Chapter 1 Overview of Electronic Commerce

1-According to Peter Drucker, e-commerce is profoundly changing markets, industry

structures, products and services, consumer segmentation, consumer values and consumer
behavior; jobs, and labor markets.

True False

2-By purchasing a textbook from Amazon.com and having the merchandise physically
delivered, Amazon.com would be considered a click-and-mortar organization because pure
EC did not occur.

True False

3-In the field, a sales representative writes notes with a mobile handwriting-recognition
computer immediately after a sales call. This can be viewed as an EC activity.

True False

4-In addition to EC being conducted via the Internet, EC can be conducted over local area
networks (LANs).

True False

5-An example of business-to-consumer (B2C) is when Dell provides customer service online
by collaborating electronically with its partners.

True False

6-An internal corporate network that uses Internet tools, such as Web browsers, is known
as an intranet.

True False

7-An extranet is a network that uses the Internet to link together multiple intranets.

True False
8-Purchasing a Dell computer online for use at home is an example of e-tailing.

True False

9-Networked computing connects multiple computers and other electronic devices that are
located in various locations by telecommunications networks, including wireless ones.

True False

10-When Dell purchases Godiva chocolates as gifts for its employees and has Godiva mail
them directly to the recipient Dell is engaged in B2B2C.

True False

11-Peer-to-peer (P2P) technology can be used in C2C, B2B, and B2C.

True False

12-The final participants in B2B transactions are consumers.

True False

13-Doing your banking on an Internet-enabled cell phone is an example of m-commerce.

True False

14-Despite the many e-tailing EC companies that have failed in the past, the dot-com
failure rate has recently declined sharply.

True False

15-Since 2001, no other company has had more of an impact on EC than MySpace.

True False
16-Wikipedia.com, a Web site that allows people to work together online and share
information, is an example of Web 2.0.

True False

17-The digital economy refers to an economy based on digital communication networks,

computers, software, and other related information technologies that provide a global
platform over which people and organizations interact, communicate, collaborate, and
search for information.

True False

18-Economic, legal, societal, and technological factors have created a highly competitive
business environment in which customers are becoming less powerful.

True False

19-Strong competition and increased power of consumers are two of the major market
pressures in today's business environment.

True False

20-Business models are a subset of a business plan or business case and refer to methods of
doing business by which a company can generate revenue.

True False

21-A business model outlines how the organization or the EC project will generate revenue
through sales, transaction fees, advertising fees, affiliate fees, or other revenue sources.

True False

22-A value proposition refers to the tangible and intangible benefits that a company can
derive from using EC making it an important part of the marketing plan.

True False
23-Affiliate marketing is an EC business model of word-of-mouth marketing in which
customers promote a product or service to friends or other people.

True False

24-Social networks, such as Facebook, YouTube, and MySpace, are Web sites that connect
people with specific interests by providing free services such as photo sharing, e-mail, and
blogging.

True False

25-Many companies used a corporate portal, which is a gateway for customers, employees,
and partners to reach corporate information and communicate with the company.

True False

26-Dell's cornerstone business model is based on the concept of:

rapid business
selling directly to build-to-order which allows e-collaboration with a
growth and
small and medium customers to configure their few select business
threatening
sized businesses. own customized systems. partners.
competitors.

27-________ refers to the buying and selling of goods and services; servicing of customers;
collaborating with business partners; and conducting electronic transactions within an
organization.

Partial EC E-business Pure EC E-commerce

28-EC can take several forms depending on the degree of digitization of the following three
dimensions:

the product or the payment method,

the marketing channel, the business process,
service sold, the the delivery method,
the agent, and the the collaboration, and
process, and the and the production
collaboration method. the transaction.
delivery method. method.
29-Purely physical companies are referred to as ________ companies, whereas companies
that are engaged only in EC are considered ________ companies.

virtual; pure play click-and-mortar; click-and-brick brick-and-mortar; virtual pure play; virtual

30-The ways in which EC is done include:

the Internet, value-added networks, on the Internet, the Internet and

the Internet
local area networks using intranets, or on extranets, and private
and extranets.
a single computerized machine. private networks. networks.

31-________ are systems where only routine transaction processing and information flow
take place between two or more organizations using a standard protocol, such as electronic
data interchange (EDI).

Intrabusiness EC E-CRM Interorganizational information systems B2B

32-A business such as Apple Computers making online transactions with its trading
partners is an example of:

e-CRM EDI B2B B2C

33-EC applications are supported by infrastructure and by each of the following support
areas EXCEPT:

People Marketing and advertisement Mobile devices Public policy

34-Intrabusiness EC is usually performed over intranets and/or ________.

P2P networks exchanges mobile networks corporate portals

35-A technology that is used to electronically transfer routine documents, such as invoices
and purchase orders, and for financial transactions is ________.

Exchange-to-exchange Electronic data interchange Electronic funds transfer Peer-to-peer

36-Challenges that Boeing faced with its global collaboration for the design and assembly
process of its new Dreamliner passenger plane included each of the following EXCEPT:

Information security Lag time Teams working across various time zones Data management

37-A large number of EC companies, especially e-tailing and B2B ones, failed from 1999 to
2005 for each of the following reasons EXCEPT:

The companies failed to ensure The companies failed to

The companies The companies had
they had sufficient inventory and register with search
lacked financial little marketing
a distribution setup to meet engines, such as
skills. experience.
initial demand. Google.

38-________ refers to the second-generation of Internet-based services that let people

collaborate and share information online in new ways, such as social networks and wikis.

