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Test Bank For Concepts In Enterprise Resource Planning, 4th Edition

Test Bank For Concepts In Enterprise Resource Planning, 4th Edition provides a strong foundation in exam topics with a balance of theoretical knowledge and practical application.

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    Chapter 1: Business Functions and Business Processes TRUE/FALSE 1. One of the four functional areas of operation is Human Resources (HR). ANS: T PTS: 1 REF: 2 2. Historically, businesses have had organizational structures that separated the functional areas, but business schools have not been organized like that. ANS: F PTS: 1 REF: 3 3. Information systems that are designed so functional areas share data are called integrated information systems. ANS: T PTS: 1 REF: 4 4. Sales forecasts are historical records of sales. ANS: F PTS: 1 REF: 7 5. The business process of Cash Flow Management is handled under the Accounting and Finance functional area of operation. ANS: T PTS: 1 REF: 2 | 7 6. The functional area of Supply Chain Management (SCM) sets prices. ANS: F PTS: 1 REF: 7 | 9 7. When manufacturing runs out of raw materials, it’s known as a stockout. ANS: T PTS: 1 REF: 11 8. To avoid stockouts, manufacturers might carry extra raw materials. This excess is known as safety stock. ANS: T PTS: 1 REF: 11 9. Accounts receivable are recorded by the Human Resources department (HR). ANS: F PTS: 1 REF: 12 10. The business function of government compliance falls under the Supply Chain Management functional area of operation. ANS: F PTS: 1 REF: 2 | 14 MULTIPLE CHOICE 1. Which of the following is a functional area of operation?

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    a. Packaging c. Shipping b. Supply Chain Management d. Baking ANS: B PTS: 1 REF: 2 2. Which business function is performed by Accounting and Finance? a. Cost allocation and control c. Benefits b. Taking sales orders d. Plant maintenance ANS: A PTS: 1 REF: 2 3. What are the computers, people, procedures, and software that store, organize, and deliver information in an organization? a. The CPU c. Information systems b. The Process System d. Personnel systems ANS: C PTS: 1 REF: 3 4. Today’ s managers are beginning to think in terms of business process. A business process cuts across which functional areas of operation? a. Marketing and Sales d. Human Resources b. Supply Chain Management e. All of the above c. Accounting and Finance ANS: E PTS: 1 REF: 3 5. Information systems that can be designed so that functional areas of operation share data are called: a. integrated information systems c. non - middleware information systems b. complete information systems d. linked information systems ANS: A PTS: 1 REF: 4 6. Estimates of future product demand, which are the amount of a product that customers will want to buy, are called: a. sales forecasts c. sales diving b. sales divining d. sales deriving ANS: A PTS: 1 REF: 7 7. Which of the following is an input to the Marketing and Sales functional area? a. Production plans c. Per - unit cost b. Raw material orders d. Accounts payable data ANS: C PTS: 1 REF: 10 8. When purchasing a computer, the functional area responsible for handling the financial help for purchasing that computer is: a. Marketing and Sales c. Supply Chain Management b. Accounting and Finance d. Human Resources ANS: B PTS: 1 REF: 3 9. Successful business managers view their business operations from the perspective of a(n): a. satisfied customer c. profitable sale b. positive cash flow d. accurate sales forecast ANS: A PTS: 1 REF: 4

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    10. When manufacturing runs out of raw material, it is known as a(n): a. shortfall c. depletion b. empty shelf d. stockout ANS: D PTS: 1 REF: 11 11. ____ can result in management overinvesting in inventory. a. Bulging raw materials c. Safety stock b. Stockup d. Excess baggage ANS: C PTS: 1 REF: 11 12. Which of the following outputs would emerge from the Accounting and Finance functional area? a. Packaging orders c. Regulation compliance b. Sales strategy d. Financial reports ANS: D PTS: 1 REF: 13 13. Which of the following is an input to HR? a. Personnel forecasts c. Layoff and recall company policy b. Sales data d. Travel expense company policy ANS: A PTS: 1 REF: 14 COMPLETION 1. ____________________ programs are core software used by companies to coordinate information in every area of the business. ANS: Enterprise Resource Planning ERP Enterprise Resource Planning (ERP) ERP (Enterprise Resource Planning) PTS: 1 REF: 1 2. A collection of activities that takes one or more kinds of input and creates an output that is of value to the customer is called a(n) ____________________. ANS: business process PTS: 1 REF: 1 3. The business functions of financial accounting, cost allocation and control, planning and budgeting, and cash - flow management take place in the ____________________ functional area of operation. ANS: Accounting and Finance A/F Accounting and Finance (A/F) A/F (Accouting and Finance)

