TB 09

Information System, Third Canadian Edition Rainer
Chapter 9
Customer Relationship Management and Supply Chain Management
Question Type: True/False
1) Over time, the customer relationship with vendors has become more personal.
Answer: False
Learning Objective: Define customer relationship management and collaborative CRM, and identify the primary
functions of both processes.
Section Reference: 9.1 Defining Customer Relationship Management
Difficulty: Easy
2) Today, customers are becoming increasingly powerful.
Answer: True
Difficulty: Easy
3) The real problem with interacting with customers over the Web is that the company does not have an
opportunity to make a good first impression in person.
Answer: True
Difficulty: Easy
4) CRM systems focus on marketing to masses of people.
Answer: False
Difficulty: Easy
5) CRM means that a company should interact with its customers as a group.
Answer: False
Difficulty: Easy
6) Properly designed CRM systems provide a single, enterprisewide view of each customer.
Answer: True
Difficulty: Easy
7) In the past, customer data has been located all over the company, typically in the functional areas.
Answer: True
Difficulty: Easy
8) Tweets can be used as customer touch points.
Answer: True
Difficulty: Easy
9) Transactional CRM systems provide interactive communication with the customer throughout the
organization.
Answer: False
Difficulty: Easy
10) For purposes of efficiency, customer data are best stored in the functional areas of the organization.
Answer: False
Difficulty: Easy
11) Collaborative CRM systems provide interaction with customers throughout the entire organization.
Answer: True
Difficulty: Easy
12) Operational CRM systems support the front-office business processes which directly interact with
customers.
Answer: True
Learning Objective: Describe the two major components of operational CRM systems, and list three applications
used in each component, and provide at least one example of how businesses use each application
Section Reference: 9.2 Operational Customer Relationship Management Systems
Difficulty: Easy
13) Sales force automation is a customer-facing application.
Answer: True
Difficulty: Easy
14) If you have visited Amazon’s Web site previously and then return, Amazon recommends other books that
you might like. This is called cross-selling.
Answer: True

Difficulty: Easy
15) Mobile CRM systems are targeting customers through their portable devices such as smart phones.
Answer: True
Learning Objective: Compare and contrast mobile CRM systems, on-demand CRM systems, and open-source
CRM systems and identify one main advantage and one main drawback of each.
Section Reference: 9.4 Other Types of Customer Relationship Management Systems
Difficulty: Easy
16) Open-source CRM software doesn’t have as many features or functions as other DRM software.
Answer: False
CRM systems and identify one main advantage and one main drawback of each..
Section Reference: 9.4 Other Types of Customer Relationship Management Systems Systems
Difficulty: Easy
17) Modern organizations are concentrating on their core competencies and on becoming more flexible and
agile.
Answer: True
Learning Objective: Define the term supply chain, and describe the three components and the three flows of a
supply chain.
Section Reference: 9.5 Supply Chains
Difficulty: Easy
18) Supply chain visibility is the time between the receipt of incoming goods and the dispatch of finished,
outbound products.
Answer: False
supply chain.
Difficulty: Easy
19) Sourcing from external suppliers occurs in the upstream portion of the supply chain.
Answer: True
supply chain.
Difficulty: Easy
20) Packaging and assembly take place in the downstream portion of the supply chain.
Answer: False
supply chain.
Difficulty: Easy
21) There are typically four flows in the supply chain: materials, information, returns, and financial.
Answer: False
supply chain.
Difficulty: Easy
22) The goal of SCM systems is to reduce friction along the supply chain.
Answer: True
Learning Objective: Identify two major challenges in setting accurate inventory levels throughout the supply
chain, and describe three popular strategies to solve supply chain problems. Identify two major challenges in
setting accurate inventory levels throughout the supply chain, and describe three popular strategies to solve
supply chain problems.
Section Reference: 9.6 Supply Chain Management
Difficulty: Easy
23) The pull model is make-to-stock.
Answer: False
Difficulty: Easy
24) The push model begins with a forecast.
Answer: True
Difficulty: Easy
25) Whether forecasters overestimate or underestimate demand, the company still faces problems.
Answer: True
Difficulty: Easy
26) A major source of supply chain uncertainty is the supply forecast.
Answer: False
Difficulty: Easy
27) The most common solution to supply chain problems is building inventories.
Answer: True
Difficulty: Easy
28) Horizontal integration is a business strategy in which a company buys its suppliers.
Answer: False
Difficulty: Easy
29) Just-in-time inventory systems try to maximize inventories to protect against uncertainties along the supply
chain.
Answer: False
Difficulty: Easy
30) Internet protocol data interchange is a communication standard that enables business partners to
electronically exchange routine documents.
Answer: False
Learning Objective: Define “electronic data interchange (EDI),” “extranet,” and “portal,” and explain how each of
these applications helps support supply chain management.
Section Reference: 9.7 Information Technology Support for Supply Chain Management
Difficulty: Easy
31) Electronic data interchange is a problem for small businesses.
Answer: True
Difficulty: Easy
32) The Internet-based extranet is much less costly than proprietary networks.
Answer: True
Difficulty: Easy
33) Google uses micro-profiling in their search results.
Answer: True
Learning Objective: Provide real-world applications for customer relationship management and supply chain
management.
Section Reference: Opening Case
Difficulty: Medium
34) Odds of selling to existing customers = 15%, compared to the odds of selling to new customers = 50%.
Answer: False
Section Reference: Defining Customer Relationship Management
Difficulty: Easy
35) P.F. Chang followed active Twitter accounts to make the most of the customer experience.
Answer: True
Section Reference: IT’s About Business: An Instantaneous CRM Effort
Difficulty: Easy
36) Customer-facing and customer-touching applications both involve directly interacting with the customers to
solve their problems.
Answer: False
Learning Objective: Describe the two major components of operational CRM systems, list three applications
used in each component, and provide at least one example of how businesses use each application.
Section Reference: Operational Customer Relationship Management Systems
Difficulty: Easy
37) ELoyalty software is designed to analyze a caller’s personality.
Answer: True
Section Reference: IT’s About Business: Refining the Call Center
Difficulty: Easy
38) Analytical CRM systems feed data to operational CRM systems.
Answer: False
Learning Objective: Define analytical CRM systems, and explain how businesses use these systems.
Section Reference: Analytical Customer Relationship Management Systems
Difficulty: Easy
39) Open-source CRM has much more favorable pricing compared to on-premises CRM.
Answer: True
Learning Objective: Define “mobile CRM systems,” “ondemand CRM systems,” and “opensource CRM systems,”
and identify one main advantage and one main drawback of each.
Section Reference: Other Types of Customer Relationship Management Systems
Difficulty: Easy
40) One of the challenges with CRM is the customer is always right and now has more power than ever with the
Internet.
Answer: True
Difficulty: Easy
41) Flows in the supply chain are uni-directional.
Answer: False
supply chain.
Section Reference: Supply Chains
Difficulty: Easy
42) The pull model is the same as mass customization.
Answer: True
chain, and describe three popular strategies to solve supply chain problems.
Section Reference: Supply Chain Management
Difficulty: Easy
43) The bullwhip effect can also be called hoarding.
Answer: True
Difficulty: Medium
44) Vertical integration is the same thing as disintermediation.
Answer: False
Section Reference: Information Technology Support for Supply Chain Management
Difficulty: Hard
45) Cannondale focuses on a make-to-order model.
Answer: False
Learning Objective: Summarize the fundamental concepts and skills related to customer relationship
management and supply chain management.
Section Reference: Closing Case
Difficulty: Easy
46) Haya noticed that college students needed to dress up for presentations but never seemed to have any ties,
or at least not very nice ones. She decided she was going to set up a tie store on her campus and offer sports
themed ties as well as solid colored ties in her school colors. She can put an announcement on the school’s
monitors that would display in the dining halls and student union. Haya needs to decide on her CRM strategy
before she can decide on her CRM systems.
Answer: True
Difficulty: Easy
47) Haya noticed that college students needed to dress up for presentations but never seemed to have any ties,
or at least not very nice ones. She decided she was going to set up a tie store on her campus and offer sports
themed ties as well as solid colored ties in her school colors. She can put an announcement on the school’s
monitors that would display in the dining halls and student union.
The supplier of Haya’s ties is downstream in her supply chain.
Answer: False
supply chain.
Difficulty: Medium
Question Type: Multiple Choice
48) Over time, the customer relationship with vendors has become more impersonal for all of the following
reasons except:
a) people move from farms to cities

