty: Easy
29) Comparative reports compare things.
Answer: True
Difficulty: Easy
30) Key-indicator reports shows data at a greater level of detail.
Answer: False
Difficulty: Easy
31) Drill down reports are produced at scheduled intervals.
Answer: False
Difficulty: Medium
32) Ad hoc reports are run weekly.
Answer: False
Difficulty: Easy
33) ERP systems always provide a competitive advantage because they make a business so much more efficient.
Answer: False
Difficulty: Easy
34) An organization has to own all of the information systems it used.
Answer: False

Section Reference: Opening Case: Is Baseball a Science?
Difficulty: Medium
35) Airgas improved its efficiencies by using SAP, which is a customer relationship management system.
Answer: False
Section Reference: IT’s About Business: 10.2 SAP at Airgas
Difficulty: Medium
36) A company that implements an ERP system must reworking their business processes to meet the procedures
established by their ERP systems to gain significant benefits.
Answer: True
Learning Objective: Summarize the fundamental concepts and skills related to the roles and functions of
information systems within organizations.
Section Reference: Closing Case: Difficulties in Managing Enterprise Resource Planning Systems
Difficulty: Medium
Question Type: Multiple Choice

37) Sportvision is an example of a(n) __________.
a) ERP system
b) Expert system
c) FAIS
d) TPS
Answer: d

Section Reference: Opening Case
Difficulty: Medium
38) Which of the following is true?
a) Transactions are only critical to the area they occur in.

b) Transactions can only involve one database.
c) Transactions can only involve one computer.
d) The actual processing of a Transaction has to be standard.
e) Transactions generate a small volume of data.
Answer: d
Difficulty: Medium
39) Which of the following is false?
a) Corporate data is supplied by Transaction processing systems.

b) Information systems are only used by large organizations.
c) Reports from information systems are used in all levels of the organization.
d) Data from TPS systems feeds ERP systems.
e) Information systems within an organization support internal and external processes.
Answer: b
Difficulty: Hard
40) Which of the following is NOT a requirement for a TPS?
a) Avoid errors
b) Efficiently handle data in high volumes
c) Provide data analysis capabilities
d) Scalability
Answer: c
Difficulty: Easy
41) Organizational transactions are typically _____ volume, _____, and therefore _____ to computerize.
a) low, repetitive, difficult

b) high, repetitive, easy
c) high, different, difficult
d) low, different, easy
e) high, different, easy
Answer: b
Difficulty: Medium
42) Business transactions that are processed as they occur is an example of
a) batch processing
b) source data automation
c) OLTP
d) TPS
e) ESS
Answer: c
Difficulty: Medium
43) ____________ is when business transactions are processed as soon as they occur.
a) Batch processing
b) OLAP
c) OLTP
d) Source data automation
Answer: c
Difficulty: Easy
44) The most fundamental information systems in an organization are:
a) Office automation systems

b) Decision support systems
c) Functional area information systems
d) Transaction processing systems
e) Business intelligence systems
Answer: d
Difficulty: Easy
45) When interest is credited to your savings account at your bank, it is called a:
a) Process
b) Function
c) Calculation
d) Transaction
e) Decision
Answer: d
Difficulty: Medium
46) Batch processing is when the firm collects data from transactions __________, places them in groups, then
prepares and processes the batches ___________.
a) as they occur, as they occur

b) as they occur, periodically
c) periodically, as they occur
d) periodically, periodically
Answer: b
Difficulty: Easy
47) Crediting interest to your savings account at your bank once a month, it is called a:
a) Process
b) Function
c) Calculation
d) Transaction
e) Decision
Answer: a
Difficulty: Medium
48) When interest is credited to your savings account at your bank, it is called a:
a) Process
b) Function
c) Calculation
d) Transaction
e) Decision
Answer: d
Difficulty: Medium
49) Data that have been processed by the organization’s _____ are inputs into the organization’s database.
a) office automation systems

b) functional area information systems
c) Transaction processing systems
d) decision support systems
e) digital dashboards
Answer: c
Difficulty: Easy
50) Which of the following is not a characteristic of a transaction processing system?
a) Small amounts of data are processed

b) Sources of data are mainly internal
c) Low computation complexity
d) High level of accuracy, data integrity, and security
e) High level of detail
Answer: a
Difficulty: Easy
51) Which of the following is not an example of a transaction?
a) A person hired
b) A payroll check generated
c) A service sold
d) Printing a report
e) Checking out at Walmart
Answer: d
Difficulty: Hard
52) Greg is mowing lawns in the neighborhood for the summer. Which of the following is not an example of a
transaction he has in his business?
a) Adding a new client to his list.