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    PTS: 1 REF: 2 4. One example of the business function that happens in the human resource area of operation would be ____________________. ANS: Recruiting and hiring Training Payroll Benefits Government compliance PTS: 1 REF: 2 5. A(n) ____________________ includes the computers, people, procedures, and software that store, organize, and deliver information. ANS: information system IS information system (IS) IS (information system) PTS: 1 REF: 3 6. Information systems designed so that functional areas share data are called ____________________. ANS: integrated information systems integrated IS integrated information systems (IIS) IIS PTS: 1 REF: 4 7. A shortfall of raw materials is known as a(n) ____________________. ANS: stockout PTS: 1 REF: 11 8. To avoid stockouts, manufacturers might carry extra raw materials known as ____________________. ANS: safety stock PTS: 1 REF: 11 SHORT ANSWER 1. Describe the difference between functional areas of operation and business processes. Give an example of a business process. ANS:

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    Most companies have four main functional areas of operation. Each area comprises a variety of narrower business functions, which are activities specific to that functional area of operation. Recall that a business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. Thinking in terms of business processes helps managers to look at their organization from the customer’s perspective. For example, suppose that a customer wants to purchase a new computer. PTS: 1 REF: 2 - 3 2. What are integrated information systems? ANS: Sharing data effectively and efficiently between and within functional areas leads to more efficient business processes. Information systems can be designed so that functional areas share data. These systems are called integrated information systems. PTS: 1 REF: 4 3. Give some examples of Marketing and Sales in a small business such as a coffee shop or some other simple example. ANS: For the most part, this is a cash business and does not require formal record keeping, but you still need to keep track of your customers so that you can send flyers to repeat customers or send occasional thank you notes. Thus, your records must show not only the amount of sales, but also must identify repeat customers. Product development can be done informally in such a simple business; you gather information about who buys which kind of lemonade and note what customers say about each product. You also analyze historical sales records to spot trends that are not obvious. PTS: 1 REF: 6 - 7 4. Choose an example company and give situations for each business process in the accompanying figure. Depending on your major or interest, choose one functional area of operation.

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    Figure 1 - 1 Examples of functional areas of operation and their business functions ANS: Depending on the company chosen, and the major, answers will vary. For example, if a student is interested in HR in an engineering firm, they might discuss the process for recruiting and hiring a graduating senior from their university. Then they could describe some training courses the new engineer would take. Payroll and benefits to the new employee should be discussed. Finally, government compliance such as the equal opportunity act could also be mentioned. PTS: 1 REF: 2 5. What departments are involved in the business process of selling a new smartphone? ANS: Refer to the accompanying figure for answers: Figure 1 - 2 Sample business processes related to the sale of a smartphone

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    PTS: 1 REF: 3 6. Describe the material order process in the accompanying figure: Figure 1 - 3 A process view of business operations ANS: When production is alerted to a new order, if raw materials are needed for this order, then production prompts purchasing to arrange for the purchase and delivery of raw materials. Accounting must pay for those raw materials. They are delivered to the Logistics function and then sent to production to make the order. PTS: 1 REF: 5

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    Chapter 2: The Development of Enterprise Resource Planning Systems TRUE/FALSE 1. Individual information systems for each functional area in a company are known as silos. ANS: T PTS: 1 REF: 20 2. Silos of information are also known as stovepipes. ANS: T PTS: 1 REF: 20 3. The complex hardware and software that goes into an ERP system was not available until the 1970s. ANS: F PTS: 1 REF: 21 4. The capabilities of computer hardware doubling every 18 months is known as Gates’ Law. ANS: F PTS: 1 REF: 21 5. Scalability means that the capacity of a piece of equipment can be increased by adding new hardware. ANS: T PTS: 1 REF: 22 6. The software that holds data in an organized fashion is known as a database management system, or a DBMS. ANS: T PTS: 1 REF: 22 7. Materials requirements prediction (MRP) software allows a plant manager to plan production and raw materials requirements by guess - timation. ANS: F PTS: 1 REF: 23 8. The direct computer - to - computer exchange of standard business documents is known as EDI, or electronic data interchange. ANS: T PTS: 1 REF: 23 9. The functi onal model of business and management was useful for decades and is still the current school of thought. ANS: F PTS: 1 REF: 24 10. SAP expanded into international markets but kept the software in a single language, German, and a single currency, the Euro. ANS: F PTS: 1 REF: 26 11. SAP’s R/3 can only run on mainframe computers. ANS: F PTS: 1 REF: 27