b) consumers became mobile
c) supermarkets and department stores proliferated
d) customer relationship management systems were developed
e) the Internet grew rapidly
Answer: d
management.
Section Reference: Opening Case: The Next Step in Customer Relationship Management
Difficulty: Hard
49) Which of the following best describes CRM?
a) A process
b) A set of technologies
c) An information system
d) A way of thinking and acting
e) A set of decisions
Answer: d
Difficulty: Medium
50) Which of the following is an important enabler of CRM?
a) Recognizing that there are many customer touch points

b) Recognizing the necessity of treating all customers the same
c) Recognizing the need for sophisticated CRM information systems
d) Recognizing the need for sophisticated customer databases
e) Recognizing the need for a data warehouse
Answer: a
Difficulty: Medium
51) Which of the following is not a customer touch point?
a) Telephone contact
b) E-mail
c) Web sites
d) Customer visits to a store
e) None of these – all are touch points
Answer: e

Difficulty: Medium
52) The complete data on a customer is called:
a) a profile
b) a record
c) a 360-degree view
d) a file
e) a consolidated customer map
Answer: c
Difficulty: Easy
53) Which of the following is the most important enabler of the 360-degree view of the customer across an
organization?
a) The organization’s database

b) The organization’s data warehouse
c) The organization’s CRM systems
d) The organization’s collaborative CRM systems
e) The organization’s analytical CRM systems
Answer: b
Difficulty: Hard
54) Which of the following statements is false?
a) Data consolidation and 360-degree view mean the same thing.

b) Data about customers in various functional areas was difficult to share.
c) Collaborative CRM systems enable customers to provide direct feedback to the organization
d) CRM systems use a data warehouse to make all customer data available to every unit of the business.
e) Organizations can use blogs for customer input about their products and services.
Answer: a
Difficulty: Easy
55) _____ systems support the front-office business processes which directly interact with customers.
a) CRM
b) Collaborative CRM
c) Operational CRM
d) Analytical CRM
e) Transactional CRM
Answer: c
Difficulty: Hard
56) _____ includes those areas where customers directly interact with the company.
a) CRM
b) Analytical CRM
c) Customer-facing CRM
d) Customer-touching CRM
Answer: c
Difficulty: Easy
57) Which of the follow statements is false about customer interaction centers (CIC)?
a) A call center is an example of a CIC.