b) Mowing a client’s lawn
c) Buying gas for his mower
d) Driving to the client’s house
e) Getting paid by the client
Answer: d
Difficulty: Medium
a) TPS need large computers to process the transactions.

b) Business transactions can be processed when they occur.
c) Business transactions can be processed after they occur.
d) Data for transactions can be collected by sensors.
e) A transaction is a business event.
Answer: a
Difficulty: Hard
54) Which of the following is not a function of functional area information systems?
a) Providing information to managers in the functional areas

b) Supporting the managerial tasks of planning, organizing, and controlling operations
c) Providing information mainly in the form of reports
d) Providing data from business events to the corporate database
e) Providing analysis capabilities to middle level managers and staff
Answer: d
Difficulty: Easy
55) Functional area information systems provide ___________ mainly to lower- and middle-level managers in
the functional areas via a variety of reports.
a) data
b) knowledge
c) information
d) wisdom
Answer: c
Difficulty: Easy
56) Which of the following is not a process within an information system for Accounting and Finance?
a) Budgeting
b) Managing Currencies
c) Inventory management
d) Auditing
e) Expense management
Answer: c
Difficulty: Medium
57) __________ involves monitoring how money is spent and assessing financial health.
a) Auditing
b) Budgetary control
c) Financial ratio analysis
d) Investment management
Answer: a
Difficulty: Easy
58) Which of the following is not a process within an information system for Human Resource Management?
a) Benefits administration
b) Firing decisions
c) Peer evaluations
d) Recruitment
e) Training
Answer: b
Difficulty: Easy
59) The “virtual close” is part of the _________ functional area.
a) Accounting and Finance

b) Human Resource Management
c) Marketing
d) Production/Operations Management
Answer: a
Difficulty: Medium
a) Inventory management determines how much inventory to order.

b) Large companies allow their vendors to manage their inventory.
c) The POM function within an organization monitors sales.
d) Quality control used by manufacturing units uses metrics.
e) Computer systems are used to integrate all aspects of product design.
Answer: c
Difficulty: Medium
61) MRP is part of the ______________ functional area.
a) Accounting and Finance

b) Human Resource Management
c) Marketing
d) Production/Operations Management
Answer: d
Difficulty: Medium

a) ERP systems are an evolution of functional information systems.

b) ERP systems look the same to users as functional information systems.
c) ERP systems have much the same functionality as functional information systems.
d) ERP systems produce the same reports as functional information systems.
e) ERP systems use the same data as functional information systems.
Answer: b
Difficulty: Medium
63) Enterprise resource planning systems take a(n) _____ view of the overall organization.
a) User’s
b) Management
c) Functional
d) Business process
e) Transactional
Answer: d
Difficulty: Medium
64) _________ integrate the planning, management and use of all resources of the organization.
a) ERP systems
b) Expert systems
c) FAISs
d) TPSs
Answer: a
Difficulty: Easy
65) _____ integrate the planning, management, and use of all of an organization’s resources, and are designed
to tightly integrate the functional areas of the organization.
a) Transaction processing systems

b) Supply chain management systems

c) Functional area information systems
d) Enterprise resource planning systems
e) Corporate extranets
Answer: d
Difficulty: Easy
a) Functional area information systems were usually developed independently.