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    12. SAP’s goal was to develop a standard software product that could be configured to meet the needs of each company. ANS: T PTS: 1 REF: 26 13. Old systems are known as legacy systems. ANS: T PTS: 1 REF: 27 14. Open architecture encourages software companies are encouraged to develop add - on software products that can be integrated with existing software, such as SAP’s R/3. ANS: T PTS: 1 REF: 27 15. In the accompanying figure, data is entered into the system once and then used throughout the organization. Figure 2 - 4 Data flow within an integrated information system ANS: T PTS: 1 REF: 29 16. An ERP system allows data to be entered once, and then used throughout the organization. ANS: T PTS: 1 REF: 29 17. An ERP module is a module that automates a specific business function. ANS: F PTS: 1 REF: 31 18. A company’s level of data integration is highest when the company uses one vendor to supply all of its ERP modules.

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    ANS: T PTS: 1 REF: 31 19. An important consideration in minimizing the risk of fraud and abuse is defining limits on the dollar value of business transactions that certain employees can process. ANS: T PTS: 1 REF: 32 20. A best practice is the best, most efficient way of handling a certain business process. ANS: T PTS: 1 REF: 34 21. One benefit of ERP systems is that ERP integrates people and data while eliminating the need to update and repair many separate computer systems. ANS: T PTS: 1 REF: 36 22. A large company will likely spent $1 million on ERP implementation, which includes software and training. ANS: F PTS: 1 REF: 37 23. Not every company is a good match with the constraints inherent in ERP. ANS: T PTS: 1 REF: 37 24. SAP’s internal programming language is Visual Basic. ANS: F PTS: 1 REF: 38 25. A return on investment (ROI) is an assessment of an investment project’s value, calculated by dividing the value of the project’s benefits by the project’s cost. ANS: T PTS: 1 REF: 39 MULTIPLE CHOICE 1. Individual information systems for each functional area in a company are known as: a. silos c. tubers b. bagpipes d. separated systems ANS: A PTS: 1 REF: 20 2. The complex software and hardware required for ERP systems was not available until the a. 1960s c. 1980s b. 1970s d. 1990s ANS: D PTS: 1 REF: 21 3. The observation that the number of transistors built onto a computer chip doubles every 18 months is known as: a. Moore’s Law c. Doubletake b. Gate’s Prophesy d. Acceleration ANS: A PTS: 1 REF: 21

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    4. When a piece of equipment’ s capacity is exceeded, its capacity can be increased by adding new hardware. This is commonly known as: a. adaptability c. scalability b. middleware d. computability ANS: C PTS: 1 REF: 22 5. In the 1980s, ____, the technology that holds data in an organized fashion, existed for ERP development. a. spreadsheets c. client/server architecture b. DBMS d. word - processors ANS: B PTS: 1 REF: 22 6. ____ software allows a plant manager to plan production and raw materials requirements by working backward from the sales forecast. a. DBMS c. MRP b. EDI d. EFT ANS: C PTS: 1 REF: 23 7. The direct computer - to - computer exchange of standard business documents is known as: a. MRP c. EDI b. e - mail d. DDS ANS: C PTS: 1 REF: 23 8. In a process - oriented company, the flow of information and management activity is ______, in line with the flow of materials and products. a. horizontal across functions b. vertical from top level management down through the hierarchical management structure c. vertical through functions d. horizontal from marketing and sales to inventory and production ANS: A PTS: 1 REF: 24 9. Software ____ are individual programs that can be purchased, installed, and run separately, but extract data from the common database. a. nodes c. modules b. chunks d. tidbits ANS: C PTS: 1 REF: 26 10. In ______ , third - party software companies are encouraged to develop add - on software products that can be integrated with existing software. a. open architecture c. integrated pieces b. clip - ons d. piecemeal nodes ANS: A PTS: 1 REF: 27 11. ____ is SAP’s biggest competitor. a. J.D. Edwards c. Microsoft b. PeopleSoft d. Oracle ANS: D PTS: 1 REF: 28

