Information Systems in Business: Multiple Choice: 1

CHAPTER 12:
INFORMATION SYSTEMS IN BUSINESS
Multiple Choice:
1.
What company did Andy Grove co-found?

A. IBM
B. Intel
C. Microsoft
D. Hewlett-Packard
Answer: B
2.
Reference: Andy Grove, the Paranoid Chip Merchant
Difficulty: Moderate
A computer system performs all of the following functions EXCEPT:

A. output.
B. input.
C. storage.
D. processing.
Answer: C
3.
Reference: Anatomy of a System
An example of a subsystem of a local area network (LAN) could be:

A. the Internet.
B. a PC.
C. a file to upload.
D. a mainframe computer.
Answer: B
Copyright 2006 Prentice-Hall. All rights reserved.
Chapter 12: Information Systems In Business

4.
A LAN could be a subsystem of:

A. the Internet.
B. a PC.
C. a printer.
D. a server on the LAN.
Answer: A
5.
The output of one subsystem is often the ____________ to another subsystem.

A. input
B. information system
C. storage
D. memory
Answer: A
6.
___________ activities support a businesss primary activities.

A. Outsourced
B. Efficiency
C. Core
D. Secondary
Answer: D
7.
Reference: The Value Chain Model
The ___________ of a business collects data and processes it into necessary information.
A. materials processors
B. management
C. production staff
D. information system
Answer: D
Reference: Business Organizations as Systems
Difficulty: Easy

8.
A companys environment consists of all EXCEPT:

A. competitors.
B. employees.
C. customers.
D. stockholders.
Answer: B
9.
A subsystem that supports the information needs of other business processes within an organization is
known as a(n):
A. information system.
B. expert system.
C. technology management system.
D. technology information department.
Answer: A
10.
Reference: Information Systems
An example of input of an information system would be a:

A. printer.
B. report.
C. customer name for data entry.
D. plotter.
Answer: C
11.
Difficulty: Easy
An example of output of an information system would be a:

A. printer.
B. report.
C. PC tablet.
D. plotter.
Answer: B
Difficulty: Easy

12.
An accounting and record-keeping system that keeps track of daily transactions necessary to operate a
business is known as a(n):
A. information system.
B. subset of sound business practices.
C. transaction processing system.
D. technology information department.
Answer: C
13.
Reference: Information Systems for Business Transactions
The first step in the transaction processing cycle is:

A. data processing.
B. document and report preparation.
C. data entry.
D. user inquiry.
Answer: C
14.
EDI stands for:

A. electronic data interchange.
B. electrical data interchange.
C. electronic data on the Internet.
D. electron data interchangeably.
Answer: A
15.
What is the process of gathering data and then processing it at a later time?
A. Real-time processing
B. Later entry data processing
C. Batch processing
D. Entry specific processing
Answer: C

16.
Scanning and identifying library books with a scanning device upon checkout is an example of:
A. processing.
B. acquisition.
C. storage and retrieval.
D. transmission.
Answer: C
17.
Reference: Information Technology in Information Systems
Difficulty: Challenging
What type of information technology function is the creation of a monthly sales report shown in an
understandable chart and an easy-to-read spreadsheet format developed for a sales manager?
A. processing
B. presentation
C. acquisition
D. storage and retrieval
Answer: B
18.
Manipulating and organizing information in a way that makes it useful for a user is the information
technology function of:
A. presentation.
B. storage and retrieval.
C. processing.
D. acquisition.
Answer: C
19.
An instructor distributes accumulated and processed data about a group of students to another instructor;
this is an example of the information technology function of:
A. transmission.
B. storage and retrieval.
C. processing.
D. acquisition.
Answer: A

20.
An enterprise resource planning (ERP) system increases the:

A. quality of the data of a transaction subsystem.
B. degree of error discovery of a transaction subsystem.
C. speed of a companys entire transaction processing cycle.
D. amount of paperwork generated by a business.
Answer: C
21.
Reference: Enterprise Resource Planning
Which of the following does NOT typically describe the attributes of an ERP system?
A. Simplistic
B. Complex
C. Large
D. Expensive
Answer: A
22.
The sale of a dress in a womens boutique and the result that one less item is now in stock would be
recorded in a(n) ____________ processing system.
A. accounts receivable transaction
B. information
C. accounts payable transaction
D. inventory control transaction
Answer: D
Reference: How it Works: 12.1 The Information Flow Through a Transaction Processing System
23.
A business income and expenses are organized in reports so that the health of the company can be
determined; this information is recorded in a(n):
A. general ledger transaction processing system.
B. accounts payable transaction processing system.
C. inventory control transaction processing system.
D. payroll transaction processing system.
Answer: A
Reference: How it Works: 12.1 The Information Flow Through a Transaction Processing System

24.
When two different businesses coordinate and form an agreement to work together, it is known as a:
A. strategic plan.
B. business alliance.
C. business cooperative.
D. corporation.
Answer: B
25.
Reference: Supply Chain Management and Outsourcing
An information system that supports international business activities is called a(n):

A. international information system.
B. global business system.
C. globally-linked business system.
D. Internet supplier system.
Answer: A
26.
When an instructor creates a new computer course to be added to the other computer courses offered by the
department and must determine the number of textbooks to order, she is making a(n):
A. structured decision.
B. unstructured decision.
C. semistructured decision.
D. management level decision.
Answer: C
27.
Reference: Information Technology and Management
Middle managers primarily manage at the __________ level.