b) Functional area information systems easily communicate with each other.
c) ERP systems are designed to integrate business processes.
d) ERP systems use a common database.
e) ERP systems integrate functional areas within an organization.
Answer: b
Difficulty: Medium
67) ERP systems are designed to break down ____________.
a) expert systems
b) FAISs
c) information silos
d) TPSs
Answer: c
Difficulty: Medium
68) The ________ generation of ERP allows a company to compete on a functional level by adopting an
enterprisewide approach using the Internet to connect all participants in the value chain.
a) 1st
b) 2nd
c) 3rd
d) 4th
Answer: c
Difficulty: Easy
69) The characteristics of ERP systems include all of the following except:
a) Integrating the planning, management, and use of all resources of the organization
b) Providing information necessary to control the business processes of the organization
c) Including a set of interdependent software modules
d) Typically fitting an organization’s existing business processes
e) They are expensive and time-consuming
Answer: d
Difficulty: Easy
70) Enterprise resource planning systems are very _____ software products, meaning that companies typically
have to change their _____ to accommodate how the software functions.
a) unstructured, business processes

b) structured, reporting relationships
c) structured, accounting processes
d) unstructured, inventory control
e) structured, business processes
Answer: e
Difficulty: Medium
71) The ________ generation of ERP was designed to address back-office business processes.
a) 1st
b) 2nd
c) 3rd
d) 4th
Answer: a
Difficulty: Easy
72) _____ are interorganizational ERP systems that provide Web-enabled links between an organization’s key
business systems and its customers, suppliers, business partners, and others.
a) Functional area information systems

b) Supply chain management systems
c) Transaction processing systems
d) Office automation systems
e) ERP II systems
Answer: e
Difficulty: Easy
73) _____ are the most successful solutions or problem-solving methods for achieving a business objective.
a) Business functions
b) Best practices
c) Optimal strategies
d) Business processes
e) Enterprise solutions
Answer: b
Difficulty: Easy
74) Which of the following is NOT a benefit Airgas received by implementing SAP?
a) Better price management

b) Competitiveness
c) Leaner operating costs
d) Small increase in revenue
Answer: d
Difficulty: Easy
75) The drawbacks of ERP systems include all of the following except:
a) They are complex

b) They are expensive
c) They are time-consuming to implement
d) Companies may need to change existing business processes to fit the software
e) They consist of modules
Answer: e
Difficulty: Easy
76) Which of the following is a benefit of ERP systems?
a) Business process adaptation

b) Complexity
c) Cost
d) Flexibility
Answer: d
Difficulty: Medium
77) Which of the following was not included in early ERP systems?
a) Sales and Marketing

b) Inventory Control
c) Order Entry
d) Distribution
e) Raw materials management
Answer: a
Difficulty: Easy
78) Which of the following is a limitation of ERP systems?
a) Cost
b) Decision-making
c) Efficiency
d) Flexibility
Answer: a
Difficulty: Easy
79) Which of the following is false about ERP II systems?
a) They utilize the Web.

b) They include human resources processes.
c) Functionality is delivered as e-business suites.
d) They support internal- facing applications as well as external-facing applications.
e) These ERP systems have no optional modules.
Answer: e
Difficulty: Easy
a) Breaking down functional silos makes an organization more adaptive.

b) An organization doesn’t have to use the business processes coded into the ERP.
c) ERP systems change an organization’s business processes.
d) ERP systems are time consuming to implement.
e) ERP systems require functional areas to work together.
Answer: b
Difficulty: Easy
81) Which of the following has not been identified as a reason for ERP implementation failure?
a) Failure to include affected employees in planning

