hapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
1) Companies can use configuration tables provided by the enterprise software to tailor a particular aspect of the system to the way it does business.
Answer: TRUE
Diff: 2 Page Ref: 338
AACSB: Use of IT
CASE: Comprehension Objective: 9.4
2) Enterprise systems are typically built around one or two major business workflows.
Answer: FALSE
Diff: 1 Page Ref: 338
AACSB: Use of IT
CASE: Comprehension
Objective: 9.1
3) Enterprise systems are designed primarily to allow communication between an organization and outside partners and suppliers.
Answer: FALSE
Diff: 2 Page Ref: 337
AACSB: Use of IT
CASE: Comprehension
Objective: 9.1
4) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.
Answer: FALSE
Diff: 2 Page Ref: 341
AACSB: Reflective Thinking
CASE: Comprehension Objective: 9.2
5) Supply chain inefficiencies can waste as much as 25 percent of a company’s operating costs. Answer: TRUE
Diff: 2 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
6) Safety stock acts as an inexpensive buffer for the lack of flexibility in the supply chain.
Answer: FALSE
Diff: 2 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
7) The bullwhip effect is the distortion of information about the demand for a product as it passes from one entity to the next across the supply chain.
Answer: TRUE
Diff: 2 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
8) 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
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
9) To minimize the expense of implementing an enterprise system, businesses can opt to curtail the customization of an enterprise package and instead change business processes to match the software.
Answer: TRUE
Diff: 2 Page Ref: 356
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.4
10) Implementing an enterprise application typically requires organizational change as well as adjustments to existing business processes.
Answer: TRUE
Diff: 1 Page Ref: 356
AACSB: Use of IT
CASE: Comprehension
Objective: 9.4
11) In a push-based model of SCM systems, actual customer orders or purchases trigger events in the supply chain.
Answer: FALSE
Diff: 2 Page Ref: 347
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
12) In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for products.
Answer: FALSE
Diff: 2 Page Ref: 347
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
13) Wal-mart's strategy of continuous replenishment of inventory based on actual customer purchases is an example a pull-based SCM model.
Answer: TRUE
Diff: 2 Page Ref: 347
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
14) 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.
Answer: TRUE
Diff: 2 Page Ref: 348
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
15) You would expect to find PRM and ERM modules in the most comprehensive CRM software packages.
Answer: TRUE
Diff: 1 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
16) Major CRM application software vendors include Siebel Systems, PeopleSoft, SAP, and Salesforce.com.
Answer: TRUE
Diff: 3 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension Objective: 9.3
17) Cross-selling markets complementary products to customers.
Answer: TRUE
Diff: 2 Page Ref: 352
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.3
18) CRM software can help organizations identify high-value customers for preferential treatments.
Answer: TRUE
Diff: 2 Page Ref: 352-354
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
19) Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm’s customer touch points and from other sources.
Answer: TRUE
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Comprehension Objective: 9.3
20) Enterprise systems require fundamental changes in the way the business operates.
Answer: TRUE
Diff: 2 Page Ref: 355
AACSB: Use of IT
CASE: Comprehension
Objective: 9.4
21) From your reading of the Cannondale case study, the firm implemented new information systems in order to achieve which of the main six business objectives?
A) customer and supplier intimacy
B) survival
C) competitive advantageD) operational excellence
Answer: D
Diff: 3 Page Ref: 335
AACSB: Analytic Skills
CASE: Analysis in terms of categorize Objective: 9.1
22) Which of the following is not an example of next-generation enterprise applications?
A) open-source solutions
B) on-demand solutions
C) solutions incorporating SCM
D) solutions incorporating SOA
Answer: C
Diff: 3 Page Ref: 357
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.5
23) A suite of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes best describes A) SCM software.
B) ERP systems.
C) ERM software.
D) CRM modules.
Answer: B
Diff: 2 Page Ref: 337
AACSB: Use of IT
CASE: Comprehension
Objective: 9.1
24) Enterprise software is built around thousands of predefined business processes that reflect A) the firm's organization.
B) industry goals.
C) best practices.
D) cutting edge workflow analyses.
Answer: C
Diff: 2 Page Ref: 338
AACSB: Use of IT
CASE: Comprehension Objective: 9.1
25) 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 mimic their unique business practices.
D) Enterprise software includes analytical tools to evaluate overall organizational performance.
Answer: C
Diff: 2 Page Ref: 337-339
AACSB: Analytic Skills
CASE: Evaluation in terms of assess
Objective: 9.1
26) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take?
A) Select the functions of the system you wish to use.
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.
Answer: A
Diff: 2 Page Ref: 338
AACSB: Analytic Skills
CASE: Evaluation in terms of assess
Objective: 9.4
27) When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the company with A) configuration tables.
B) Web services.
C) data dictionaries.
D) middleware.
Answer: A
Diff: 2 Page Ref: 338
AACSB: Use of IT
CASE: Comprehension
Objective: 9.1
28) In order to achieve maximum benefit from an enterprise software package, a business A) customizes the software to match all of its business processes.