Virtual Web Social Web Web 2.0 Media Web

39-Which of the following is not a characteristic of the Digital Revolution?

Intelligent search agents to Fraud and other Many business processes

A high rate of
help manage information cybercons carried out are expedited by up to
obsolescence.
overload. via the Internet. 50 percent.

40-Because the rate of change and the level of uncertainty are expected to accelerate,
organizations are

operating under increasing making fewer

considering less unable to react quickly
pressures to produce more decisions and/or
information when enough to threats and
products, faster, and with decisions less
making decisions. opportunities.
fewer resources. frequently.

41-According to the Business Environment Impact Model, ________ provide support to

organizations' activities and to actual performance, countering business pressures.

core competencies and critical response missions and EC and markets and
activities strategies IT government
42-A ________ is a company's method of doing business to generate revenue to sustain
itself.

marketing strategy business model business plan value chain

43-According to the ________ revenue model, companies receive commissions for referring
customers to others' EC Web sites.

affiliate fees advertising fees subscription fees transaction fees

44-According to the ________ revenue model, customers page a fixed amount, usually
monthly, to receive some type of service.

transaction fees affiliate fees subscription fees advertising fees

45-Large private organizational buyers and government agencies make large-volume or

large-value purchases through ________, also known as reverse auctions.

name-your-own-price viral online direct electronic tendering

models marketing marketing systems

46-According to the ________ model, an organization can increase brand awareness or

even generate sales by Web-based word-of-mouth marketing or promoting a product or
service to other people.

electronic tendering viral name-your-own-price online direct

systems marketing models marketing

47-Online group purchasing organizations are known as:

e-co-ops SMEs exchanges barters

48-Major barriers to EC include all of the following EXCEPT:

implementation difficulties lack of technology lack of potential customers cost

49-Which of the following is a technological limitation of EC?

Difficulty Security and privacy Unresolved taxation, Order fulfillment
obtaining venture concerns that deter public policy, and legal requirements of large-
capital. customers from buying. issues. scale B2C.

50-A job opening in the Sales Department posted on the company's Intranet by the Human
Resources Department is an example of:

B2E B2S E2C B2B

51-Boeing designing a product together with a business partner is this type of interaction:

B2B2C Nonbusiness EC B2B. Collaborative Commerce

52-A corporation uses the Internal Revenue Service's Web site to learn how to pay its
estimated quarterly income taxes. This is an example of:

G2G E2E. G2C G2B

53-The second-generation of Internet-based services that lets people collaborate and share
information online is known as Web 2.0. An example of this is:

mp3.com DoubleClick Evite blogging

54-The digital enterprise shifts the focus from managing individual information resources
such as devices, applications, and data to ________ that define the business and ultimately
deliver value to customers and end users.

transforming revenue developing organizing supply orchestrating the services and

models models chains workflows

55-Many companies employ a(n) ________, which is a gateway for customers, employees,
and partners to reach corporate information and to communicate with the company.

corporate portal intranet social network extranet

Chapter 2 E-Marketplaces
1-The functions and efficiency of an e-market are the same as that of a physical
marketplace.

True False

2-The emergence of electronic marketplaces has resulted in lower information search costs
for buyers and lower transaction and distribution costs for sellers.

True False

3-Although both marketplaces and marketspaces can sell physical products, the
marketspace also can sell digital products, which are goods that can be transformed to
digital format and delivered instantly over the Internet.

True False

4-Front end refers to the activities that support online order fulfillment, inventory
management, purchasing from suppliers, payment processing, packaging, and delivery.

True False

5-In marketing, an intermediary is a third party that operates between sellers and buyers.
Intermediaries of all kinds offer their services on the Web.

True False

6-WebMD, which is the largest U.S. medical services company, is known mainly for its
webmd.com consumer portal, but its core business is being an e-intermediary.

True False

7-The major B2B e-marketplaces are electronic storefronts, Internet malls, and exchanges.

True False
8-A portal is an information gateway that attempts to address information overload by
enabling people to search and access relevant information from disparate IT systems and
the Internet, using advanced search and indexing techniques, such as Google's desktop.

True False

9-Intermediaries are human or electronic agents that play an important role in EC by

providing value-added services such as making payment arrangements to buyers and
sellers.

True False

10-Travelers using airline Web sites to book their flights directly without the use of travel
agents is resulting in the reintermediation of travel agents.

True False

11-Search engines not only "search and match," but also have capabilities that can be used
to perform routine tasks that require intelligence.

True False

12-An electronic shopping cart is an order-processing technology that allows customers to

accumulate items they wish to buy while they continue to shop.

True False

13-Shopping carts for B2B are fairly simple, but a shopping cart for B2C may be more
complex.

True False

14-An auction is a competitive process and market mechanism that uses a competitive
process by which a seller solicits consecutive bids from buyers or a buyer solicits bids from
sellers.

True False
15-Negotiation and bargaining are two types of auctions where prices are not fixed, but
rather are allowed to fluctuate as market supply and demand change.

True False

16-Reverse auctions are bidding or tendering systems in which the buyer places an item for
bid on a request for quote (RFQ) system; then potential suppliers bid on the job, with the
price reducing sequentially, and the lowest bid wins.

True False

17-E-auctions are becoming less important selling and buying channels for companies and
individuals.

True False

18-The major limitations of e-auctions are insufficient security, risk of fraud, and a limited
pool of participants.

True False

19-A limitation of e-bartering for businesses is that excess capacity items such as office
space, storage, factory space; idle facilities; and labor cannot be bartered.