b) A Help Desk is an example of a CIC.
c) In outboard telesales the sales person contacts the customer.
d) In inboard telesales the customer calls the CIC.
e) Live chat provides an advantage over telephone conversations.
Answer: d
Difficulty: Medium
58) The sales, marketing, and service functions are part of:
a) CRM
b) analytical CRM
c) operational CRM
d) collaborative CRM
e) transactional CRM
Answer: c
Difficulty: Easy
59) In _____, company representatives use multiple communication channels to support the communications
preferences of customers.
a) telesales rooms
b) group decision support rooms
c) videoconferencing centers
d) sales team meetings
e) customer interaction centers
Answer: e
Difficulty: Easy
60) _____ is the component of an operational CRM system that automatically records all the aspects in a sales
transaction process.
a) Inbound telesales
b) Outbound telesales
c) Sales team efforts
d) Sales force automation
e) The customer help desk
Answer: d
Difficulty: Easy
61) _____ is the practice of marketing additional related products to customers based on a previous purchase.
a) Bundling
b) Up-selling
c) Re-selling
d) Additional selling
e) Cross-selling
Answer: e
Difficulty: Easy
62) AT&T sells telephone services that include local and long-distance service, voice mail service, caller ID, and
digital subscriber line access to the Internet. This is a form of:
a) up-selling
b) cross-selling
c) bundling
d) customer relationship management
e) customer intimacy
Answer: c
Difficulty: Medium
63) You are in the market for a small economy car. The salesperson has you drive the economy car, and then
hands you the keys to a mid-size car of the same brand for you to drive. The salesperson is engaged in:
a) up-selling
b) cross-selling
c) bundling
d) customer relationship management
e) customer intimacy
Answer: a
Difficulty: Medium
64) _____ is a sales strategy where the business person will provide to customers the opportunity to purchase
higher-value related products.
a) Bundling
b) Up-selling
c) Re-selling
d) Additional selling
e) Cross-selling
Answer: b
Difficulty: Easy
65) _____ is a form of _____.
a) Up-selling, re-selling
b) Bundling, cross-selling
c) Up-selling, bundling
d) Cross-selling, re-selling
e) Re-selling, additional selling
Answer: b
Difficulty: Medium
66) A check-in kiosk at the airport would be what type of CRM application?
a) Inbound telesales
b) Customer touching
c) Outbound telesales
d) Sales
e) Customer facing
Answer: b
Difficulty: Medium
67) _____ are simple tools for answering repetitive customer questions.
a) Personalized Web pages

b) Customized products and services
c) Frequently asked questions
d) E-mail systems
e) Automated response systems
Answer: c
Difficulty: Easy
68) Which of the following statements about loyalty programs is false?
a) Loyalty programs work when there is a high frequency of repeat purchases.

b) Loyalty programs work when there is not personal customization.
c) The purpose of loyalty programs is to influence future behavior.
d) The purpose of loyalty programs is to reward past behavior
e) Loyalty programs are a customer-touching application.
Answer: d
Difficulty: Medium
69) _____ systems study customer behavior and perceptions to provide business intelligence.
a) CRM
b) Collaborative CRM
c) Operational CRM
d) Analytical CRM
Answer: d
Learning Objective: Define “analytical CRM systems,” and describe four purposes forwhich businesses use these
systems.
Section Reference: 9.3 Analytical Customer Relationship Management Systems
Difficulty: Easy
70) _____ creates statistical models of customer behavior and the value of customer relationships over time.
a) CRM
b) Analytical CRM
c) Operational CRM
d) Collaborative CRM
Answer: b
Learning Objective: Define “analytical CRM systems,” and describe four purposes for which businesses use these
systems.
Difficulty: Easy
71) _____ is a CRM system that is hosted by an external vendor in the vendor’s data center.
a) Mobile CRM
b) Analytical CRM
c) Operational CRM
d) On-demand CRM
e) Customer-facing CRM
Answer: d
CRM systems. Define “mobile CRM systems,” “on demand CRM systems,” and “opensource CRM systems,” and
identify one main advantage and one main drawback of each.
Difficulty: Easy
72) Potential problems with on-demand CRM include all of the following except:
a) increases costs for the organization

b) vendor could prove unreliable
c) difficult to modify hosted software

d) may be difficult to integrate hosted software with existing software in the organization
e) giving strategic data to a vendor is risky
Answer: a
Learning Objective: Define “mobile CRM systems,” “on demand CRM systems,” and “open source CRM systems,”
and identify one main advantage and one main drawback of each..
Difficulty: Medium
73) The benefits of open-source CRM include all of the following except:
a) It is easy to customize
b) It is favorably priced
c) It has more functionality than in-house CRM systems
d) Updates and error fixes occur rapidly
e) It has extensive support information available
Answer: c
Learning Objective: Define “mobile CRM systems,” “on demand CRM systems,” and “open source CRM systems,”
Difficulty: Medium
74) Trends that have led to the supply chain concept include all of the following except:
a) Modern organizations are focusing on their core competencies