B) uses only the processes in the software that match its own processes.
C) changes the way it works to match the software’s business processes.
D) selects only the software that best matches its existing business processes.
Answer: C
Diff: 2 Page Ref: 339
AACSB: Use of IT
CASE: Evaluation in terms of assess
Objective: 9.4
29) Supply chain complexity and scale increases when firms A) move to globalization.
B) manage the procurement, manufacturing, and distribution functions themselves.
C) produce products and services that coordinate with hundreds or more firms and suppliers.
D) modify their existing workflows to comply with supply-chain management systems. Answer: C
Diff: 3 Page Ref: 340
AACSB: Analytic Skills
CASE: Analysis in terms of appraise
Objective: 9.2
30) Why is overstocking warehouses not 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.
Answer: D
Diff: 2 Page Ref: 342
AACSB: Analytic Skills
CASE: Analysis in terms of appraise
Objective: 9.2
31) 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 A) distribution channel.
B) supply chain.
C) value chain.
D) marketing channel.
Answer: B
Diff: 2 Page Ref: 340
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
32) Components or parts of finished products are referred to as A) upstream materials.
B) raw materials.
C) secondary products.
D) intermediate products.
Answer: D
Diff: 2 Page Ref: 341
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
33) A company’s suppliers and the processes for managing relationships with them is the A) supplier's internal supply chain.
B) external supply chain.
C) upstream portion of the supply chain.
D) downstream portion of the supply chain.
Answer: C
Diff: 2 Page Ref: 341
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
34) A company’s organizations and processes for distributing and delivering products to the final customers is the
A) supplier's internal supply chain.
B) external supply chain.
C) upstream portion of the supply chain.
D) downstream portion of the supply chain.
Answer: D
Diff: 2 Page Ref: 341
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
35) Uncertainties arise in any supply chain because of A) inaccurate or untimely information.
B) poor integration between systems of suppliers, manufacturers, and distributors.
C) inefficient or inaccurate MIS.
D) unforeseeable events.
Answer: D
Diff: 2 Page Ref: 342
AACSB: Analytic Skills
CASE: Analysis in terms of appraise
Objective: 9.2
36) 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
Answer: A
Diff: 2 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
37) 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
Answer: A
Diff: 2 Page Ref: 342
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
38) 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
Answer: B
Diff: 1 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
39) 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
Answer: D
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
40) Systems that enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product best describes supply chain ________ systems. A) demand
B) delivery
C) planning
D) execution
Answer: C
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
41) Supply chain planning systems
A) track the physical status of goods.
B) identify the transportation mode to use for product delivery.
C) track the financial information involving all parties.
D) track the status of orders. Answer: B
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
42) 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
Answer: C
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
43) Supply chain ________ systems manage 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) demand
B) delivery
C) planning
D) execution
Answer: D
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
44) Capabilities of supply chain execution systems would not include A) identifying the optimal transportation mode.
B) tracking the flow of finished goods.
C) managing materials.
D) managing warehouse operations.
Answer: A
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
45) From your reading of the Southwest Airlines case study, the company implemented a new inventory management system to achieve which of the following six business objectives?
A) customer and supplier intimacy
B) new products, services, and business models
C) survival
D) operational excellence
Answer: D
Diff: 2 Page Ref: 345-346
AACSB: Analytic Skills
CASE: Evaluation in terms of assess
Objective: 9.1
46) A supply chain driven by actual customer orders or purchases follows a ________ model.
A) pull-based model
B) build-to-stock
C) push-based
D) replenishment-driven
Answer: A
Diff: 2 Page Ref: 347
AACSB: Use of IT
CASE: Comprehension Objective: 9.2
47) A build-to-order supply-chain model is also called a ________ model.
A) supply-based
B) demand-driven
C) replenishment-driven
D) push-based
Answer: B
Diff: 2 Page Ref: 347
AACSB: Use of IT
CASE: Comprehension Objective: 9.2
48) 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
Answer: B
Diff: 1 Page Ref: 348
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
49) 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) increased inventory levels.Answer: D
Diff: 2 Page Ref: 348
AACSB: Analytic Skills
CASE: Evaluation in terms of assess
Objective: 9.2
50) 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
Answer: B
Diff: 2 Page Ref: 350
AACSB: Reflective Thinking
CASE: Comprehension Objective: 9.1
51) Which of the following would not be considered a contact point?
A) e-mail
B) Web site
C) intranet
D) retail store
Answer: C
Diff: 2 Page Ref: 350
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
52) ________ modules use many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners.
A) SCM B) SFA
C) ERM D) PRM
Answer: D
Diff: 2 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
53) ________ modules deal with issues such as setting objectives, employee performance management, and performance-based compensation.
A) SCM B) SFA
C) ERM D) PRM
Answer: C
Diff: 2 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
54) 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.
Answer: A
Diff: 2 Page Ref: 351-352
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
55) SFA modules in CRM systems would 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.
Answer: D
Diff: 1 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
56) 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.
Answer: A
Diff: 1 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
57) Marketing modules in CRM systems would 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.
