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Section A Multiple Choice Questions

Answer ALL 30 questions (60%) 2 marks for each correct answer

1. A digital enterprise uses IT to accomplish any of the following objectives except:

a) reach and engage customers more effectively
b) increase employee productivity
c) expand inventory supplies
d) improve operating efficiency

2. The collection of computing systems used by an enterprise is broadly termed:

a) information technology
b) electronic commerce
c) value-added network
d) extranet

3. Jacobi Medical Center tracks the whereabouts of patients and links them to their medical
records using ________ technology.
a) smart
b) RFID
c) ATM
d) adaptive

4. Dell’s innovative business model has been based on the concept of:
a) business growth and threatening competitors.
b) selling to small and medium sized businesses through intermediaries.
c) supplementing direct sales with build-to-order and auctions.
d) e-collaboration with a few select business partners.

5. Purely physical companies are referred to as ____________ companies, whereas companies

that are engaged only in EC are considered __________ companies.
a) click-and-mortar; click-and-brick
b) pure play; virtual
c) brick-and-mortar; virtual
d) virtual; pure play

6. Over which types of networks is e-commerce done?

a) the Internet and extranets.
b) the Internet and private networks.
c) the Internet, extranets, and private networks.
d) the Internet, value-added networks, on local area networks using intranets, or on a
single computerized machine.

7. A technological limitation of e-commerce is:

a) Lack of national and international government regulations and industry standards.
b) Many sellers and buyers waiting for EC to stabilize before they take part.
c) Lack of universally accepted standards for quality, security, and reliability.
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d) Many sellers and buyers waiting for EC to stabilize before they take part

8. Large corporations frequently consist of independent strategic business units (SBUs), which
buy or sell materials, products, and services from each other. Transactions of this type can be
easily automated and performed over the intranet. Major benefits of such e-commerce among
SBUs are all of the following except:
a) reducing inventories and costs along the supply chain
b) smoothing the supply chain
c) greater cooperation among SBUs
d) increasing a company’s competitive edge

9. The most significant barriers to the adoption of online mobile payments are the limited
availability of micropayments alternatives and _____________.
a) lack of interest by potential customers
b) privacy regulations
c) insufficient bandwidth
d) transaction costs charged by mobile carriers

10. Data privacy and ethics issues include all of the following except:
a) Concern about customer and employee privacy protection.
b) Restricting data access to authorized people for authorized purposes only.
c) Sharing data across departments to support CRM.
d) Cost of providing information required by the U.S. Department of Homeland Security
and other government agencies.

11. When all information services are handled the same way by one high-speed packet network
using either wireline or wireless, the impacts include all of the following except:
a) the technical barriers to collaborative work are eliminated
b) new forms of business communication using multimedia applications become possible
c) all remote and wireless access to the network are secured
d) the network does not restrict the kinds of computing devices that could be used

12. Which standard is internationally-accepted for digital cellular communication and is the most
popular standard for mobile phones?
a) TCP
b) GSM
c) SIP
d) UDP

13. ___________ such as Yahoo! and MSN are gateways to general information on the Internet.
a) Corporate portals
b) Mobile portals
c) Commercial portals
d) Vertical portals
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14. There are differences in the ways various search engines work. They each perform the
following basic tasks except:
a) They search the Internet based on key words.
b) They are powered by intelligent agents.
c) They keep an index of the words they find, and where they find them.
d) They allow users to search for words or combinations of words found in their index.

15. What is the technology for sending short text messages on cell phones?
a) EMS
b) GPS
c) MMS
d) SMS

16. What is the technology that enables Internet browsing from wireless devices?
a) WAP
b) EMS
c) WiMax
d) WLAN

17. Which of the following most accurately and comprehensively captures the key attributes
driving the development of m-commerce?
a) mobile devices, convenience, and localization of products and services
b) Ubiquity, convenience, and personalization
c) ubiquity, convenience, instant connectivity, personalization, and localization of
products and services
d) ubiquity, asynchronous connectivity, personalization, and localization of products and
services

18. All of the following describe social media except:

a) They refer to the online platforms and tools that people use to share opinions and
experiences with each other.
b) They are a powerful centralizing force.
c) They can take many different forms including text, images, audio, or video clips.
d) The key is that people control and use them rather than the enterprises.

19. What is a function provided by entrepreneurial networks?

a) Bring together professionals and resources that complement each others’ endeavors.
b) Provide motivation, direction, and increased access to opportunities.
c) Help obtain financial resources tailored to the membership demographic.
d) All of the above

20. The accuracy of data in a TPS is critical to an enterprise’s information systems for all of the
following reasons except:
a) Functional ISs get much of their data from the TPS.
b) BI, EC, CRM and other enterprise applications use data from the TPS.
c) Data mistakes only get detected by the accounting ISs.
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d) Integration among functional ISs and enterprise applications means that errors in the
TPS can lead to errors throughout the organization.

