Test Bank for Information Systems Today, 8th Edition, Joseph Valacich

Test Bank for Information Systems Today, 8th

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Information Systems Today, 8e (Valacich)
Chapter 8 Strengthening Business-to-Business Relationships via Supply Chain and
Customer Relationship Management

1) The term ________ is commonly used to refer to a collection of companies and processes
involved in moving a product from the suppliers of raw materials to the customer.
A) supply warehouse
B) supply chain
C) procurement
D) demand chain
E) value network
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

2) Which of the following statements about a just-in-time strategy is true?

A) Retailers using this strategy allow suppliers to maintain ownership of inventory within their
warehouses or stores until items are scanned at the point of sale.
B) Companies using this strategy allow suppliers to manage the manufacturer's inventory levels
based on pre-established service levels.
C) Companies using this strategy maintain large inventories of supplies, parts, warehousing
resources, and extra workers to meet production contingencies.
D) Companies using this strategy try to optimize their ordering quantities such that parts or raw
materials arrive just when they are needed for production.
E) A manufacturer or retailer using this strategy shares real-time sales data with suppliers who
maintain inventory levels based on pre-established agreements.
Answer: D
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

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3) ________ is a business model in which the suppliers to a manufacturer manage the
manufacturer's inventory levels based on preestablished service levels.
A) Just-in-case manufacturing
B) Scan-based trading
C) Vendor-managed inventory
D) Lean manufacturing
E) Just-in-time manufacturing
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

4) Which of the following statements about vendor-managed inventory (VMI) is true?

A) To make VMI possible, the manufacturer must maintain large inventories of supplies, parts,
warehousing resources, and extra workers to meet production contingencies.
B) Manufacturers using the VMI business model manage the inventories themselves and send
out requests for additional items to the vendors as needed.
C) Companies using this strategy try to optimize their ordering quantities such that parts or raw
material arrive just when they are needed for production.
D) To make VMI possible, the manufacturer allows the supplier to monitor stock levels and
ongoing sales data.
E) Retailers using this strategy allow suppliers to maintain ownership of inventory within their
warehouses or stores until items are scanned at the point of sale.
Answer: D
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

5) One major problem affecting supply chains are ripple effects referred to as the ________
effect.
A) backflush
B) multiplier
C) bullwhip
D) incremental
E) stockwhip
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

2
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6) Computer maker Dell realized the problems with keeping large inventories, especially
because of the fast rate of obsolescence of electronics components. Dell now keeps only about
two hours of inventory in its factories. The company is most likely using a ________ system.
A) scan-based trading
B) customer-managed inventory
C) just-in-time inventory management
D) vendor-managed inventory
E) just-in-case inventory management
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

7) MaXoSteel Inc. has been supplying steel to Agis Corp., a well-known car manufacturer, for
the past three years. Concerned employees at MaXoSteel can directly access Agis' inventory
and sales information via electronic data interchange. This allows MaXoSteel to monitor Agis'
inventory levels on a real-time basis. The system has worked well for both companies so far
and there has never been any delay in the supply of steel. Which of the following steps, if taken
by Agis, would most strengthen its supply chain strategy?
A) Agis Corp.'s management decides to take strong measures for increasing its safety stock of
all raw materials.
B) Agis takes measures to add wholesalers and retailers into its supply chain.
C) Agis wants to purchase MaXoSteel in order to reduce dependency.
D) Agis takes measures to directly contact the consumers by removing wholesalers and retailers
from its supply chain.
E) Agis takes measures to ensure that the information shared with MaXoSteel is not shared
with outsiders.
Answer: E
AACSB: Reflective thinking; Information technology
Difficulty: Difficult
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

3
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8) Fen-phen was an anti-obesity medication that consisted of two drugs: fenfluramine and
phentermine. Fenfluramine was initially marketed by American Home Products. It was shown
to cause potentially fatal pulmonary hypertension and heart valve problems. This eventually led
to the withdrawal of the product and legal damages of over $13 billion. This is an example of
________.
A) a product recall
B) lean manufacturing
C) production control
D) the bullwhip effect
E) a green business
Answer: A
AACSB: Analytical thinking
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