True False

20-Online negotiation can be facilitated by computer technology for the negotiation process
and software agents for searches and comparisons.

True False

21-Due to the lack of hurdles, the adoption and growth of m-commerce has been
widespread.

True False
22-The Internet economy's low barriers to entry are both an opportunity and a threat to
businesses.

True False

23-Strong competition for commodity-type products, such as toys and CDs, was a major
contributor to the collapse of many dot-com companies, which suggests that a company
needs to use innovative strategies to survive and prosper in the Internet economy.

True False

24-Because the strength of each of Porter's five forces varies considerably from industry to
industry, it would be a mistake to draw general conclusions about the impact of the
Internet on long-term industry profitability.

True False

25-Because of intense competition on the Web, new companies cannot establish good
corporate images quickly as Amazon.com had done when it had few online competitors.

True False

26-Fundamentally, the success of the pure-play jewelry e-tailer Blue Nile was due to the
company's use of Internet technologies to:

offer lower prices than competitors eliminate intermediaries go public provide quality ratings

27-Traditional and electronic markets have three main functions, which include each of the
following EXCEPT:

providing an institutional facilitating the exchange of

matching transforming raw infrastructure, such as a legal and information, goods,
buyers and materials into regulatory framework that services, and payments
sellers. finished products. enables the efficient functioning associated with market
of the market. transactions.

28-Digital products have different cost curves than those of regular products because:
 in digitization, most of
in digitization, all in digitization, most of in digitization, most of
the costs are fixed, and
of the costs are the costs are variable the costs are fixed, but
variable costs are very
variable. and fixed costs are low. variable costs are high.
low.

29-The portion of an e-seller's business processes through which customers interact,

including the seller's portal, electronic catalogs, a shopping cart, a search engine, and a
payment gateway is referred to as the ________ of the business.

front end infrastructure intermediary back end

30-All the activities that are related to order aggregation and fulfillment, inventory
management, purchasing from suppliers, accounting and finance, insurance, payment
processing, packaging, and delivery are done in what is termed the ________ of the
business.

front end back end intermediary infrastructure

31-The major ________ e-marketplaces are storefronts and Internet malls.

B2C B2B2C B2B C2B

32-An electronic storefront includes several mechanisms that are necessary for conducting
the sale. The most common mechanisms include each of the following EXCEPT:

a search engine an electronic catalog; a supply chain a payment gateway

33-________ are online markets owned and operated by a single company and may be
either sell-side or buy-side.

Commercial portals Private e-marketplaces B2B marketplaces E-malls

34-A(n) ________ is a single point of access through a Web browser to help users find
relevant and accurate business information and reduce information overload.

intermediary browser search engine information portal

35-Finding relevant and accurate information is often time-consuming and requires access
to multiple systems causing organizations to lose a lot of productive employee time. One
solution to this problem is the use of:

intermediaries. portals. browsers. intranets.

36-A type of broker that helps consumers compare different stores is a:

shopping facilitator. metamediary. search agent. virtual mall.

37-Human or electronic intermediaries attempt to address each of the following limitations

of direct interaction EXCEPT:

lack of privacy for those wanting to remain contract product search

anonymous. risk. distribution. costs.

38-The elimination of various types of agents that mediate between buyers and sellers, such
as travel and insurance agents, is referred to as:

remediation automation e-distribution disintermediation

39-A mode is purchasing where prices are negotiated or discounted is ________, which
refers to nonfixed prices, such as those in auctions or stock markets.

pre-shopping dynamic pricing commodity pricing negotiation

40-Although used occasionally in B2C commerce, customized catalogs are especially useful
in B2B e-commerce for each of the following reasons EXCEPT:

e-catalogs can show E-catalogs can be

e-catalogs can show the buyer's ID Intranets, in customized to show the
only the items that the number for the item, particular, can same item to different
employees in a specific model, or SKU deliver customized customers at different
organization are number rather than catalogs to different prices, reflecting discounts
allowed to purchase. the seller's ID business customers. or purchase-contract
numbers. agreements.

41-To be successful and useful, large e-catalogs need a(n) ________.

search engine data mining technology enhanced viewing capability directory

42-A ________ has capabilities that can be used to perform routine tasks that require
intelligence such as providing customers with assistance based on their movements on a
Web site.

intelligent engine search engine software engine software agent

43-Popular search engines include all of the following EXCEPT:

Google Lycos AltaVista MSN

44-A(n) ________ is an order-processing technology that allows customers to accumulate

items they wish to buy while they continue to shop.

merchant server e-fulfillment agent electronic shopping cart intelligent agent

45-The most common and traditional form of auctions in which one seller entertains bids
from many buyers is referred to as:

e-auctions. forward auctions double auction. reverse auctions.

46-An auction in which there is one buyer and many potential sellers; or in which a buyer
places an item for bid on an RFQ system and the lowest bid wins is referred to as all of the
following EXCEPT:

tendering system. forward auctions. bidding system. reverse auctions.

47-What is a benefit of e-auctions to sellers?

The optimal price is Convenience since the bidding can High stickiness to
Anonymity.
determined by the market. occur anywhere and any time. the Web site.

48-Organizations are embracing mobilized computing technologies for several reasons

EXCEPT:

The prices of notebook computers, Wireless security It improves the Wireless telecom
wireless handhelds, and smart problems have been productivity of support for
phones continue to fall and their solved with workers in the mobility is
capabilities continue to increase. encryption. field. growing quickly.