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    12. Old information and computer systems are known as ______. a. dinosaurs c. legacy systems b. passe systems d. relics ANS: C PTS: 1 REF: 27 13. Which ERP package is a popular software choice for managing human resources and financial activities at universities? a. SAP c. Microsoft Dynamics b. PeopleSoft d. J.D. Edwards ANS: B PTS: 1 REF: 27 - 28 14. Which R/3 module records sales orders? a. SD c. PP b. MM d. QM ANS: A PTS: 1 REF: 29 15. Which of the following modules in SAP ERP maintains production information? a. SD c. PP b. MM d. QM ANS: C PTS: 1 REF: 29 16. The ______ module helps the company manage fixed - asset purchases (plant and machinery) and related depreciation. a. Plant Maintenance c. Materials Management b. Asset Management d. Product Planning ANS: B PTS: 1 REF: 30 17. Which of the following module in SAP is a set of tools that can automate the activities in SAP ERP? a. Workflow c. Financial Accounting b. Controlling d. Project System ANS: A PTS: 1 REF: 31 18. When top management is queried on the reasons for implementing ERP systems, the overriding answer is ____ . a. cost saving c. increased profitability b. control d. inventory management ANS: B PTS: 1 REF: 31 19. Which R/3 module records transactions in the general ledger? a. CO c. FI b. WF d. PS ANS: C PTS: 1 REF: 31 20. After a company chooses the modules they want to implement, they must decide on ____ options, which allow the customer to customize the modules to fit their business to some extent. a. settings c. flexible b. configuration d. tandem

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    ANS: B PTS: 1 REF: 32 21. As part of the ______ process, a company can define any number of tolerance groups with a range of limits, and can then assign employees to these tolerance groups. Figure 2 - 6 A customization example: tolerance groups to set transaction limits a. manufacturing c. configuration b. development d. programming ANS: C PTS: 1 REF: 32 22. Which of the following is a benefit to running an ERP system? a. Global integration b. Elimination of updating and repairing multiple systems c. Capability to manage operations, not just monitor them d. All of the above are benefits ANS: D PTS: 1 REF: 36 23. An ERP system for a large company will cost ____, including software, training, and implementation. a. $100 - 500 million c. $1 - 5 billion b. $1 - 5 million d. $50,000 - $500,000 ANS: A PTS: 1 REF: 37 24. SAP’s internal programming language is called: a. R/3 c. Visual Basic b. C++ d. ABAP ANS: D PTS: 1 REF: 38 25. One assessment of a project’s value is calculated by the: a. DVT c. ROI b. PMT d. PPT ANS: C PTS: 1 REF: 39 26. Bumpy rollouts of ERP systems are usually caused by:

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    a. software problems c. hardware problems b. people problems d. configuration problems ANS: B PTS: 1 REF: 40 COMPLETION 1. ____________________ states that the number of transistors on a computer chip doubles every 24 months. ANS: Moore’s Law PTS: 1 REF: 21 2. A central - local computer arrangement is called ____________________ architecture. ANS: client server client/server client - server PTS: 1 REF: 22 3. ____________________ means that the capacity of a piece of equipment can be increased by adding new hardware. ANS: Scalable Scalability PTS: 1 REF: 22 4. The software that holds that data in an organized fashion, and that allows for the easy retrieval of data, is the ____________________. ANS: database management system DBMS database management system (DBMS) DBMS (database management system) PTS: 1 REF: 22 5. ____________________ software allows a plant manager to plan production and raw materials requirements by working backward from the sales forecast. ANS: MRP material requirements planning material requirements planning (MRP) MRP (material requirements planning) PTS: 1 REF: 23

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    6. The prediction of future sales is the ____________________. ANS: sales forecast PTS: 1 REF: 23 7. ____________________ is the direct computer - to - computer exchange of standard business documents. ANS: Electronic data interchange EDI Electronic data interchange (EDI) EDI (electronic data interchange) PTS: 1 REF: 23 8. Originially, in English, SAP was an acronym for ____________________. ANS: Systems Analysis and Program Development PTS: 1 REF: 25 9. In ____________________, third - party software companies are encouraged to develop add - on software products that can be integrated with existing software. ANS: open architecture PTS: 1 REF: 27 10. Old systems are known as ____________________. ANS: legacy systems PTS: 1 REF: 27 11. SAP’ s biggest competitor is ____________________. ANS: Oracle PTS: 1 REF: 28 12. The ____________________ records sales orders and scheduled deliveries. Information about the customer (pricing, address and shipping instructions, billing details, and so on) is maintained and accessed from this module. ANS: Sales and Distribution SD Sales and Distribution (SD) SD (Sales and Distribution) PTS: 1 REF: 29

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