9) La Belle Inc. introduced a new line of accessories for teenage girls last season. Following its
immense popularity with the targeted group, the company anticipated high sales in the current
season and ordered raw materials accordingly. However, the success of the new line turned out
to be a fad as the teens soon turned to other products offered by competing brands and La
Belle's sales declined. This forecasting error caused a huge discrepancy in the amount of raw
materials they needed and the amount of inventory they had already piled up in anticipation of
good sales. This is an example of ________.
A) the multiplier effect
B) hindsight bias
C) product recall
D) the bullwhip effect
E) safety stock planning
Answer: D
AACSB: Analytical thinking
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

4
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10) Which of the following is the main objective of information systems that focuses on
improving supply chains?
A) discouraging vendor-managed inventory systems
B) accelerating product development and innovation
C) discouraging sustainable production processes
D) decentralizing the organizations
E) encouraging the bullwhip effect
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

11) Which of the following is the key use of the distribution planning module of supply chain
management?
A) to ensure that the materials required for production are available when needed
B) to forecast and plan anticipated demand for products
C) to optimize the allocation of available supply to meet demand
D) to support production processes taking into account capacity and material constraints
E) to support receiving, storing, and picking of goods in a warehouse
Answer: C
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

12) The key use of the order promising module of supply chain management is to ________.
A) work with partners across the supply network to improve accuracy of demand forecasts,
reduce inventory buffers, and improve customer service
B) monitor key performance indicators to assess performance across the supply chain
C) manage logistics between company locations or from company to customers, taking into
account transportation modes and constraints
D) assign optimal safety stock and target stock levels in all inventories in the supply network
E) provide answers to customer relationship management queries regarding product
availability, costs, and delivery times
Answer: E
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

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13) The key use of the manufacturing execution module of supply chain management is to
________.
A) forecast and plan anticipated demand for products
B) support production processes, taking into account capacity and material constraints
C) ensure that the materials required for production are available where needed and when
needed
D) assign optimal safety stock and target stock levels in all inventories in the supply network
E) support receiving, storing, and picking of goods in a warehouse
Answer: B
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

14) ________ involves the development of various resource plans to support the efficient and
effective production of goods and services.
A) Requirement planning
B) Supply chain analytics
C) Requirement execution
D) Supply chain networking
E) Supply chain planning
Answer: E
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

15) Supply chain planning begins with ________.

A) product demand planning and forecasting
B) product distribution planning and scheduling
C) production scheduling
D) inventory planning
E) safety stock planning
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

6
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16) Demand planning and estimating leads to the development of the overall ________.
A) sourcing plan
B) demand paging
C) production plan
D) demand forecast
E) safety stock plan
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

17) ________ planning focuses on delivering products or services to consumers as well as

warehousing, delivering, invoicing, and payment collection.
A) Product demand
B) Production
C) Distribution
D) Safety stock
E) Inventory
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

18) Distribution planning leads to the development of the overall ________ plan.
A) production
B) safety stock
C) manufacturing
D) transportation
E) security
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

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Copyright © 2018 Pearson Education, Inc.
19) Production scheduling ________.
A) focuses on the coordination of all activities needed to create the product or service
B) focuses on delivering products or services to consumers as well as warehousing
C) leads to the development of a sourcing plan
D) leads to the development of inventory estimates
E) provides immediate communication and feedback to and from customers
Answer: A
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

20) Analytical tools are used to optimally utilize materials, equipment, and labor during the
________ process of supply chain planning.
A) demand forecasting
B) production scheduling
C) distribution planning
D) inventory planning
E) safety stock scheduling
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

21) Inventory and safety stock planning ________.

A) leads to the development of the overall demand forecast
B) focuses on the coordination of all activities needed to create a product or service
C) leads to the development of a sourcing plan
D) focuses on delivering products or services to consumers as well as warehousing
E) leads to the development of a transportation schedule
Answer: C
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

8
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22) In the context of business-to-business marketplaces, the term ________ refer to the markets
that comprise of firms operating within a certain industry sector.
A) market segmentations
B) share markets
C) market paradigms
D) horizontal markets
E) vertical markets
Answer: E
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

23) Supply chain execution ________.