49-EC competition is very intense because online transactions enable each of the following
EXCEPT:

Setting up a Web site is For buyer, e-markets

Higher prices
relatively easy and reduce the cost of
because of a Product or service
inexpensive, and doing so searching for product
greater number differentiation and
reduces the need for a sales information; e.g., sellers,
of potential personalization.
force and brick-and-mortar models, prices, frequently
buyers.
stores. to zero.

50-Which of the following statements about differentiation and personalization is not

correct?

Consumers like Price cutting in Differentiation reduces

Products must be
differentiation and differentiated markets the substitutability
differentiated for
personalization and are does not impact between products,
perfect
frequently willing to pay market share very benefiting sellers who use
competition.
more for them. much: this strategy.

51-It can be said that competition between companies is being replaced by competition
between ________.

digital products and services networks industries differentiated products and services

52-The Internet has influenced industry structures in each of the following ways EXCEPT:

Increases differences A flood of new entrants has There has been a shift
Industries are
among competitors whose come into many industries in bargaining and
more efficient
offerings are kept because of reduced barriers buyer power to end
overall.
proprietary. to entry. users.

53-Impacts of e-marketplaces on B2C direct marketing include all of the following

EXCEPT:

The existence of e- EC enables Brand images The administrative work

marketplaces has customization of for new related to physical delivery,
increased the products and services, companies have especially across
promotion of products which is changing become more international borders, can be
and services through marketing and sales difficult to reduced significantly, cutting
direct marketing. activities both in B2C establish. the cycle time by more than
and in B2B. 90 percent.

54-One of the major benefits of e-markets is the improvement in supply chains with the
creation of a(n) ________.

logistics chain customized chain hub-based chain support chain

55-________ provides customers with exactly what they want, when and where they want it.
Effective communication between the supply chain and the factory floor is needed to make
it happen

Build-to-order Demand-driven Real-time Virtual

manufacturing manufacturing manufacturing manufacturing

Chapter 3 Retailing in Electronic Commerce

1-The amount and percentage of goods and services sold on the Internet is increasing
rapidly, despite the failure of many dot-com companies.

True False

2-A retailer is a sales intermediary, a seller that operates between manufacturers and
customers.

True False

3-Consumer electronics, including cell phone sales, are the largest category of online retail.

True False

4-Jewelry sales over the Internet is just beginning, but could be one of the top sellers on the
Internet in the near future.
True False

5-Offline transactions are somewhat influenced by research conducted online, with

approximately one-third of online shoppers reporting that they used the Internet to
research and influence their offline shopping choices.

True False

6-Evidence indicates that the basic principles that apply to retail success do not apply to e-
tail success.

True False

7-Offering quality merchandise at good prices, coupled with excellent service, and cross-
channel coordination and integration in which customers can almost seamlessly operate
between the online and physical environments of a business are also important elements in
successful e-tailing.

True False

8-Goods with the following characteristic guarantee provided by highly reliable or well-
known vendors are expected to facilitate higher sales volumes.

True False

9-A business model is an analysis of the organization's customers and, from that, a
discussion of how that organization will achieve profitability and sustainability by
delivering goods and services to those customers.

True False

10-Direct marketing describes marketing that takes place offline between manufacturers
and retailers.

True False
11-Virtual or pure-play e-tailers are firms that sell directly to consumers over the Internet
without maintaining a physical sales channel.

True False

12-Specialized businesses operate in a very narrow market and would find it difficult to
survive in the physical world because they would not have enough customers or could not
hold the variety of stock.

True False

13-All click-and-mortar retailers started life as a traditional storefront with a physical

retail presence only and over time adopted an online transactional capability as well (brick
only to brick-and-click).

True False

14-In today's digital economy, click-and-mortar retailers sell via stores, through voice
phone calls to human operators, over the Internet through interactive Web sites, and by
mobile devices.

True False

15-Although there are practical advantages to being an e-tailer, such as lower overhead
costs, it has many drawbacks and barriers so the winners in many market segments will be
companies that use the click-and-mortar approach.

True False

16-Online travel services have high margins because of their multiple revenue models
including commissions, revenue from advertising, lead-generation payments, consultancy
fees, subscription or membership fees, and revenue-sharing fees.

True False

17-The job market is characterized by high volatility and unbalanced supply and demand.

True False
18-In general, online real estate is replacing existing real estate agents in most markets.

True False

19-Many insurers are using a dual distribution strategy, by adding online distribution of
standard products to their traditional agency distribution system.

True False

20-From a bank's perspective, online banking offers a cheap alternative to branch banking
as well as a chance to enlist customers in remote areas.

True False

21-Egghead.com realized a substantial reduction in operating costs and inventory costs by

eliminating its brick-and-mortar stores and becoming a pure-play in e-commerce.

True False

22-In implementing a successful click-and-mortar strategy, a company must make sure

that whether a customer establishes contact through face-to-face encounters with store
personnel or through the Web page, the information and service received is consistent.

True False

23-Investors in e-tailers which report small losses on each unit sold should not be
concerned because the huge volume of business available online should more than offset
these small marginal losses.

True False

24-Cybermediation occurs at Web sites that use intelligent agents to facilitate

intermediation.

True False
25-Channel conflict occurs when adding an online distribution channel causes problems
with existing distribution channels.