A. tactical
B. operational
C. top management
D. strategic
Answer: A

28.
Individuals that are part of a board of directors of a company act at the __________ level.
A. tactical
B. operational
C. middle management
D. strategic
Answer: D
29.
MIS stands for:

A. management Internet system.
B. marketing Internet system.
C. marketing and implementation software.
D. management information system.
Answer: D
30.
Reference: Management Information Systems
If you were in the forest searching for your way back to a road, you might take advantage of a(n):
A. GIS.
B. MIS.
C. EDI.
D. DSS.
Answer: A
31.
Reference: Decision Support Systems
Difficulty: Easy
Top managers may use a(n) ____________, a combination of a MIS and a DSS, to support their decision
making.
A. GIS.
B. EIS.
C. EDI.
D. CAM.
Answer: B
Reference: Expert Systems

32.
When a system is designed based on the knowledge of a recognized professional in a particular field, it is
known as a(n):
A. executive information system (EIS).
B. knowledge system (KS).
C. expert system (ES).
D. management information system (MIS).
Answer: C
33.
When a company develops a new product that competitors find extremely difficult to match or improve
upon, the original company has created a:
A. competitive advantage.
B. switching cost mechanism.
C. barrier to entry.
D. high efficiency quota.
Answer: C
34.
Reference: Strategic Information Systems
Too many reports! Too many printouts! Too many particular details! This is known as:
A. Internet information system.
B. system overload.
C. information overload.
D. information surplus.
Answer: C
35.
Reference: Information Systems in Perspective
To economically determine if an information system project is worthwhile for a company to undertake,

managers may use:
A. Gantt charts.
B. program evaluation and review technique (PERT) charts.
C. cost-benefit analysis.
D. expert systems.
Answer: C
Reference: Allocating Resources

36.
The first step of IT planning is called:

A. MIS planning.
B. infrastructure planning.
C. organizational information requirements planning.
D. strategic planning.
Answer: D
37.
Reference: Strategic Planning
Types of charts or diagrams that are used by managers to identify problems in a project include all of the
following EXCEPT:
A. Gantt.
B. program evaluation and review technique (PERT).
C. critical path method (CPM).
D. electronic data interchange (EDI).
Answer: D
38.
Reference: Project Planning
Social responsibility applies to:

A. individuals and companies.
B. companies
C. the community.
D. customers.
Answer: A
39.
Reference: Social Responsibility in the Information Age
To guide behavior of employees in a socially responsible manner, many companies have created:
A. codes of ethics.
B. management rules.
C. insider trading restrictions.
D. code of conduct.
Answer: A
10

Fill in the Blank:
40.
A system performs three basic functions: input, processing, and ____________.
Answer: output
41.
Difficulty: Easy
Reference:
Information
Systems
for
Business
Transactions
Processing transactions as they occur is known as ____________.
Answer: real-time processing

48.
The information technology process that accumulates information for later use and then accesses it when
needed is known as ____________.
Answer: storage and retrieval

47.
In the context of business information systems, information technology performs five functions:
acquisition, ____________, storage, presentation, and transmission.
Answer: processing
46.
A(n) ____________ system in a business is intended to help individuals gather and use information,
communicate with others inside and outside the organization, and make effective decisions.
Answer: information
45.
A business ____________ department recruits, hires, trains, and develops the individuals within the firm.
Answer: Human Resources

44.
The external environment that a business operates in includes customers, stockholders, competitors,
suppliers, banks, and ____________ agencies (which often regulate the business).
Answer: government
43.
Difficulty: Easy
Two additional functions of a system are ____________ and control.
Answer: feedback
42.
Reference: Information Technology for Business Transactions
An example of a typical ____________ activity is the process of running the monthly payroll for
employees.
Answer: batch processing

Reference: Information Technology for Business Transactions
11

49.
ERP stands for ____________.
Answer: enterprise resource planning

50.
Reference: How it Works: 12.1 The Information Flow Through a Transaction

A(n) ____________ transaction processing system involves keeping track of employee work hours and
producing paychecks.
Answer: payroll
Processing System
52.
Reference: How it Works: 12.1 The Information Flow Through a Transaction

____________ is the direct, computer-to-computer exchange of standard business transaction documents; it

is based on international standards.
Answer: EDI or Electronic data interchange

53.
DSS stands for ____________.
Answer: decision support system

59.
A manager at the ____________ level deals with supervising the day-in-day-out activities of a business.
Answer: operational
58.
Three typical management levels exist: operational, tactical, and ____________.
Answer: strategic
57.
When a unique situation arises that a manager must deal with, she is faced with a(n) ____________
decision.
Answer: unstructured
56.
Reference: Supply Chain Management and Outsourcing Difficulty: Challenging
When a bookstore needs to reorder textbooks for a class that is taught every semester by the same
professor, the manager will most likely make a(n) ____________ decision.
Answer: structured
55.
A bookstore working closely with FedEx to handle the stores delivery logistics is an example of a(n)
____________.
Answer: business alliance