b) Modern organizations are concentrating on becoming more agile and flexible
c) Modern organizations are buying their suppliers in order to have more transparency along the supply chain
d) Modern organizations are relying on other companies to supply necessary goods and services
e) Modern organizations are relying on an increasing number of suppliers
Answer: c
supply chain.
Difficulty: Hard
75) _____ is the ability for all organizations in a supply chain to access or view relevant data on purchased
materials as these materials move through their suppliers’ production processes and transportation networks to
their receiving docks.
a) Supply chain visibility

b) Horizontal integration
c) Vertical integration
d) Supply chain intelligence
e) Supply chain integration
Answer: a
supply chain.
Difficulty: Medium
76) _____ is the time between the receipt of incoming goods and the dispatch of finished, outbound products.
a) Inventory turnover
b) Inventory velocity
c) Inventory speed
d) Inventory time
e) Inventory production
Answer: b
supply chain.
Difficulty: Easy
77) A(n) _____ refers to the flow of materials, information, money, and services from raw material suppliers,
through factories and warehouses to the end customers.
a) demand chain
b) business process
c) manufacturing process
d) supply chain
e) enterprise resource process
Answer: d
supply chain.
Difficulty: Easy
78) A company’s suppliers, suppliers’ suppliers, and the processes for managing them is the:
a) suppliers’ chain
b) external supply chain
c) upstream portion of the supply chain
d) downstream portion of the supply chain
e) entire supply chain
Answer: c
supply chain.
Difficulty: Easy
79) Packaging, assembly, or manufacturing take place in which segment of the supply chain?
a) Upstream
b) Internal
c) Downstream
d) External
e) None of these
Answer: b
supply chain.
Difficulty: Easy
80) A company’s organization and processes for distributing and delivering products to its final customers is the:
a) suppliers’ chain
b) external supply chain
c) upstream portion of the supply chain
d) downstream portion of the supply chain
e) entire supply chain
Answer: d
supply chain.
Difficulty: Easy
81) Distribution or dispersal takes place in which segment of the supply chain?
a) Upstream
b) Internal
c) Downstream
d) External
e) None of these
Answer: c
supply chain.
Difficulty: Easy
82) _____ are the physical products, raw materials, and supplies that flow along a supply chain.
a) Reverse flows
b) Reverse logistics
c) Material flows
d) Information flows
e) Financial flows
Answer: c
supply chain.
Difficulty: Easy
83) Returned products, recycled products, and disposal of materials or products are called:
a) reverse flows
b) returns
c) material flows
d) information flows
e) financial flows
Answer: a
supply chain.
Difficulty: Easy
84) _____ involve money transfers, payments, credit card information and authorization, payment schedules, e-
payments, and credit-related data.
a) Reverse flows
b) Reverse logistics
c) Material flows
d) Information flows
e) Financial flows
Answer: e
supply chain.
Difficulty: Easy
85) Which of the following is not a goal of supply chain management?
a) To reduce uncertainty along the supply chain

b) To decrease inventory levels
c) To increase cycle time
d) To improve customer service
e) To improve business processes
Answer: c
Difficulty: Medium
86) Interorganizational information systems result in all of the following except:
a) reduced costs of routine business transactions

b) improved quality of information flow
c) reduced errors
d) increased cycle time
e) eliminated paper processing
Answer: d
Difficulty: Easy
87) In the _____, the production process begins with a forecast.
a) supply chain model

b) inventory model
c) pull model
d) vertical integration model
e) push model
Answer: e
Difficulty: Easy
88) In the _____, the production process begins with a customer order.
a) supply chain model

b) inventory model
c) pull model
d) vertical integration model
e) push model
Answer: c
Difficulty: Easy
89) Which of the following is not a problem along the supply chain?
a) Poor customer service

b) High inventory costs
c) Loss of revenues
d) Decreased cycle times
e) Extra cost of expediting shipments
Answer: d
Difficulty: Medium
90) The _____ is erratic shifts in orders up and down the supply chain.
a) demand forecast effect

b) supply forecast effect
c) bullwhip effect
d) inventory effect
e) customer coordination effect
Answer: c
Difficulty: Easy
91) The bullwhip effect comes from which of the following?
a) Poor demand forecast

b) Price fluctuations
c) Order batching
d) Rationing within the supply chain
e) All of these
Answer: e
Difficulty: Medium
92) Which of the following is not responsible for the bullwhip effect?
a) Poor demand forecast

b) Price fluctuations
c) Order batching
d) Rationing within the supply chain
e) Poor supply forecast
Answer: e
Difficulty: Medium
93) Which of the following is not a possible solution to supply chain problems?
a) Vertical integration
b) Building inventories
c) Information sharing
d) Horizontal integration
e) The bullwhip effect
Answer: d
Difficulty: Medium
94) When Wal-Mart sells a package of diapers, the company captures data on that sale at its point-of-sale
terminal and transmits that data to the company that makes the diapers. When it is necessary, the diaper
company restocks the diapers in that Wal-Mart store. This process is called:
a) Supply chain management

b) Demand chain management
c) Vendor-managed inventory
d) Enterprise resource planning inventory
e) Just-in-time inventory
Answer: c
Difficulty: Medium
95) Which of the following is not a benefit of EDI?
a) Data entry errors are minimized