True False

26-Amazon.com experienced all of the following EXCEPT:

Despite increasing a sales and net

profits, in percentage terms, Amazon
Amazon.com have Amazon.com The
has seen a drop in profitability in
trended upward, driven maintained its company's
2006, attributed to huge spending on
largely by product position as the financial
further developing its technology
diversification and its number one e- success has
infrastructure and its investment in
international presence. tailer in 2006. been assured.
the Amazon Prime discount shipping
program.

27-According to data from eMarketer, approximately ________ shop online and/or

research offline-sales online.

three in four Internet two in five Internet three in four Internet two in five Internet
users age 25 and over users age 18 and over. users age 14 and over users age 30 and over

28-All of the following categories have already been selling well online EXCEPT:

pet supplies computer hardware and software travel new cars

29-Important trends in B2C EC include all of the following EXCEPT:

many offline transactions the use of cell

online advertising the Internet will influence
are now heavily phones to shop
will increasingly approximately 25 percent
influenced by research online is increasing
use rich media. of all retail sales by 2010.
conducted online. rapidly.

30-With all else being equal in the online environment, goods with any of the following
product characteristics are expected to facilitate greater online sales EXCEPT:

Relatively expensive Frequently purchased Digitized High brand

items. items. format. recognition.
31-Marketing that takes place without the help of intermediaries is called:

direct marketing. pure-play e-tailing e-malls. disintermediation

32-Dell's strategy is best described as:

a click-and-mortar direct marketing from a a brick-and-mortar a shared service mall

strategy. manufacturer. strategy. strategy.

33-Sears marketing strategy would best be described as:

a shared service mall direct marketing from a a brick-and-mortar a click-and-mortar

strategy. manufacturer. strategy. strategy.

34-In direct marketing:

customers are contacted directly shipments are made sales are electronic
without the help of directly from the seller to made in distributors must
intermediaries. the customer. malls only. be used.

35-An online seller of travel services that generates revenue by charging fees for its services
is an example of a(n):

market maker. transaction broker. viral marketer. content disseminator.

36-A marketer that uses e-mail to advertise to potential customers is called a:

viral marketer. transaction broker. content disseminator. market maker.

37-A company that creates and manages many-to-many markets is called a:

transaction broker. content disseminator. market maker. viral marketer.

38-In an e-market, Federal Express is an example of a(n):

viral marketer. content disseminator. service provider. intermediary.

39-All of the following are potential sources of revenue for online independent travel agents
EXCEPT:

direct marketing revenues. advertising fees. transaction fees. subscription fees.

40-Which of the following is true of virtual banks?

Stringent regulations Virtual banks have Virtual banks combine Virtual banks
have eliminated fraud proven very successful online and traditional have no physical
risk in virtual banks. and profitable. branch banking services. location.

41-________ are customers who are willing to shop online because they dislike going to
grocery stores.

Time-starved customers New technologists Shopping avoiders Leading edgers

42-________ are extremely busy customers willing to shop online in order to free up time.

Time-starved customers Leading edgers New technologists Shopping avoiders

43-________ are those who are young and comfortable with technology.

Shopping avoiders Leading edgers New technologists Time-starved customers

44-All of the following are examples of interactive entertainment EXCEPT:

adult sites purchasing theatre tickets online. Internet gaming. fantasy sports games.

45-________ are gateways to storefronts and e-malls.

Shopping portals Shopping browsers Intelligent search engines Shopbots

46-Software tools that scout the Web for stores that sell similar items at low prices are
called:

Shopbots. Intelligent search engines. Shopping portals. Shopping browsers.

47-________ are sites that evaluate and verify the trustworthiness of e-tailers

Shopping portals Trust verification sites Business rating sites. Shopbot sites

48-The TRUSTe seal is an example of:

a business rating. a B2B exchange. an intermediary. a trustmark.

49-Charles wants to buy a John Lennon lithograph over the Internet, but he is unwilling to
pay for it until he inspects it to ascertain authenticity. The auction site through which he
purchases the painting agrees to hold his money until he tells them to release it to the seller.
This is an example of:

an escrow service. a warranty. a trustmark. a verification.

50-A software agent that surveys user's reading interests, then uses machine learning to
find new Web pages and news articles using neural-network-based collaborative filtering
technology is called:

an aggregator portal. a real-time agent. a learning agent. the sponsorship model.

51-A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar
strategy to do all of the following EXCEPT:

speak with one leverage each channel's advantages empower reduce refunds and
voice. for all customers. customers. exchanges.

52-The original click-and-mortar strategy used by Toys R Us failed, as did the original toy
venture of Amazon.com. Afterwards, Toys R Us sold toys online through Amazon.com.
This is an example of:

an alliance of a pure-player with a channel

disintermediation. reintermediation.
traditional retailer. conflict.

53-DeFreshFish has been in business for ten years selling custom fishing lures to local
fishermen through its store in a shopping mall. The company's owners are considering
opening a Web site and selling their products internationally. One new risk they will face in
going from a brick-and-mortar strategy to a click-and-mortar strategy is:
the risk associated with
the risk that the risk that their the risks associated with
trying to comply with
costs will products will not shifting their cost structure
conflicting rules and
erode their meet the needs of from mostly fixed costs to
regulations in many different
profit margin. their target market. mostly variable costs.
locales.

54-The single factor that will determine which intermediaries continue to exist and which
are replaced is:

the length of the

the ability of the the profitability the addition of value-
relationship between the
intermediary to match of the added services by the
intermediary and its
up buyers and sellers intermediary intermediary
customers

55-An e-tailer uses cookies to identify returning customers and to provide suggested
products for purchase based on prior shopping behavior. This is an example of:

advertising supported model. channel cooperation. personalization. on-demand delivery.