A) involves the development of a sourcing plan
B) refers to the use of key performance indicators to monitor production
C) involves the management of product flow, information flow, and financial flow
D) refers to the ability to track products as they move through the supply chain
E) involves the development of demand forecast
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

24) Which of the following statements is true about product flow, a key element of supply
chain execution?
A) It refers to the ability of tracking products as they move through the supply chain.
B) It refers to the movement of information along the supply chain, such as order processing
and delivery status updates.
C) It refers to the movement of goods from the supplier to production, from production to
distribution, and from distribution to the consumer.
D) It tracks a one-way flow of products from producers to consumers, but cannot process
returns or customer refunds.
E) It refers primarily to the movement of financial assets throughout the supply chain.
Answer: C
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

9
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25) Which of the following statements is true about information flow, a key element of supply
chain execution?
A) A key element of information flow is to foresee external events.
B) Information can only flow up the supply chain.
C) It refers to the use of key performance indicators to monitor performance of the entire
supply chain.
D) The key element to the information flow is the complete removal of paper documents.
E) It refers primarily to the movement of financial assets throughout the supply chain.
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

26) Which of the following key elements of supply chain execution includes information
related to payment schedules, consignment, and ownership of products and materials?
A) financial flow
B) personnel flow
C) information flow
D) product flow
E) material flow
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

27) The ability to track products as they move through the supply chain and to foresee external
events is a characteristic of ________.
A) supply chain visibility
B) supply chain sustainability
C) supply chain analytics
D) supply network collaboration
E) supply chain risk management
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

10
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28) ________ refers to the use of key performance indicators to monitor performance of the
entire supply chain, including sourcing, planning, production, and distribution.
A) Supply chain integration
B) Supply chain optimization
C) Supply chain strategy
D) Supply chain visibility
E) Supply chain analytics
Answer: E
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

29) ________ is the extent to which a company's supply chain is focusing on minimizing
procurement, production, and transportation costs.
A) Supply chain analytics
B) Supply chain effectiveness
C) Supply network collaboration
D) Supply chain efficiency
E) Supply chain visibility
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

30) ________ is the extent to which a company's supply chain is focusing on maximizing
customer service with lesser focus on procurement, production, and transportation costs.
A) Supply chain visibility
B) Supply chain effectiveness
C) Supply chain analytics
D) Supply chain efficiency
E) Supply network collaboration
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

11
Copyright © 2018 Pearson Education, Inc.
31) Which of the following is an example of supply chain efficiency?
A) Aubrey Express, a consultancy, focuses on providing superior service to its clients.
B) Fyroff, an automobile manufacturing company, has high spare parts availability.
C) Glassico, a soft drink manufacturing company, introduces a new soft drink flavor.
D) Timeplz, a watch manufacturing company, positions itself as a prestige brand.
E) Xenthix, an electronics company, sources its raw materials in ways that keep its costs low.
Answer: E
AACSB: Analytical thinking; Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

32) ________ is a standard for exchanging structured information over the Web.
A) Extensible Markup Language
B) JavaScript
C) MySQL
D) Active Server Pages
E) Unified Modeling Language
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

33) ________ allow(s) designers of Web documents to create their own customized tags,
enabling the definition, transmission, validation, and interpretation of data between applications
and between organizations.
A) MySQL
B) Active Server Pages
C) Extensible Markup Language
D) Perl
E) Unified Modeling Language
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

12
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34) A(n) ________ is a label that is inserted into an XML document in order to specify how the
data contained in the document or a portion of the document should be interpreted and/or used.
A) Extensible Markup Language (XML) tag
B) Extensible Markup Language (XML) query
C) Extensible Markup Language (XML) Unicode
D) Hypertext Markup Language (HTML
E) Hypertext Markup Language (HTML) font
Answer: A
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

35) ________ is an XML-based specification for publishing financial information.

A) Extensible Rights Markup Language
B) Extensible Application Markup Language
C) Extensible Access Control Markup Language
D) Extensible Business Reporting Language
E) Enterprise Mashup Markup Language
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

36) ________ includes tags for data such as annual and quarterly reports, Securities and
Exchange Commission filings, general ledger information, and net revenue and accounting
schedules.
A) Extensible Application Markup Language
B) Extensible Business Reporting Language
C) Extensible Access Control Markup Language
D) Enterprise Mashup Markup Language
E) Extensible Rights Markup Language
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