54.
A(n) ____________ transaction processing system involves keeping records of amounts owed by
customers.
Answer: accounts receivable

Processing System
51.
GDSS stands for ____________.
Answer: group decision support system
12

60.
GIS stands for ____________.
Answer: geographic information system

61.
Reference: Information Systems in Perspective
Three time estimatesoptimistic, pessimistic, and most likelyare incorporated into a(n) ____________
diagram.
Answer: PERT
69.
CPM, or ____________, keeps track of a projects schedule.
Answer: critical path method

68.
Reference: Allocating Resources
A(n) ____________ visually represents a project schedule.
Answer: Gantt chart

67.
Reference: Describing the Information Technology Infrastructure
The third phase of information technology planning, ____________, is the process of selecting the
information system projects in which to invest time and money.
Answer: resource allocation

66.
A companys information systems hardware, software, and telecommunications equipment; its staff and
personnel; and its organizational structure are known as the IT ____________.
Answer: infrastructure
65.
When an organization defines its mission; clearly identifies its environment, strengths, and weaknesses; and
defines its competitive strategy, it is implementing the first phase of IT planning, called ____________.
Answer: strategic planning Reference: Strategic Planning

64.
Creating a system that replicates the knowledge of a professional in the automotive industry and using the
system to train new members of an organization is an example of a(n) ____________.
Answer: ES or expert system

63.
Managers can use a(n) ____________ information system to monitor crucial economic and social trends
affecting their organization.
Answer: executive
62.
The traditional stakeholders of any business include the employees, suppliers, customers, local community,
and ____________.
Answer: stockholders
13

Matching:
70.
Match the following transaction processing systems to their definitions:

I.
sales transaction
II. inventory control
B. employee hours and paycheck printing
III. accounts receivable
C. how many of an item are in stock
IV. accounts payable
D. overall income and expenses
V. purchasing
E. what customers owe
VI. general ledger
F. new stock from vendors
VII. payroll
G. record of items or services sold
Answers: G, C, E, A, F, D, B
71.
A. print a check for a vendor
Reference: How it Works
Put the following transaction processing steps in order:

I.
storing and updating data
A. first
II. processing the data
B. second
III. user inquiry
C. third
IV. data entry
D. fourth
V. document preparation
E. fifth
Answers: C, B, E, A, D
Reference: IS for Business Transactions
14

72.
Match the decisions and management levels to their definitions and responsibilities:
I.
structured decision
A. short-term plans for the next year or so
II. semistructured decision
B. unique, unknown circumstances
III. unstructured decision
C. day-to-day activities
IV. operational level
D. some uncertainty, some clarity
V. tactical level
E. clearly understandable, established procedures
VI. strategic level
F. long-range, major impact decisions
Answers: E, D, B, C, A, F
Reference: IT and Management
15

Information Systems in Business: Multiple Choice: 1

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CHAPTER 12:

INFORMATION SYSTEMS IN BUSINESS

What company did Andy Grove co-found?

Reference: Andy Grove, the Paranoid Chip Merchant

A computer system performs all of the following functions EXCEPT:

Reference: Anatomy of a System

An example of a subsystem of a local area network (LAN) could be:

Reference: Anatomy of a System

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

A LAN could be a subsystem of:

Reference: Anatomy of a System

The output of one subsystem is often the ____________ to another subsystem.

Reference: Anatomy of a System

___________ activities support a businesss primary activities.

Reference: The Value Chain Model

Reference: Business Organizations as Systems

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

A companys environment consists of all EXCEPT:

Reference: Business Organizations as Systems

Reference: Information Systems

An example of input of an information system would be a:

Reference: Information Systems

An example of output of an information system would be a:

Reference: Information Systems

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

Reference: Information Systems for Business Transactions

The first step in the transaction processing cycle is:

Reference: Information Systems for Business Transactions

EDI stands for:

Reference: Information Systems for Business Transactions

Reference: Information Systems for Business Transactions

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

Reference: Information Technology in Information Systems

Reference: Information Technology in Information Systems

Reference: Information Technology in Information Systems

Reference: Information Technology in Information Systems

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

An enterprise resource planning (ERP) system increases the:

Reference: Enterprise Resource Planning

Reference: Enterprise Resource Planning

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

Reference: Supply Chain Management and Outsourcing

An information system that supports international business activities is called a(n):

Reference: Supply Chain Management and Outsourcing

Reference: Information Technology and Management

Middle managers primarily manage at the __________ level.

Reference: Information Technology and Management

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

Reference: Information Technology and Management

MIS stands for:

Reference: Management Information Systems

Reference: Decision Support Systems

Reference: Expert Systems

Copyright 2006 Prentice-Hall. All rights reserved.

Chapter 12: Information Systems In Business

Reference: Expert Systems