Chapter 4 Consumer Behavior

1-Netflix implemented intelligent agents in its movie recommendation service called
Cinematch to help customers select movies they would like to watch and to better manage
its inventory.

True False

2-Finding and retaining customers is a major critical success factor for most offline and
online businesses.

True False

3-One of the keys to building effective customer relationships is an understanding of

intelligent agents.

True False
4-The purpose of a consumer behavior model is to help firms understand how a consumer
makes a purchasing decision to be able to influence that decision through advertising,
special promotions, or other marketing method.

True False

5-Individual buyers do most of the actual shopping in cyberspace in terms of dollar volume
of sales.

True False

6-Purchases by governments, private corporations, resellers, and other organizational

buyers often are used to create other products or services by adding value to them.

True False

7-Personal characteristics of customers, such as age and income, are independent variables,
which are uncontrollable variables for EC companies.

True False

8-Customers rarely browse online stores if they do not intend to buy.

True False

9-According to Internet statistics, 67 percent of consumers abandoned their shopping carts

because of the lack of satisfactory product information.

True False

10-The two most cited reasons for abandoning a shopping cart and not making the
purchase are shipping charges and security concerns.

True False

11-Social factors such as customer endorsement strategies and word-of-mouth are

independent variables that play an important role in EC shopping and purchases.
True False

12-Prices, advertising, promotions, and logistics are intervening variables that can be
controlled by vendors.

True False

13-Buying decisions are the dependent variables because these decisions depend on the
independent and intervening variables.

True False

14-An objective of conducting market research is to understand the relationships between

dependent and intervening variables so that vendors can make informed decisions on the
intervening variables.

True False

15-In the consumer decision-making process, the buyer is the person who ultimately makes
the buying decision.

True False

16-When Chaplin's auto lease is about to expire, he decides it is time to buy a new car. This
imbalance between a desired state and an actual state is called need identification.

True False

17-In the decision-making process, virtual catalogs and links to external sources support
the evaluation and selection phase of that process.

True False

18-Mass marketing is an approach to marketing that treats each customer in a unique way
such as fitting advertising to the customer's profile and needs.

True False
19-Selling as many products as possible to one customer over a long period of time and
across different product lines to maximize customer value is known as relationship
marketing.

True False

20-Segmentation refers to the matching of services, products, and advertising content to

individuals and their preferences.

True False

21-A user profile defines customer preferences, behaviors, and demographic traits of a
particular customer.

True False

22-A cookie is a data file that is placed on a user's hard drive by a remote Web server only
when the user's gives full consent to collect information about the user's activities at a site.

True False

23-Attracting and retaining loyal customers is the most important issue for e-tailers
because customer loyalty can lower marketing and advertising costs, transaction costs,
customer turnover expenses, and failure costs such as warranty claims.

True False

24-Building consumer trust in EC can be achieved through integrity, which is a user's

confidence in the ability of the online store to fulfill its promises such as a money-back
guarantee.

True False

25-Clickstream data provide a trail of a user's activities in a Web site including a record of
the user's browsing patterns of every page of every Web site the user visits, how long the
user remained on a page, and even the e-mail addresses of mail that the user sends and
receives.

True False

26-According to the EC consumer behavior model, personal characteristics and

environmental characteristics are classified as:

intervening variables dependent variables decision variables independent variables

27-The major environmental variables influencing EC purchasing are:

age, gender, price, social, social, cultural, price, brand, frequency

ethnicity, education, cultural, ethnicity, community, regulatory, of purchase, and
and lifestyle. and lifestyle. political, and legal. tangibility.

28-Pricing, technical support, and logistics support are several of the ________ that can be
controlled by EC vendors and sellers

independent variables decision variables intervening variables dependent variables

29-Because online buyer's decisions depend on numerous independent and intervening

variables, decisions made by customers are classified as:

intervening variables independent variables dependent variables decision variables

30-Banner advertising on Web sites helps trigger a realization that there is a gap between
reality and a desired state, which occurs in the ________ stage of the EC purchase decision-
making process.

information evaluation, negotiation, and need purchase, payment, and

search selection identification deli

31-Marketing and advertising approaches has evolved from mass marketing to market
segmentation to one-to-one marketing. This evolution occurred because:

the marketing concerns about companies sought to the Internet enabled companies to
focus shifted from privacy had decrease the number better communicate with
customers to diminished. of marketing customers and understand their
products. campaigns. needs and buying habits.

32-The core of the "new marketing model" consists of:

customer online marketing four P's–product, place, price, and customer

relationships. channels. promotion. profiles.

33-Personalization and user profiling strategies include each of the following EXCEPT:

Building from Placing cookies on a user's

Segmenting the Using questionnaires to
previous hard drive to collect
market based on collect information
purchases or information with or without
demographics. directly from the user.
purchase patterns. the user's knowledge.

34-The two key factors limiting the use of personalization to more precisely target
marketing efforts to individual customers are:

lack of customer loyalty matching profiles with

communication costs privacy and
and service customization product offerings and
and filtering costs. trust issues.
costs. delivering those offerings.

35-By increasing customer loyalty, EC companies can achieve each of the following benefits
EXCEPT:

lower warranty lower resistance to lower transaction lower marketing and

claims costs. competitors. costs. advertising costs.

36-What has been the impact of the introduction of EC on customer loyalty in general?