b) Length of messages is longer
c) Messages are secured
d) Fosters collaborative relationships
e) Reduced cycle time
Answer: b
Difficulty: Medium
96) Which of the following is not a limitation of EDI?
a) It is inflexible
b) Business processes may have to be restructured
c) It is expensive, but ongoing operating costs are low
d) Multiple EDI standards exist
e) It is difficult to make quick changes
Answer: c
Difficulty: Medium
97) The primary goal of extranets is to do which of the following?
a) Foster collaboration between and among business partners

b) To provide security for corporate intranets
c) To provide effective communications inside corporate intranets
d) To enable corporate employees to view inventory information for their companies
e) To enable business partners to better plan mergers and acquisitions
Answer: a
Difficulty: Medium
98) Extranets use _____ technology to make communication over the Internet more secure.
a) telepresence
b) anti-malware
c) virtual private network
d) voice-over IP
e) videoconferencing
Answer: c
Difficulty: Easy
99) The FedEx extranet that allows customers to track the status of a package is an example of which type of
extranet?
a) A company and its dealers, customers, and/or suppliers

b) An industry’s extranet
c) Joint venture
d) B2B exchange
e) B2C exchange
Answer: a
Difficulty: Medium
100) _____ portals automate the business processes involved in purchasing products between a single buyer
and multiple suppliers.
a) Distribution
b) Corporate
c) Affiliate
d) Intranet
e) Procurement
Answer: e
Difficulty: Easy
101) Refer to Opening Case – The Next Step in CRM: Which of the following is false?
a) Taste profiling is used to target ads wherever a person navigates online.

b) Persuasion profiling develops strategies to advertise to individuals online..
c) People respond to the same pitch across multiple domains.
d) Persuasion profiling only works if the individual is aware of it.
e) Micro-profiling isolates people from discoveries outside their usual interests.
Answer: d
Section Reference: Opening Case: The Next Step in Customer Relationship Management
Difficulty: Medium
102) Refer to IT’s About Business 9.2– Chinatrust Philippines CRM Effort: Some of the advantages that a business
can capitalize on by implementing a CRM include:
a) Help acquire and retain customers more effectively

b) Record all customers interactions
c) Sales agents can access and analyze customers’ transaction history
d) Target customers more effectively
e) All of these
Answer: e
management.
Section Reference: IT’s About Small Business: 9.1 An instantaneous CRM effort
Difficulty: Medium
103) Refer to IT’s About Business 9.1 – An Instantaneous CRM Effort: Which of the following is true?
a) Organizations can ignore social media.

b) Organizations only need to be followed on Tweeter to be effective.
c) An organization has to act on posts about itself on Tweeter and Facebook.
d) Tweeter is the only way to monitor customer experiences
e) Organizations can put up a Facebook fan page and customers will flock to it.
Answer: c
Section Reference: IT’s About Business: 9.2 An Instantaneous CRM Effort
Difficulty: Medium
104) Refer to IT’s About Business 9.3– Refining the Call Center: The case discusses research that indicates that
pairing callers to the call center with like-minded representatives can result in benefits. Which of the following is
not one of the benefits?
a) Calls will be shorter.

b) Representatives can handle more calls.
c) Customer satisfaction will improve.
d) Fewer accounts will be canceled.
e) It reduces customer fallout.
Answer: e
Section Reference: IT’s About Business: 9.3 Refining the Call Center
Difficulty: Medium
105) Refer to example 9.2 Harry Rosen Inc: Which of the following is a CRM feature that was used to solve a
problem that Harry Rosen was facing with its customers?
a) It allowed to identify potential customers.

b) Customers are now able to use their smart phones to place orders.
c) The company is now able to identify potential customers.
d) Customers are now able to place orders online
e) It allows sales associates to look up inventory across the company’s locations in real time
Answer: e
Learning Objective: Define “mobile CRM systems,” “on demand CRM systems,” and “opensource CRM systems,”
Section Reference: Example 9.2
Difficulty: Medium
106) Refer to example 9.3: Baxter Canada: Which of the following statements is true?
a) EDI is used to link to the suppliers’ materials management information systems.

b) EDI used to analyze customers.
c) XML Web services are being replaced by EDU.
d) There is only one EDI standard being used today
e) EDI uses extranets.
Answer: a
Section Reference: Example 9.3
Difficulty: Medium
107) Refer to Case 9.2 – Information Technology Helps Cannondale Manage Its Complex Supply Chain: A bill of
materials for a product does not include which of the following?
a) Time to produce
b) Raw materials and quantity of each needed to produce
c) Assemblies and quantity of each needed to produce
d) Components and quantity of each needed to produce

e) Parts and quantity of each needed to produce.
Answer: a
Section Reference: Case 9.2: Information Technology Helps Cannondale Manage Its Complex Supply Chain
Difficulty: Medium
108) Refer to Case 9.2 – Information Technology Helps Cannondale Manage Its Complex Supply Chain: Which of
the following was not one of Cannondale’s objectives when evaluating IT solutions to their manufacturing
system?
a) Accurate parts flow

b) Flexibility
c) Timely reporting
d) Shared data among all involved
e) Web-based interface
Answer: e
Difficulty: Medium
109) Haya noticed that college students needed to dress up for presentations but never seemed to have any
ties, or at least not very nice ones. She decided she was going to set up a tie store on her campus and offer
sports themed ties as well as solid colored ties in her school colors. She can put an announcement on the
school’s monitors that would display in the dining halls and student union. Which of the following is true about
Haya’s supply chain?
a) Haya’s supplier is downstream in her supply chain.