13
Copyright © 2018 Pearson Education, Inc.
37) Lee's department store uses the every day low prices strategy. This strategy hinges upon the
store's ability to obtain consumer goods at the cheapest possible price and passes these savings
on to consumers. Lee's store also developed its own distribution network for supplying its retail
outlets with consumer goods. This distribution network allowed them to cut out external
suppliers and middlemen thereby driving down business costs further. This implies that the
competitive strategy used by this store would most likely focus on ________.
A) supply chain efficiency
B) supply chain visibility
C) supply chain effectiveness
D) supply chain sustainability
E) supply chain logistics
Answer: A
AACSB: Analytical thinking; Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

38) Comptel, a world leader in computer hardware, differentiates itself from its competitors by
providing excellent after-sales service. This implies that the competitive strategy used by
Comptel would most likely focus on ________.
A) supply chain analytics
B) supply chain visibility
C) supply chain effectiveness
D) supply network collaboration
E) supply chain efficiency
Answer: C
AACSB: Analytical thinking; Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Application

39) ________ is the use of electromagnetic energy to transmit information between a reader
(transceiver) and a processing device.
A) Radio frequency identification
B) High capacity color barcoding
C) Interferometric modulator display
D) Photonic computing
E) Electronic product coding
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

14
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40) ________ are designed to automate the business processes that occur before, during, and
after sales transactions between a supplier and multiple customers.
A) Customer portals
B) Supplier portals
C) B2C portals
D) Marketplace portals
E) Transaction portals
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

41) Which of the following statements is true about supply chain management (SCM)?
A) SCM systems are used to improve business processes that span organizational boundaries.
B) SCM systems cannot automate the supply chain.
C) SCM systems are often integrated with legacy systems.
D) SCM systems are used by mostly smaller organizations.
E) SCM systems are great standalone systems, but cannot be integrated with an ERP system.
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

42) Marketing researchers have found the cost of trying to win back customers who have gone
elsewhere can be up to ________ times as much as keeping a current one satisfied.
A) 2
B) 10-20
C) 25-40
D) 50-100
E) 150-200
Answer: D
AACSB: Reflective thinking
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

15
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43) The flow of materials from suppliers to customers can be described as a supply network.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

44) Electronic Data Interchange (EDI) refers to computer-computer communication without

any human intervention.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

45) Production scheduling leads to the development of a sourcing plan.

Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

46) Just-in-time is a business model in which the suppliers manage the manufacturer's
inventory based on pre-established service levels.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

47) One major problem affecting supply chains are ripple effects referred to as the multiplier
effect.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

16
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48) Supply chain management improves the coordination of suppliers, product or service
production, and distribution.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

49) Supply chain management is primarily used to optimize business processes within the
organization.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

50) The efficiency of a supply chain management (SCM) system is independent of the data
entered into it.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

51) Supply chain execution involves the development of various resource plans to support the
efficient and effective production of goods and services.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

52) Supply chain efficiency is the extent to which a company's supply chain is focusing on
maximizing customer service regardless of procurement, production, and transportation costs.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

17
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53) Supply chain effectiveness is the extent to which a company's supply chain is focusing on
minimizing procurement, production, and transportation costs, sometimes by sacrificing
excellent customer service.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

54) Supply chain management systems allow for making trade-offs between efficiency and
effectiveness for individual components or raw materials.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

55) The only drawback of Extensible Markup Language (XML) is that it is not customizable.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

56) One of the most significant advances in manufacturing has been the use of just-in-time
(JIT) approaches.
Answer: TRUE
AACSB: Reflective thinking
Difficulty: Easy
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

18
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57) Briefly describe the concept of portals in the context of supply chain management.
Answer: Portals, in the context of B2B supply chain management, can be defined as access
points (or front doors) through which a business partner accesses secured, proprietary
information that may be dispersed throughout an organization (typically using extranets). By
allowing direct access to critical information needed to conduct business, portals can thus
provide substantial productivity gains and cost savings for B2B transactions.