21. Which of the following is not a characteristic of a TPS?

a) Monitors, collects, stores, processes, and disseminates information for routine core
business transactions.
b) Provides critical data to e-commerce, especially data on customers and their
purchasing history.
c) Provides all the information needed by law or by organizational policies to keep the
business running properly and efficiently.
d) Processes large amounts of data mostly from external sources.

22. IT support of project management is needed for all of the following reasons except:
a) Uncertainty exists due to the generally long completion times for projects.
b) Most projects are routine undertakings, and participants have prior experience in the
area.
c) There can be significant participation of outsiders in projects, which is difficult to
control.
d) The many interrelated activities make changes in project planning and scheduling
difficult.

23. IT support of project management is needed for all of the following reasons except:
a) Uncertainty exists due to the generally long completion times for projects.
b) Most projects are routine undertakings, and participants have prior experience in the
area.
c) There can be significant participation of outsiders in projects, which is difficult to
control.
d) The many interrelated activities make changes in project planning and scheduling
difficult.

24. IT support of project management is needed for all of the following reasons except:
a) Uncertainty exists due to the generally long completion times for projects.
b) Most projects are routine undertakings, and participants have prior experience in the
area.
c) There can be significant participation of outsiders in projects, which is difficult to
control.
d) The many interrelated activities make changes in project planning and scheduling
difficult.

25. A major reason small companies go out of business is _________.

a) inaccurate cash flow projection
b) poor customer service
c) inaccurate inventory projection and management
d) insufficient marketing activities

26. What is the difference between enterprise systems and functional systems?
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a) Functional systems are confined to one department; enterprise systems involve two
departments.
b) Functional systems support accounting and payroll; enterprise systems support
marketing and operations.
c) Functional systems support production and operations; enterprise systems support
accounting and payroll.
d) Functional systems are confined to one department; enterprise systems involve the
entire enterprise or major portions of it.

27. Which of the following statements most comprehensively defines the supply chain?
a) Supply chains involve the flow of materials from raw materials suppliers and factories
to warehouses
b) Supply chains involve the flow of materials, information, money, and services from
raw materials suppliers, through factories and warehouses, to the end-consumers.
c) Supply chains involve the flow of materials and equipment from raw materials
suppliers to factories.
d) Supply chains involve the flow of materials and services from raw materials suppliers,
through factories and warehouses, to the end-consumers.

28. The following are components of CRM except:

a) channel management
b) sales and marketing
c) partner management
d) production

29. As part of its logistics strategy, Coca-Cola Enterprises (CCE) saves millions in distribution
costs by implementing _______________ systems to manage the supply chain network.
a) collaborative fulfillment
b) direct-store delivery
c) drop shipping
d) supply chain integration

30. In order to avoid failures and insure success, each of the following must be done when
implementing an ERP program except:
a) Create a steering group with a strong executive champion.
b) Set expectations and manage the project effectively.
c) Conduct a survey to determine how the organization responds to channel partners.
d) Enable the infrastructure to support the change.
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Section B Case Studies – Answer ALL 4 questions (30%)

PROCTER & GAMBLE TRIES TO OPTIMIZE INVENTORY

The shampoo and lipstick aisles at Target and Wal-Mart hardly seem like battlegrounds, but they
are actually sites for an unending struggle among consumer products companies for retail shelf
space. No company knows this better than Procter & Gamble, one of the world's largest
consumer goods companies, with annual revenue surpassing $76 billion and 138,000 employees
in 80 countries. The company sells more than 300 brands worldwide, including Cover Girl
cosmetics, Olay skin care, Crest, Charmin, Tide, Pringles, and Pampers.

Demand variability for P&G's products from its Beauty division is very high. A popular eye
shadow or lipstick color may quickly fall out of favor, while fashion trends call for new products
continually to come on stream. Major retail outlets such as Wal-Mart and Target compete by
offering brand-name products at the lowest price possible.
In response to these pressures, P&G is constantly searching for ways to reduce supply chain
costs and improve efficiency throughout its entire manufacturing and distribution network. It
recently implemented a multi-echelon inventory optimization system to manage its supply chain
more efficiently.