b) Haya’s customers are upstream in her supply chain.
c) If a customer returns a tie, that is known as reverse logistics.
d) Haya has no information flows.
e) Haya’s supplier is the only other link in her supply chain.
Answer: c
supply chain.
Difficulty: Hard
school’s monitors that would display in the dining halls and student union. Haya orders 40 ties in each of the
school colors and 10 in each of four sports. Which of the following is true about Haya’s supply chain?
a) Haya is using a push model.

b) Haya is using a pull model.
c) Haya is experiencing the bull whip effect.
d) Haya has an accurate demand forecast.
e) None of these
Answer: a
Difficulty: Hard
school colors and 10 in each of four sports. Which of the following is true about Haya’s supply chain?
a) Haya is using a just-in-time inventory system.

b) Haya is using a vendor-managed inventory.
c) Haya is building inventories.
d) Haya has vertical integration with her upstream supplier.
e) Haya is using a pull model.
Answer: c
Difficulty: Hard
school’s monitors that would display in the dining halls and student union. Haya knows she needs to manage her
relationship with her supplier. Which of the following is true?
a) Haya should invest in EDI software.

b) Haya can use the supplier’s intranet to order.

c) Haya should give the supplier access to her VPN.
d) Haya can use the supplier’s procurement portal to order.
e) Haya can use the supplier’s extranet to check on her order.
Answer: e
Difficulty: Hard
school colors and 10 in each of four sports. She almost instantly sold out of all the sport themed ties. She
decides to approach each of the sports teams on campus to see if they would be willing to buy ties “in bulk”.
Which of the following is true about Haya’s supply chain?
a) Haya is using a push model.

b) Haya is using a pull model.
c) Haya is experiencing the bull whip effect.
d) Haya has an accurate demand forecast.
e) None of these are true.
Answer: b
Difficulty: Hard
114).____________ profiling means a company will not just suggest content you might like but will figure out
how you think so that the company can determine what you will “fall for” so the company can create a better
sales pitch.
a) Directed
b) Taste
c) Persuasion
d) Micro-
Answer: c
management.
Section Reference: Opening Case

Difficulty: Medium
115) It costs __________ times more to sell to a new customer than to sell to an existing one.
a) 2
b) 4
c) 6
d) 8
Answer: c
Difficulty: Medium
116) By increasing customer __________ rate by 5%, profits could increase by ______%.
a) acquisition, 50
b) acquisition, 85
c) retention, 50
d) retention, 85
Answer: d
Difficulty: Medium
117) Which of the following does NOT contribute to the value of a customer?
a) Loyalty
b) Number of purchases
c) Profitability
d) Size
Answer: d
Difficulty: Easy
118) _____________ is used to get rid of customer information silos within the organization.
a) Collaborative CRM system

b) Customer relationship management
c) Data consolidation
d) Operational CRM system
Answer: c
Difficulty: Easy
119) P.F. Chang’s lettuce wraps are an example of _________ branding.
a) global
b) intuitive
c) quick
d) social
Answer: b
Section Reference: IT’s About Business: An Instantaneous CRM Effort
Difficulty: Medium
120) Operational CRM is the component of CRM that supports the ________-office business processes.
a) back
b) front
c) inside
d) outside
Answer: b
Difficulty: Easy
121) Customer-_________ applications involve direct interaction with customers.
a) directing
b) facing
c) interacting
d) touching
Answer: b
Difficulty: Easy
122) _________ are organizations that use the CIC to create a call list for the sales team, whose members
contact sales prospects.
a) Call centers
b) Customer interaction boards
c) Inbound teleservices
d) Outbound telesales
Answer: d
Difficulty: Easy
123) _______ management CRM systems are used to target sales opportunities by finding new customers or
companies for future sales.
a) Contact
b) Future
c) Opportunity
d) Sales
Answer: d
Difficulty: Medium
124) __________ is a sales strategy in which the sales person will provide customers the opportunity to
purchase higher-value related products or services as opposed to, or along with, the customer’s initial product
or service selection.
a) Bundling
b) Cross-selling
c) Personalization
d) Up selling
Answer: d
Difficulty: Easy
125) _________ is an example of a customer-facing application.
a) Automated e-mail response

b) FAQ
c) Loyalty program
d) SFA
Answer: d
Difficulty: Easy
126) ________-driven customers either love something or hate it.
a) Actions
b) Emotions
c) Reactions
d) Thoughts
Answer: c
Section Reference: IT’s About Business: Refining the Call Center
Difficulty: Medium
127) __________ CRM systems are used to create statistical models of customer behavior, to determine the
value of customer relationships over time, and to create forecasts about acquiring, retaining, and losing
customers.
a) Analytical
b) Collaborative
c) Operational
d) Statistical
Answer: a
Difficulty: Easy
128) Which of the following is NOT an example of an analytical CRM system?
a) Business intelligence
b) Campaign management
c) Data mining
d) OLAP
Answer: b
Difficulty: Medium
129) Which of the following is an example of an analytical CRM system?
a) Campaign management
b) Data mining
c) Loyalty program
d) Personalized web page
Answer: b
Difficulty: Medium
130) Which of the following is NOT a disadvantage of on-demand CRM?
a) Cost
b) Integration difficulty
c) Strategic advantage
d) Vendor reliability
Answer: a
Difficulty: Medium
131) ______ CRM is a CRM system that is hosted by an external vendor in the vendor’s data center.
a) On-demand
b) On-premises
c) Open-source
d) Mobile
Answer: a
Difficulty: Easy
132) Hard Rock’s Kickback Mobile system allows customers to __________.
a) tip their server automatically