Answer: C
Diff: 1 Page Ref: 352
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
58) ________ software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training.
A) Enterprise
B) ERM
C) PRM
D) ERP
Answer: B
Diff: 2 Page Ref: 286
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
59) Selling a customer with a checking account a home improvement loan is an example of A) operational CRM.
B) direct marketing.
C) cross-selling.
D) cross-channel promotions.Answer: C
Diff: 2 Page Ref: 352
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
60) ________ management is an important capability for service processes that is found in most major CRM software products.
A) Returns
B) Lead
C) AccountD) Events
Answer: A
Diff: 2 Page Ref: 353
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
61) Which of the following is an important capability for sales processes that is found in most major CRM software products?
A) returns management
B) lead management
C) channel promotions management
D) events management
Answer: B
Diff: 3 Page Ref: 353
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
62) Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes ________ applications.
A) operational CRM
B) analytical CRM
C) operational SCM
D) analytical SFA
Answer: B
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Synthesis in terms of applying Objective: 9.3
63) Analytical CRM applications
A) include tools for marketing automation.
B) provide consolidated data for operational CRM applications.
C) are based on data warehouses consolidated from operational CRM applications.
D) provide customer-facing applications.
Answer: C
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
64) Operational CRM applications include tools for A) identifying buying patterns.
B) calculating CLTV.
C) salesforce automation.
D) pinpointing unprofitable customers.
Answer: C
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
65) Analyzing customer buying patterns is an example of A) CLTV.
B) analytical CRM.
C) operational CRM.D) demand planning.
Answer: B
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
66) 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) CLTV
C) cost per lead
D) cost per sale
Answer: B
Diff: 2 Page Ref: 355
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.3
67) 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.
Answer: B
Diff: 2 Page Ref: 355
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.3
68) All of the following statements about enterprise applications are true except for A) Enterprise applications are more successfully implemented when an organization has prepared for organizational change.
B) Once you have purchased and implemented a vendor's enterprise system, it is much less expensive to switch vendors.
C) The total implementation cost of a large system runs into millions of dollars.
D) Enterprise applications are based on organization-wide definitions of data.
Answer: B
Diff: 2 Page Ref: 355-356
AACSB: Analytic Skills
CASE: Analysis in terms of appraise
Objective: 9.4
69) ________ integrate(s) multiple applications from multiple business functions, business units, or business partners to deliver a seamless experience for the customer, employee, manager, or business partner and provide a greater degree of cross-functional integration than the traditional enterprise applications.
A) PRM software
B) SFA software
C) ERP suites
D) Service platforms
Answer: D
Diff: 2 Page Ref: 360
AACSB: Use of IT
CASE: Comprehension
Objective: 9.5
70) 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) e-business suites
B) ERP systems
C) middleware
D) legacy systems
Answer: A
Diff: 1 Page Ref: 356-357
AACSB: Use of IT
CASE: Comprehension
Objective: 9.5
71) ________ consists of a set of interdependent software modules that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing. Answer: Enterprise software
Diff: 2 Page Ref: 337
AACSB: Use of IT
CASE: Comprehension
Objective: 9.1
72) As they move through the ________, raw materials are transformed into finished products and shipped to retailers and customers.
Answer: supply chain
Diff: 1 Page Ref: 340
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
73) In a(n) ________ strategy, components arrive exactly at the moment they are needed, and finished goods are shipped as they leave the assembly line.
Answer: just-in-time
Diff: 2 Page Ref: 342
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
74) To model its existing supply chain and make better decisions about managing inventory, a firm would implement the type of SCM called supply chain ________ systems.
Answer: planning
Diff: 2 Page Ref: 344
AACSB: Use of IT
CASE: Comprehension
Objective: 9.2
75) With new flows of information made possible by Web-based tools, supply chain management can more easily follow a(n) ________ model.
Answer: pull-based
Diff: 2 Page Ref: 347
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
76) ________ 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.
Answer: Sales force automation, SFA
Diff: 2 Page Ref: 351
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
77) ________ CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation.
Answer: Operational
Diff: 2 Page Ref: 354
AACSB: Use of IT
CASE: Comprehension
Objective: 9.3
78) A company's suppliers and it's suppliers' suppliers constitutes the ________ portion of the supply chain. Answer: upstream
Diff: 2 Page Ref: 341
AACSB: Reflective Thinking
CASE: Comprehension
Objective: 9.2
79) Enterprise-wide ________ platforms provide a greater degree of cross-functional integration than the traditional enterprise applications.
Answer: service
Diff: 2 Page Ref: 360
AACSB: Use of IT
CASE: Comprehension
Objective: 9.5
80) The most explosive growth in SaaS offerings has been for ________ software, exemplified by the leadership in hosted solutions by Salesforce.com
Answer: customer relationship management, CRM
Diff: 3 Page Ref: 357
AACSB: Use of IT
CASE: Comprehension
Objective: 9.5
83) 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.
Diff: 2 Page Ref: 344
AACSB: Analytic Skills