Most companies depend on a steady source of key supplies needed to produce their goods or
services. For example, luxury restaurants require their produce to be consistently of high
quality; similarly, car manufacturers need steel, paint, or electronic components in the right
quantities, at the right quality and price, and at the right time. Thus, most companies seek long-
term B2B relationships with a limited number of carefully selected suppliers—rather than one-
time deals—and invest considerable efforts in selecting their suppliers or business partners;
often, suppliers are assessed not only on product features such as price or quality but also on
supplier's characteristics, such as trustworthiness, commitment, or viability. As a result, in
contrast to B2C EC, where anyone can set up a customer account with a retailer, the suppliers
or customers in B2B transactions are typically pre-screened by the business, and access to the
company's extranet will be given depending on the business relationship (typically, after a
review of the supplier's or buyer's application). To support different types of business
relationships, portals come in two basic forms: supplier portals and customer portals. Supplier
portals automate the business processes involved in purchasing or procuring products between
a single buyer and multiple suppliers. On the other end of the spectrum, customer portals
automate the business processes involved in selling or distributing products from a single
supplier to multiple buyers. B2B marketplaces are typically run by separate entities and connect
multiple buyers and multiple suppliers.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

19
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58) Compare and contrast the vendor-managed inventory (VMI) model and the traditional
inventory model. List the benefits of the VMI model.
Answer: Vendor-managed inventory (VMI) is a business model in which the suppliers to a
manufacturer manage the manufacturer's inventory levels based on pre-established service
levels. To make VMI possible, the manufacturer allows the supplier to monitor stock levels and
ongoing sales data. Under a traditional inventory model, the manufacturer or retailer would
manage these inventories themselves, sending out requests for additional items as needed. In
contrast, under a VMI model, the manufacturer or retailer shares real-time sales data with the
suppliers. The suppliers maintain inventory levels based on pre-established agreements. Such
arrangements can help optimize the manufacturer's inventory, both saving costs and minimizing
stockout situations (thus enhancing customer satisfaction); the supplier, in turn, benefits from
the intense data sharing, which helps produce more accurate forecasts, reduces ordering errors,
and helps prioritize the shipment of goods.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

59) Define supply chain planning (SCP) and list the processes that are generally supported by
its modules.
Answer: Supply chain planning (SCP) involves the development of various resource plans to
support the efficient and effective production of goods and services. Four key processes that are
generally supported by SCP modules include:
a. Demand planning and forecasting.
b. Distribution planning.
c. Production scheduling.
d. Inventory and safety stock planning.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

20
Copyright © 2018 Pearson Education, Inc.
60) Briefly describe the information flow element of a supply chain.
Answer: Information flow refers to the movement of information along the supply chain, such
as order processing and delivery status updates. Information can flow up or down the supply
chain as needed. The key element to the information flow is the complete removal of paper
documents. Specifically, all information about orders, fulfillment, billing, and consolidation is
shared electronically. These paperless information flows save not only paperwork, but also time
and money. Additionally, because supply chain management (SCM) systems use a central
database to store information, all supply chain partners have access to most current information
at all times.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

61) Explain the importance of supply chain analytics.

Answer: Supply chain analytics refers to the use of key performance indicators to monitor
performance of the entire supply chain, including sourcing, planning, production, and
distribution. For example, a purchasing manager can identify the suppliers that are frequently
unable to meet promised delivery dates. Being able to access key performance metrics can help
to identify and remove bottlenecks, such as by switching suppliers, spreading orders over
multiple suppliers, expediting shipping for critical goods, and so on.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

21
Copyright © 2018 Pearson Education, Inc.
62) In developing a supply chain strategy, companies have to evaluate the trade-offs between
effectiveness and efficiency in different areas. Name and discuss these different areas.
Answer: When developing an SCM strategy, an organization must consider a variety of factors
that will affect the effectiveness and efficiency of the supply chain. Supply chain effectiveness
is the extent to which a company's supply activities meet the requirements of the external
partners involved. In contrast, supply chain efficiency is the extent to which a company
optimizes the use of resources in its supply chain activities. Focusing on one or the other can
result in excessive costs or in not meeting stakeholders' needs, so companies have to evaluate
the trade-offs in different areas, such as procurement, production, and transportation. In other
words, the design of the supply chain must consider natural trade-offs between a variety of
factors and should match the organization's competitive strategy to offer the greatest benefits.
For example, an organization utilizing a low-cost-provider competitive strategy would likely
focus on supply chain efficiency. In contrast, an organization pursuing a superior customer
service differentiation strategy would focus on supply chain effectiveness.