b) order drinks electronically
c) request songs to play in the bar
d) pay for their food and drinks at the point of sale
Answer: b
Section Reference: IT’s About Business: Mobile CRM on a Smartphone
Difficulty: Easy
133) Distribution is an example of a ____________ component of supply chain management.
a) Downstream
b) Internal
c) Instream
d) Upstream
Answer: a
supply chain.
Difficulty: Easy
134) A raw supplier is an example of a _______ component of supply chain management.
a) Downstream
b) Internal
c) Instream
d) Upstream
Answer: d
supply chain.
Difficulty: Easy
135) _________ flows are all data related to demand, shipments, orders, returns, and schedules as well as
changes in any of these data.
a) Financial
b) Information
c) Material
d) Schedule
Answer: b
supply chain.
Difficulty: Easy
136) IOSs involves ________ flows among two or more organizations.
a) Financial
b) Information
c) Material
d) Schedule
Answer: b
Learning Objective: Identify and discuss three popular strategies used to solve supply chain problems.
Difficulty: Medium
137) Which of the following is NOT an advantage of IOSs?
a) Cost
b) Quality
c) Scope
d) Time
Answer: c
Difficulty: Hard
138) The _________ model involves an educated guess about customer demand.
a) make-to-order
b) mass customization
c) pull
d) push
Answer: d
Difficulty: Easy
139) The bullwhip effect results in __________.
a) deficient inventory
b) excess inventory
c) mass customization
d) mass production
Answer b
Difficulty: Easy
140) ___________ is an inventory strategy where the supplier monitors inventory and then replenishes the
products when needed.
a) Bundling
b) Just-in-time
c) Vendor-managed inventory
d) Vertical integration
Answer: c
Difficulty: Easy
141) Vertical integration is a business strategy in which a company purchases its ______ suppliers.
a) Downstream
b) Internal
c) Instream
d) Upstream
Answer: d
Difficulty: Easy
142) Which of the following is NOT a benefit of EDI?
a) Cost
b) Length
c) Productivity
d) Security
Answer: a
Difficulty: Easy
143) Which of the following is NOT a limitation of EDI?
a) Cost
b) Flexibility
c) Security
d) Standards
Answer: C
Difficulty: Easy
144) Cannondale installed a __________ system to resolve its problems.
a) CRM
b) ERP
c) FAIS
d) SCM
Answer: d
Section Reference: Closing Case
Difficulty: Easy
school’s monitors that would display in the dining halls and student union. Which of the following customer
touch points will give Haya the most information after her first weekend of selling?
a) Communication she sends via smart phones.

b) She should build a web site before she begins to sell on campus.
c) She should send an Email to all students on campus.
d) She should put a flyer in every mail box on campus.
e) Actual physical interactions when customers visit her store
Answer: e
Difficulty: Easy
school’s monitors that would display in the dining halls and student union. Which of the following should Haya
consider during her first month of operation?
a) A sales force automation system

b) A customer interaction center
c) Bundling
d) Campaign management
e) Purchasing profiles
Answer: c
Difficulty: Hard
school’s monitors that would display in the dining halls and student union. Which of the following should Haya
focus on during her first month of operation?
a) Search/comparison capabilities on a web site

b) Personalized experiences to make a purchase on a web site
c) Customization of ties
d) FAQs
e) A loyalty program
Answer: e
Difficulty: Medium
school’s monitors that would display in the dining halls and student union. Haya begins collecting data about her
customers by having them sign up for Promotional Emails at her store. She collects their names and Email
address on her form. How might she use the customer data?
a) Target marketing campaigns

b) Cross-sell
c) Gain insights into her products
d) Perform customer profitability analysis
e) Marketing
Answer: e
systems..
Difficulty: Hard
school’s monitors that would display in the dining halls and student union. Haya begins to notice that her sports
ties are selling really well. Which of the following should be her next step?
a) Target marketing campaigns

b) Cross-sell
c) Insights into her products
d) Customer profitability analysis
e) Marketing
Answer: a
systems.
Difficulty: Medium
Question Type: Short Answer
150) Describe the various customer touch points in any organization. Which ones are more effective for you as
college students?
Difficulty: Medium
151) Describe the various customer-facing applications in an organization.
Difficulty: Medium
152) Describe the elements within sales force automation.
Difficulty: Medium
153) Contrast operational CRM systems and analytical CRM systems.
Section Reference: 9.2 Operational Customer Relationship Management Systems, Analytical CRM
Difficulty: Medium
154) What are the problems associated with on-demand CRM?
Difficulty: Medium
155) Describe the reasons that so many companies think mobile CRM is the CRM system of the future.
Difficulty: Medium
156) Discuss the benefits of persuasion profiling
Difficulty: Medium
157) Describe supply chain visibility and explain why it is important to an organization.
supply chain.
Difficulty: Medium
158) Describe inventory velocity and explain why it is important to an organization.
supply chain.
Difficulty: Medium
159) Describe the three flows along a supply chain.
supply chain.
Difficulty: Medium
160) Explain what “upstream” and “downstream” are within a supply chain.
supply chain.
Difficulty: Medium
161) Differentiate between the pull model and the push model.
Difficulty: Medium
162) Describe the various methods that companies use to solve problems along their supply chains.
Difficulty: Medium
163) What is the bullwhip effect?
Difficulty: Medium
164) Explain and contrast just-in-time inventory and vendor-managed inventory.
Difficulty: Medium
Question Type: Essay
165) Describe why the customer – vendor relationship has become more impersonal.
Difficulty: Hard
166) Explain why the concept of a customer relationship management system became necessary.
Difficulty: Medium
167) What is the rationale behind customer-touching applications? Explain four such applications.
Difficulty: Hard
168) Discuss the benefits and limitations of on-demand CRM systems.
Difficulty: Medium
169) What are the benefits of open-source CRM?