There has been little

Loyalty has decreased It is not known Loyalty has increased
change in loyalty
because of customers' whether loyalty has because of targeted
because the impacts
ability to shop, compare, increased or relationship
have cancelled each
and shift vendors. decreased. marketing.
other out.

37-According to research, customer satisfaction with an Internet store:


depend on two types of
is higher for new
factors: information
customers than
quality and customer
former customers.
service quality.
drops dramatically when certain
Web site features fail to perform
cannot be
properly, such as the content's
predicted.
reliability, loading speed, or
usefulness.

38-Issues related to trust in EC include all of the following EXCEPT:

As a result of trust- When parties trust

Trust is particularly If people do not trust transference programs each other, they have
important in global the security of the EC through portal affiliation, confidence that
EC transactions due infrastructure, they seal of approval programs, transaction partners
to the difficulty of will not feel online shopping will keep their
taking legal action comfortable about communities, and customer promises. However,
in cases of a dispute using credit cards to endorsements, customers are both parties in the
or fraud. make EC purchases. fully confident in online transaction assume
purchasing transactions. some risk.

39-Procter & Gamble (P&G) used the Internet in the new product development of
Whitestrips, a teeth-brightening product. Based on this experience, P&G:

learned that the cost of online

could not reduced the time-to- decided to add
surveys were about the same as
determine the market from concept to Internet research
similarly sized telephone
target market market launch by to its traditional
surveys, but online surveys
segments for the approximately two marketing test
expedited research
Whitestrips. years. model.
considerably,

40-All of the following are correct about market research methods EXCEPT:

Markets can be segmented to

It is important first to Market segmentation is Direct mail
increase the percentage of
understand how done with the aid of marketing
responses and to formulate
groups of consumers tools such as data methods are
effective marketing strategies
are classified or modeling and data usually cost-
that appeal to specific
segmented. warehousing. effective.
consumer groups.

41-Social class, lifestyle, personality, and activities are descriptors used in ________ market
segmentation.

geographic demographic cognitive, affective, behavioral psychographic

42-To avoid getting false information from participants of online surveys, marketers learn
about customers by observing their behavior using each of the following EXCEPT:

Spyware that gathers user Cookies that allow

Transaction logs that Data mining to
information through an Internet a Web site to store
record user activities at analyze
connection without the user's data on the user's
a company's Web site. clickstream data.
knowledge. PC.

43-According to Inmon, B2C clickstream data can reveal information each of the following
EXCEPT:

Which ads and Whether there are too

What goods the What goods the
promotions were many products for the
customer wanted to customer examined
effective and which customer to wade
but could not find. but did not purchase.
were not. through.

44-Web analytics and mining tools and services:

simply report
provide most offer advanced functions that help
which pages are used to
companies with marketers decide which products to
were clicked and redesign Web
knowledge about how promote, and merchandisers
how long a sites quickly
to use clickstream data achieve a better understanding of
visitor stayed and on the fly.
effectively. the nature of demand.
there.

45-Once a company knows a consumer's preferences, the company can predict, without
asking the consumer directly, what other products or services that consumer might enjoy
through ________.

active web bugs collaborative filtering spyware personalization

46-Limitations of online research methods are all of the following EXCEPT:

E-mail surveys have The ethics and Loss of respondents Focus group responses
the lowest response legality of Web because of equipment lose eye contact and body
rate. tracking. problems. language.
47-Online methods of bringing new customers to a B2B site when a B2B vendor wants to
grow by adding new customers or products include all of the following EXCEPT:

by contacting all of its targeted through an through Web advertising

through direct
customers individually to attract affiliation such as using an ad server
mail campaigns
them to an electronic exchange. service. network provider.

48-The Internet introduced the concept of ________, which has enabled marketers and
advertisers to interact or communicate directly with customers and consumers can interact
with marketers/advertisers.

one-to-one marketing direct marketing advertising channel interactive marketing

49-The term ________ refers to the number of times users call up a page that has a banner
on it during a specific period.

click through ad view unique visit conversion rate

50-The major disadvantage of banners is ________.

the limited amount of time the limited amount of viewers have become
their
the banner is present to the information can be placed on immune to banners and
cost
visitor the banner seldom notice them

51-A(n) ________ is a type of pop-up ad that appears after a user clicks a link and remains
while content is loading to capture the user's attention for a short time, either as a
promotion or a lead-in to the site's homepage or to advertise a product or a service.

keyword banner interstitial banner exchange CPM

52-The risks of e-mail advertising management include all of the following EXCEPT:

spam fraud e-mail hoaxes measuring e-mail advertising effectiveness

53-A(n) ________ is an HTML coding statement that describes the content of a Web page
and is used by search engines to index the site's content so that it can be found.

meta-tag domainer advertorial associated ad display

54-Advertising in chat rooms, blogs, or social networks can achieve each of the following
EXCEPT:

Advertising can
They improve a Advertising can be They can be used as one-to-
become more thematic
company's search easily targeted to one connections between a
than on static Web
engine ranking. customer interests. company and its customers.
sites.

55-________ is an advertising strategy that uses word-of-mouth marketing in which

customers promote a product or service by telling others about it.

Affiliate marketing Viral marketing Ad customizing Ads as a commodity

Chapter 5 B2B E-Commerce

1-General Motors' B2B initiatives successfully enable the auto giant to reduce inventory
cost, minimize operational problems, and shorten procurement processes.

True False

2-Business-to-business e-commerce is also known B2B and refers to transactions between

businesses conducted electronically over the Internet, extranets, intranets, or private
networks.