SCM systems typically allow for making trade-offs between efficiency and effectiveness for
individual components or raw materials. For example, if a hurricane is likely to delay the
arrival of a key component by sea, the company can perform simulations to evaluate the effect
of the delay on production and can assess the feasibility of temporarily switching suppliers,
switching modes of transportation (e.g., expediting the shipment via air freight), or substituting
the component altogether. In such cases, making changes to the original plans may be costlier,
but can help the organization meet promised delivery deadlines, thus maintaining goodwill and
avoiding possible contract penalties. On the other hand, companies can dynamically adjust
schedules for noncritical components or raw materials so as to minimize costs while still
meeting the targets set in the production schedule.
AACSB: Reflective thinking
Difficulty: Moderate
Learning Obj.: 8.1: Describe supply chain management systems and how they help to improve
business-to-business processes.
Classification: Concept

22
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63) Which of the following portrays the improved integration benefit of a customer relationship
management (CRM) system?
A) Integrate all information for all points of contact with the customers–marketing, sales, and
service–so that all who interact with customers have the same view and understanding of
current issues.
B) Improved record keeping and efficient methods of capturing customer complaints help to
identify and solve problems faster.
C) Integrated information removes information handoffs, speeding both sales and support
processes.
D) Information from the CRM can be integrated with other systems to streamline business
processes and gain business intelligence as well as make other cross-functional systems more
efficient and effective.
E) Tracking customer behavior over time helps to identify future opportunities for product and
service offerings.
Answer: D
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

64) Which of the following is a main objective of customer relationship management

applications focusing on downstream information flows?
A) to track global spending on suppliers
B) to encourage the bullwhip effect
C) to develop demand forecasts
D) to portray a positive corporate image
E) to collaborate demand and production planning
Answer: D
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

23
Copyright © 2018 Pearson Education, Inc.
65) Which of the following portrays the individualized service benefit of a customer
relationship management (CRM) system?
A) learning how each customer defines product and service quality so that customized product,
pricing, and services can be designed or developed collaboratively
B) providing product information, sales status, support information, issue tracking, and so on
C) integrating all information for all points of contact with the customers so that all who
interact with customers have the same view and understand current issues
D) providing integrated information which removes information handoffs, thereby speeding
both sales and support processes
E) enabling improved record keeping and efficient methods of capturing customer complaints
that help to identify and solve problems faster
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

66) Which of the following portrays the improved product development benefit of a customer
relationship management (CRM) system?
A) learning how each customer defines product and service quality so that customized product,
pricing, and services can be designed or developed collaboratively
B) providing product information, sales status, support information, issue tracking, and so on
C) providing integrated information that removes information handoffs, thereby speeding both
sales and support processes
D) enabling improved record keeping and efficient methods of capturing customer complaints
that help to identify problems faster
E) tracking customer behavior over time that helps to identify future opportunities for product
and service offerings
Answer: E
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

24
Copyright © 2018 Pearson Education, Inc.
67) Which of the following examples portrays the 24/7/365 operation of a customer
relationship management (CRM) system?
A) Web-based interfaces that provide product information, sales status, support information,
issue tracking, and so on
B) enabling improved record keeping and efficient methods of capturing customer complaints
that help to identify problems faster
C) tracking customer behavior over time that helps to identify future opportunities for product
and service offerings
D) App-based technologies that remove information handoffs, thereby speeding both sales and
support processes
E) learning how each customer defines product and service quality so that customized product,
pricing, and services can be designed or developed collaboratively
Answer: A
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

68) Which of the following examples explains the improved planning benefit of using a
customer relationship management (CRM) system?
A) enabling improved record keeping and efficient methods of capturing customer complaints
that help to identify problems faster
B) learning how each customer defines product and service quality so that customized product,
pricing, and services can be designed or developed collaboratively
C) providing mechanisms for managing and scheduling sales follow-ups to assess satisfaction,
repurchase probabilities, time frames, and frequencies
D) tracking customer behavior over time that helps to identify future opportunities for product
and service offerings
E) providing integrated information that removes information handoffs, thereby speeding both
sales and support processes
Answer: C
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

25
Copyright © 2018 Pearson Education, Inc.
69) ________ customer relationship management (CRM) includes systems used for automating
the fundamental business processes and for interacting with a customer.
A) Operational
B) Integrated
C) Collaborative
D) Reflective
E) Structured
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