Difficulty: Medium
170) Describe the supply chain of your university. Be sure to include all three segments.
Difficulty: Medium
171) Describe vertical integration. How does this concept relate to supply chain management?
Difficulty: Hard
172) Define EDI and how it works.
Difficulty: Medium
173) Describe the three main types of extranets.
Difficulty: Medium
Question Type: Fill-in-the-Blank
174) Treating customers differently is a tenet of __________.
Answer: CRM

Difficulty: Medium
175) A _________ is a centralized office set up to receive and transmit a large volume of requests by telephone.
Answer: call center
Difficulty: Easy
176) ______ CRM provides business intelligence by analyzing customer behavior and perceptions.
Answer: Analytical
Difficulty: Easy
177) _________ CRM is an interactive CRM system that enables an organization to conduct communications
related to sales, marketing, and customer service activities though a mobile medium for the purpose of building
and maintaining relationships with its customers.
Answer: Mobile
Difficulty: Easy
178) _____________ flows are all transfers of money, payments, and credit-related data.
Answer: Financial
supply chain.
Difficulty: Easy
179) ______________________ portals automate the business processes involved in upstream supply chain
flows.
Answer: Procurement
Difficulty: Medium
Legal Notice
Copyright © 2014 by John Wiley & Sons Canada, Ltd. or related companies. All rights reserved.
The data contained in these files are protected by copyright. This manual is furnished under licence and
may be used only in accordance with the terms of such licence.
The material provided herein may not be downloaded, reproduced, stored in a retrieval system,
modified, made available on a network, used to create derivative works, or transmitted in any form or by
any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior
written permission of John Wiley & Sons Canada, Ltd.

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Information System, Third Canadian Edition Rainer

Question Type: True/False

2) Today, customers are becoming increasingly powerful.

4) CRM systems focus on marketing to masses of people.

8) Tweets can be used as customer touch points.

13) Sales force automation is a customer-facing application.

Section Reference: 9.2 Operational Customer Relationship Management Systems

23) The pull model is make-to-stock.

24) The push model begins with a forecast.

26) A major source of supply chain uncertainty is the supply forecast.

31) Electronic data interchange is a problem for small businesses.

33) Google uses micro-profiling in their search results.

37) ELoyalty software is designed to analyze a caller’s personality.

38) Analytical CRM systems feed data to operational CRM systems.

41) Flows in the supply chain are uni-directional.

42) The pull model is the same as mass customization.

43) The bullwhip effect can also be called hoarding.

44) Vertical integration is the same thing as disintermediation.

45) Cannondale focuses on a make-to-order model.

The supplier of Haya’s ties is downstream in her supply chain.

Question Type: Multiple Choice

a) people move from farms to cities

49) Which of the following best describes CRM?

50) Which of the following is an important enabler of CRM?

a) Recognizing that there are many customer touch points

51) Which of the following is not a customer touch point?

Section Reference: 9.1 Defining Customer Relationship Management

52) The complete data on a customer is called:

a) The organization’s database

54) Which of the following statements is false?

a) Data consolidation and 360-degree view mean the same thing.

a) A call center is an example of a CIC.

65) _____ is a form of _____.

a) Personalized Web pages

68) Which of the following statements about loyalty programs is false?

a) Loyalty programs work when there is a high frequency of repeat purchases.

a) increases costs for the organization

c) difficult to modify hosted software

a) Modern organizations are focusing on their core competencies

a) Supply chain visibility

85) Which of the following is not a goal of supply chain management?

a) To reduce uncertainty along the supply chain

86) Interorganizational information systems result in all of the following except:

a) reduced costs of routine business transactions

87) In the _____, the production process begins with a forecast.

a) supply chain model

a) supply chain model

a) Poor customer service

a) demand forecast effect

91) The bullwhip effect comes from which of the following?

a) Poor demand forecast

a) Poor demand forecast

a) Supply chain management

95) Which of the following is not a benefit of EDI?

a) Data entry errors are minimized

96) Which of the following is not a limitation of EDI?

97) The primary goal of extranets is to do which of the following?

a) Foster collaboration between and among business partners

a) A company and its dealers, customers, and/or suppliers

a) Taste profiling is used to target ads wherever a person navigates online.

a) Help acquire and retain customers more effectively

a) Organizations can ignore social media.

a) Calls will be shorter.

65) _ is a form of _.