The supply chains of a company as large as P&G are extremely complicated, featuring thousands
of suppliers, manufacturing facilities, and markets. Even the slightest of changes at any part of
the supply chain has significant effects on all of the other participants. What's more, because
P&'G's supply chains are so extensive, the chance for any errors or inefficiencies to occur are
greater than with smaller, more compact supply chains. Inventory optimization for a company as
large as P&G is therefore critical to cutting costs and increasing revenues. P&'G was already
renowned for its supply chain management, successfully reducing its surplus inventory with
sales and operations planning, better forecasting, just-in-time delivery strategies, and vendor-
managed inventory activity. But multi-echelon inventory optimization has provided the company
with a new means to achieve even higher levels of efficiency.

Multi-echelon networks are networks in which products are located in a variety of locations
along their path to distribution, some of which are in different 'echelons', or tiers, of the
enterprise's distribution network. For example, large retailers' distribution networks often consist
of a regional distribution center and a larger number of forward distribution centers. The
presence of multiple echelons in a distribution network makes inventory management more
difficult because each echelon is isolated from other echelons, so changes in inventory made by
one echelon may have unpredictable consequences on the others.

Multi-echelon inventory optimization seeks to minimize the total inventory in all of the echelons
of a company's supply chain. This is more complicated than traditional inventory optimization
because of the additional lead times between each echelon, the bullwhip effect, and the need to
synchronize orders and control costs between echelons. Companies with this level of complexity
in their supply chains must replenish and divide their inventories at each distribution point along
the supply chain, as opposed to just one distribution point or even just the inventory of the initial
supplier. Each point in the supply chain is also unaware of the inventory levels of points beyond
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those that they have immediate contact with, which creates a lack of visibility up and down the
supply chain.

The multi-echelon approach to inventory management consists of the following factors: multiple
independent forecast updates in each echelon; accounting for all lead times and variations in lead
times; management of the bullwhip effect; creation of visibility up and down the demand chain;
synchronized order strategies; and appropriate modeling of the effects of different echelons'
replenishment strategies on one another.

P&G prefers to develop its own analytical tools, but in this case turned to Optiant for its
PowerChain Suite multi-echelon inventory optimization solution. Gillette, which P&G was
preparing to acquire at the time, had already begun using Optiant software with strong results.

PowerChain Suite determines appropriate inventory configurations that can adapt smoothly to
quickly changing demand. The solution uses mathematical models, based on award-winning
research from MIT, which balance costs, resources, and customer service to arrive at these
configurations. PowerChain tools pool inventory to minimize risk across products, components,
and customers and also coordinate inventory policy across different items. (When inventory is
available at the same time, this helps reduce early stock). PowerChain enables companies to
design new supply chains and to model their end-to-end supply chain. They then can quickly
evaluate the cost and performance of alternate supply chain structures and sourcing options to
make better decisions. Optiant has provided supply chain management for other leading
manufacturers such as Black & Decker, HP, IKEA, Imation, Intel, Kraft, Microsoft, and Sonoco.

P&'G's beauty division served as the pilot project for the adoption of the Optiant software.
Beauty is one of the company's largest, most complicated, and most profitable divisions. P&G
believed that if multi-echelon inventory strategies could increase profitability at this division, it
would work at any unit of the company.

The Optiant software first configured P&G's existing cosmetics supply chain, pulling in the
previous 18 months of demand data and using the previous three months' demand variability. It
then optimized the inventory strategy within that supply chain, aiming for target service levels
above 99%. A third step identified alternate supply chain designs, and the final step created an
optimal redesign of the supply network.

Results have been impressive. P&'G's beauty division trimmed its total inventory by 3 to 7
percent and maintained service levels above 99%. In the first fiscal year after implementation of
the new software the division's earnings rose 13% and sales rose 7%. Inventory days on hand
were down by eight days compared to the previous fiscal year. The results were so successful
that P&'G began rolling out multi-echelon inventory strategies across all of its various
manufacturing branches.

Sources: John Kerr, "Procter & Gamble Takes Inventory up a Notch," Supply Chain Management Review, February; “Optiant
Announces Multi-Echelon Inventory Optimization Enterprise Agreement with P&G” October 2007
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1. Why are larger supply chains more difficult to manage? List several reasons. (7 marks)

2. Why is supply chain management so important at a company such as P&G? (7 marks)

3. How did inventory optimization impact operations and decision making at P&G? (8
marks)

4. Why wouldn’t a small company derive as much benefit from multi-echelon inventory
optimization as a large company? Explain your answer. (8 marks)

Section C Essay – Answer any one and ONE only (10%)

Q1. Identify and explain major IT characteristics in changing our way in conducting business
and related transactions.

Q2. Explain the five value-added attributes that drive the development of m-commerce:
 ubiquity,
 convenience,
 instant connectivity,
 personalization, and
 localization of products and services.

Q3. How would reducing uncertainty lead to an improvement in net earnings? Describe a
database and a database management system (DBMS). Explain the benefits of using a database
management system (DBMS).