70) ________ customer relationship management (CRM) systems help to create mass e-mail
marketing campaigns wherein each consumer receives an individualized e-mail based on their
prior purchase history.
A) Structured
B) Operational
C) Analytical
D) Integrated
E) Collaborative
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

71) Which of the following is a component of an operational customer relationship

management (CRM) system?
A) sales force automation
B) data warehouse
C) enterprise resource planning system
D) data mining and visualization
E) business intelligence
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

26
Copyright © 2018 Pearson Education, Inc.
72) Identify a key technology in analytical customer relationship management (CRM) systems.
A) failure effect and mode analysis
B) probabilistic risk assessment
C) neural networks
D) data mining
E) cognitive science
Answer: D
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

73) ________ is the first component of an operational customer relationship management

system that supports a broad range of business processes, such as tracking and managing
customer history and preferences, account and contact management, and order processing and
tracking.
A) Enterprise marketing management
B) Sales force automation
C) Data warehousing
D) Execution management
E) Customer service and support
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

74) ________ refers to systems that automate requests, complaints, product returns, and
information requests.
A) Data warehouse
B) Enterprise marketing management
C) Customer service and support
D) Execution management
E) Sales force automation
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

27
Copyright © 2018 Pearson Education, Inc.
75) ________ refers to using multiple communication channels to support the communication
preferences of users, such as the Web, the company's Facebook page, industry blogs, telephone,
and so on.
A) Analytics visualization
B) Customer engagement center
C) Enterprise application
D) Execution engine
E) Sales force efficiency
Answer: B
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

76) ________ tools help a company in the execution of the customer relationship management
(CRM) strategy by improving the management of promotional campaigns.
A) Business intelligence
B) Sales force automation
C) Enterprise marketing management
D) Customer interaction center
E) Execution management
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

77) ________ focuses on studying customer behavior and perceptions in order to provide the
business intelligence necessary to identify new opportunities and to provide superior customer
service.
A) Analytical customer relationship management (CRM)
B) Sales force automation
C) Operational customer relationship management (CRM)
D) Collaborative design automation
E) Integrated customer relationship management (CRM)
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

28
Copyright © 2018 Pearson Education, Inc.
78) Organizations that effectively utilize ________ can more easily customize marketing
campaigns from the segment level to even the individual customer.
A) operational customer relationship management (CRM)
B) integrated customer relationship management (CRM)
C) analytical customer relationship management (CRM)
D) collaborative design automation
E) sales force automation
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

79) Identify the factors that help in building models of customer demand in an analytical
customer relationship management (CRM) system.
A) sales forecasting and performance analyses
B) account and contact management
C) price, quality, and satisfaction analysis of competitors
D) customer history and preferences management
E) order processing and tracking
Answer: C
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

80) ________ refers to systems for providing effective and efficient communication with the
customer from the entire organization.
A) Analytical customer relationship management (CRM)
B) Sales force automation
C) Collaborative customer relationship management (CRM)
D) Operational customer relationship management (CRM)
E) Business intelligence
Answer: C
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

29
Copyright © 2018 Pearson Education, Inc.
81) ________ systems facilitate the sharing of information across the various departments of an
organization in order to increase customer satisfaction and loyalty.
A) Collaborative customer relationship management (CRM)
B) Data warehousing
C) Operational customer relationship management (CRM)
D) Analytical customer relationship management (CRM)
E) Data mining
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

82) ________ is the process of identifying and assessing the volume and sentiment of what is
being said about a company, individual, product, or brand.
A) Social media monitoring
B) Visual analytics
C) Digital radiography
D) Digital marketing
E) Social bookmarking
Answer: A
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

83) Customer relationship management systems collect data that can be mined to discover the
next product line extension that consumers covet.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

30
Copyright © 2018 Pearson Education, Inc.
84) Rather than engaging in conversations with their customers, organizations need to start
seeing customers as an audience.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

85) Customer relationship management applications are commonly integrated with a

comprehensive enterprise resource planning implementation to leverage internal and external
information to better serve customers.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

86) Customer relationship management allows organizations to focus on driving revenue as

well as on reducing costs, as opposed to emphasizing only cost cutting.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

87) Operational customer relationship management system refers to the systems used for
providing effective and efficient communication with the customer from the entire
organization.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