b) The complexity of the planning
c) Lack of documentation
d) Insufficient training
e) No change management processes
Answer: c
Difficulty: Medium
82) A __________ report summarizes the performance of critical activities.
a) comparative
b) drill-down
c) key indicator
d) summary
Answer: c
Difficulty: Easy
83) _____ reports contain special information not found in routine reports.
a) Ad hoc
b) Summary
c) Drill-down
d) Key-indicator
e) Exception
Answer: a
Difficulty: Easy
84) __________ reports allow users to click on an item in a report and to be able to access underlying details
about that item.
a) Comparative
b) Detailed
c) Drill-down
d) Summary
Answer: c
Difficulty: Easy
85) _____ reports are produced at scheduled intervals.
a) Ad hoc
b) Routine
c) Exception
d) Detailed
e) Key indicator
Answer: b
Difficulty: Easy
86) __________ reports include only information that falls outside certain threshold standards.
a) Comparative
b) Exception
c) Key indicator
d) Summary
Answer: b
Difficulty: Easy
87) _____ reports summarize the performance of critical activities.
a) Ad hoc
b) Routine
c) Exception
d) Detailed
e) Key indicator
Answer: e
Difficulty: Easy
88) Kathy has taken a job with her ideal company and is excited to start in their sales department. During
orientation, she is told that the company is very proud of their ERP system from SAP. Looking at the list of
modules the company has, Kathy wonders which one she won’t be using. From the list below, which one would
you tell Kathy is the one she won’t be using.
a) Customer relationship management

b) Human resource management
c) Business intelligence
d) Operations management
e) E-Business
Answer: d
Difficulty: Easy
89) When the chief financial officer of a company wants a report on business units who have spent 10 percent
more than their allotted budget, she would be requesting which type of report?
a) Ad hoc
b) Routine
c) Exception
d) Detailed
e) Key indicator
Answer: c
Difficulty: Medium
90) _____ reports include only information that falls outside certain threshold standards.
a) Ad hoc
b) Routine
c) Exception
d) Detailed
e) Key indicator
Answer: c
Difficulty: Easy
91) Which of the following is NOT an ad hoc report?
a) Comparative report
b) Drill-down report
c) Key-indicator report
d) Monthly report
Answer: d
Difficulty: Easy
92) To effectively manage by exception (i.e., use exception reports), the company must first create:
a) Performance standards
b) Best practices
c) User information requirements
d) A database
e) Employee evaluation guides
Answer: a
Difficulty: Easy
93) Greg is mowing lawns in the neighborhood for the summer. Which type of report would he used to see
which of his clients still owe him money?
a) Ad hoc
b) Summary
c) Exception
d) Detailed
e) Key indicator
Answer: c
Difficulty: Easy
94) Greg is mowing lawns in the neighborhood for the summer. Which type of report would he used to see
which if a particular client still owe him money?
a) Ad hoc
b) Routine
c) Exception
d) Detailed
e) Key indicator
Answer: a
Difficulty: Easy
95) Pizza Pizza allowed customers to design their own pizzas via iPhone to:
a) Increase sales
b) Decrease costs
c) Increase costs
d) A and b
e) A and c
Answer: d

Section Reference: IT’s About Small Business: Pizza Pizza’s Customer App
Difficulty: Easy
96) Which of the following is false regarding SAP at Airgas?
a) Airgas saw economic benefits during the conversion process.

b) The project will be over its projected cost budget.
c) Airgas switched over its supply chain operations to SAP first.
d) Airgas used subject-matter experts to identify required functionality in their SAP system.
e) Airgas implemented SAP without the help of consultants.
Answer: e
Section Reference: IT’s About Business: 10.2 SAP at Airgas
Difficulty: Medium
97) Which of the following is true?
a) Implementing an ERP system will maintain a competitive advantage.

b) Implementing an ERP system will allow a company to operate faster than their competition.
c) The IT costs of an ERP implementation goes down over time.
d) Customizing an ERP system is permitted.
e) The benefits of an ERP implementation go down over time.
Answer: d
Difficulty: Medium
98) Kennametal’s main problem with its ERP installation was _________.
a) it cost too much

b) it couldn’t upgrade the ERP system
c) it made their business processes less efficient