31
Copyright © 2018 Pearson Education, Inc.
88) In an operational customer relationship management (CRM), marketing, sales, and support
personnel see only current interactions with the customer depending on where it occurred
within the organization.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

89) Customer service and support, the second component of an operational customer
relationship management (CRM), refers to systems that support the day-to-day sales activities
of an organization.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

90) Sales force automation improves the effectiveness of the marketing function by providing
an improved understanding of market conditions, competitors, and products.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

91) Using enterprise marketing management (EMM) tools can help integrate various
promotional campaigns such that the right messages are sent to the right people through the
right channels.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

32
Copyright © 2018 Pearson Education, Inc.
92) Analytical customer relationship management (CRM) analyzes customer behavior and thus
provides the business intelligence necessary to identify new opportunities and to provide
superior customer service.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

93) Key technologies within collaborative customer relationship management (CRM) systems
include data mining, decision support, and other business intelligence technologies that attempt
to create predictive models of various customer attributes.
Answer: FALSE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

94) Social media applications enable customers to quickly share both positive and negative
information.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

95) A collaborative customer relationship management system supports customer

communication and collaboration with the entire organization, thus providing more streamlined
customer service with fewer handoffs.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

33
Copyright © 2018 Pearson Education, Inc.
96) Collaborative customer relationship management enhances communication by
understanding customer history and current needs.
Answer: TRUE
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

97) List some of the enterprise-wide changes a successful customer relationship management
(CRM) strategy must include.
Answer: Some of the enterprise-wide changes a successful CRM strategy must include are:
a. Policies and business processes: Organizational policies and procedures need to reflect a
customer-focused culture.
b. Customer service: Key metrics for managing the business need to reflect customer-focused
measures for quality and satisfaction as well as process changes to enhance the customer
experience.
c. Employee training: Employees from all areas—marketing, sales, and support—must have a
consistent focus that values customer service and satisfaction.
d. Data collection, analysis, and sharing: All aspects of the customer experience—such as
prospecting, sales, support, and so on—must be tracked, analyzed, and shared to optimize the
benefits of the CRM.
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

98) Define the three primary components of a comprehensive customer relationship

management (CRM) system.
Answer: A comprehensive CRM system comprises three primary components:
a. Operational CRM—includes systems for automating the fundamental business processes like
marketing, sales, and support for interacting with the customer.
b. Analytical CRM—includes systems for analyzing customer behavior and perceptions (e.g.,
quality, price, and overall satisfaction) in order to provide business intelligence.
c. Collaborative CRM—includes systems for providing effective and efficient communication
with the customer from the entire organization.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

34
Copyright © 2018 Pearson Education, Inc.
Test Bank for Information Systems Today, 8th Edition, Joseph Valacich

99) Briefly describe analytical customer relationship management (CRM) systems.

Answer: Analytical CRM focuses on analyzing customer behavior and perceptions in order to
provide the business intelligence necessary to identify new opportunities and to provide
superior customer service. Organizations that effectively utilize analytical CRM can more
easily customize marketing campaigns from the segment level to even the individual customer.
Such customized campaigns help to increase cross- or up-selling (i.e., selling more profitable
products or identifying popular bundles of products and services tailored to different market
segments) as well as retain customers by having accurate, timely, and personalized information.
Analytical CRM systems also are used to spot sales trends by ZIP code, state, and region as
well as specific target markets within those areas. Key technologies within analytical CRM
systems include data mining, decision support, and other business intelligence technologies that
attempt to create predictive models of various customer attributes.
AACSB: Information technology
Difficulty: Moderate
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

100) List the ways in which collaborative customer relationship management (CRM) enhances
communication.
Answer: Collaborative CRM enhances communication in the following ways:
a. Greater customer focus—Understanding customer history and current needs helps to focus
the communication on issues important to the customer.
b. Lower communication barriers—Customers are more likely to communicate with the
organization when personnel have complete information and when they utilize the
communication methods and preferences of the customer.
c. Increased information integration—All information about the customer as well as all prior
and ongoing communication is given to all organizational personnel interacting with the
customer; customers can get status updates from any organizational touch point.
AACSB: Information technology
Difficulty: Easy
Learning Obj.: 8.2: Describe customer relationship management systems and how they help to
improve the activities involved in promoting and selling products to customers as well as
providing customer service and nourishing long-term relationships.
Classification: Concept

35
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