d) all of the above were problems Kennametal experienced
Answer: b
Difficulty: Easy
Question Type: Essay
99) Differentiate between transaction processing systems and functional area information systems.
Section Reference: 10.1 Transaction Processing Systems and Functional Area Information Systems
Difficulty: Medium
100) Differentiate between batch processing and online transaction processing.
Difficulty: Medium
101) Greg is mowing lawns in the neighborhood for the summer. How could he use source data automation to
make data entry easier?
Difficulty: Medium
102) Explain how information systems for accounting and finance support an organization.
Difficulty: Medium
103) Explain how information systems for production operations management support an organization.
Difficulty: Medium
104) Explain how information systems for human resource management support an organization.
Difficulty: Medium
105) Explain how information systems for marketing and sales support an organization.
Difficulty: Medium
106) Define enterprise resource planning systems and discuss why they were developed.
Difficulty: Medium
107) Describe the various reports that can be obtained from functional area information systems.
Difficulty: Medium
108) Contrast routine reports and drill-down reports.
Difficulty: Easy
109) Define source data automation and describe why this process is so important to transaction processing
systems.
Difficulty: Hard
110) Discuss why functional area information systems would have been built as silos. Explain the limitations of
that approach.
Difficulty: Medium
111) Discuss the reasons why ERP systems evolved and what organizations hope to gain by implementing them.
Difficulty: Medium
112) Differentiate between ERP systems and ERP II systems.
Difficulty: Medium
113) What are ad-hoc (on-demand) reports? Why does an organization need to be able to run ad-hoc reports?
Difficulty: Easy
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Copyright © 2014 by John Wiley & Sons Canada, Ltd. or related companies. All rights reserved.
The data contained in these files are protected by copyright. This manual is furnished under licence and
may be used only in accordance with the terms of such licence.
The material provided herein may not be downloaded, reproduced, stored in a retrieval system,
modified, made available on a network, used to create derivative works, or transmitted in any form or by
any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior
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Information System, Third Canadian Edition Rainer

Question Type: True/False

Learning Objective: Provide a real-world application of an information system within an organization.

Learning Objective: Provide a real-world application of an information system within an organization.

3) TPSs provide data that can be stored in the organization’s databases.

7) In general, organizations try to automate data entry as much as possible.

10) Source data automation involves collecting data from sensors.

14) An example of a transaction in a HRIS application is adding a new employee.

15) Information systems can be function-specific.

22) ERP II systems are considered 3rd generation ERP systems.

29) Comparative reports compare things.

30) Key-indicator reports shows data at a greater level of detail.

31) Drill down reports are produced at scheduled intervals.

32) Ad hoc reports are run weekly.

34) An organization has to own all of the information systems it used.

Learning Objective: Provide a real-world application of an information system within an organization.

Question Type: Multiple Choice

Learning Objective: Provide a real-world application of an information system within an organization.

38) Which of the following is true?

a) Transactions are only critical to the area they occur in.

39) Which of the following is false?

a) Corporate data is supplied by Transaction processing systems.

40) Which of the following is NOT a requirement for a TPS?

a) low, repetitive, difficult

42) Business transactions that are processed as they occur is an example of

44) The most fundamental information systems in an organization are:

a) Office automation systems

a) as they occur, as they occur

a) office automation systems

50) Which of the following is not a characteristic of a transaction processing system?

a) Small amounts of data are processed

51) Which of the following is not an example of a transaction?

a) Adding a new client to his list.

53) Which of the following is false?

a) TPS need large computers to process the transactions.

a) Providing information to managers in the functional areas

59) The “virtual close” is part of the _________ functional area.

a) Accounting and Finance

60) Which of the following is false?

a) Inventory management determines how much inventory to order.

61) MRP is part of the ______________ functional area.

a) Accounting and Finance

62) Which of the following is false?

a) ERP systems are an evolution of functional information systems.

a) Transaction processing systems

b) Supply chain management systems

66) Which of the following is false?

a) Functional area information systems were usually developed independently.

67) ERP systems are designed to break down ____________.

a) unstructured, business processes

a) Functional area information systems

a) Better price management

a) They are complex

76) Which of the following is a benefit of ERP systems?

a) Business process adaptation

a) Sales and Marketing

78) Which of the following is a limitation of ERP systems?

79) Which of the following is false about ERP II systems?

a) They utilize the Web.

80) Which of the following is false?

a) Breaking down functional silos makes an organization more adaptive.

e) ERP systems require functional areas to work together.

a) Failure to include affected employees in planning