True False

3-The major characteristic of B2B commerce is that companies attempt to electronically

automate trading, communication, and collaboration processes in order to improve them,
which cannot be done without the Internet.

True False

4-Supply chain improvements and collaborative commerce are a basic type of B2B which has
a hub manager for supply chain improvements, communicating, collaborating, and
information sharing.
True False

5-B2B EC transactions that involve one seller selling to many buyers is called an exchange.

True False

6-Since business-to-consumer (B2C) transactions are segments in the supply chain, they
should be examined in light of other supply chain activities such as manufacturing,
procurement, shipments, and logistics.

True False

7-Supply chain activities usually involve communication and collaboration.

True False

8-With B2B2C, a business sells to a business, but also delivers small quantities to customers
of the buying business.

True False

9-Intermediaries in B2B commerce, which may be virtual or click-and-mortar

intermediaries, are third parties that broker transactions between buyers and sellers.

True False

10-The purchase of goods and services as they are needed, usually the purchase of
commodities at prevailing market prices, is referred to as demand buying.

True False

11-Examples of direct materials for a food processing company are computers and
communication devices.

True False
12-MRO stands for "maintenance, repair, and operation" which refer to indirect or
nonproduction materials that support the production process.

True False

13-Markets that focus on providing materials or products that are used in various types of
industries are known as horizontal marketplaces.

True False

14-Purchases of goods or services that are based on short-term contracts and frequently
purchased in large quantities are known as strategic sourcing.

True False

15-Joining a public e-marketplace provides a business with greater buying and selling
capabilities, but the tradeoff is lower supply chain power.

True False

16-B2B can increase the efficiency and effectiveness of supply chains or dramatically
change the supply chain by eliminating one or more intermediaries.

True False

17-Companies that choose an intermediary to do their buying and selling will have high
supply chain power and buying/selling capabilities.

True False

18-Transaction fees for B2B financial services are higher than for most other methods.

True False

19-Companies will often separate B2C orders from B2B orders because those types of
orders have different order-fulfillment processes and different pricing models.
True False

20-By using the Internet and automatic-response software agents for customer service,
companies have been able to reduce their customer service costs by up to fifty percent.

True False

21-Forward auctions expand online sales and offer businesses a new venue for quickly and
easily disposing of excess, obsolete, and returned products.

True False

22-Strategic sourcing requires a holistic process that automates the entire sourcing process,
including order planning, RFQ creation, bid evaluation, negotiation, settlement, and order
execution.

True False

23-A large organizations can develop an effective procurement system by creating an

internal marketplace that combines the catalogs of all its approved suppliers into a single
internal electronic catalog, which is searched for product availability and delivery times.

True False

24-With a bartering exchange, a company submits its surplus to the exchange and receives
points of credit, which the company can then use to buy items that it needs.

True False

25-In the real world, negotiations are done primarily electronically and with negotiation
support tools.

True False

26-Key business drivers for B2B are all of the following EXCEPT:

the availability of a numerous private and the need for the willingness of
secure broadband public B2B e- collaborations between companies to incur higher
Internet platform. marketplaces. suppliers and buyers. costs to improve
collaboration.

27-B2B transactions that involve communication, design, planning, information sharing,

and activites beyond financial transactions among business partners is referred to as
________.

public marketplaces trading communities exchanges collaborative commerce

28-With ________, a business sells to a business but delivers small quantities to customers
of the buying business.

B2B2C B2B B2C B2C2B

29-A(n) ________ is an online third party that brokers B2B transactions between a buyer
and seller.

vertical marketplace horizontal marketplace intermediary strategic source

30-The purchase of goods and services as they are needed, usually at prevailing market
prices is referred to as:

direct materials spot buying consolidation strategic sourcing

31-Purchases of goods and services based on long-term contracts is referred to as:

direct materials spot buying consolidation strategic sourcing

32-________ can be supported more effectively and efficiently through direct buyer—seller
offline or online negotiations, which can be done in private exchanges or private trading
rooms in public exchanges.

Strategic purchases B2C commerce MRO Spot buying

33-What are the two types of materials and supplies that are traded in B2B?
Direct and Horizontal and Digital and Commodities and
indirect. vertical. physical. nonproduction.

34-Nonproduction materials such as equipment and tools that support production are
called:

operational materials direct materials virtual materials indirect materials

35-Indirect materials are typically used in ________ activities.

intermediary maintenance, repair, and operation (MRO) sales and marketing supply chain

36-The ________ consists of a number of interrelated subprocesses that extend from the
acquisition of materials from suppliers to packaging it and moving it to distributors and
retailers.

vertical market horizontal market production chain supply chain

37-Companies that use an intermediary to do their buying and selling tend to be:

low on supply chain high on supply chain low on supply chain high on supply chain
power and low on power and high on power and high on power and low on
buying/selling buying/selling buying/selling buying/selling
capabilities capabilities capabilities capabilities

38-The major B2B services include each of the following EXCEPT:

Financial Travel and hospitality Stock trading Retail

39-Which of the following is not one of the major benefits of B2B?

Enables customized online

Expedites Increases production Increases
catalogs with the same
processing and flexibility, permitting opportunities for
prices for different
reduces cycle time. just-in-time delivery. collaboration.
customers.

40-________ occurs when B2B eliminates a distributor or a retailer.

Disintermediation Collaboration Just-in-time delivery Purging

41-In a sell-side e-marketplace, a business sells products and services to business customers,
frequently over ________.

an exchange an intranet a web service an extranet.

42-Companies will usually separate B2C orders from B2B orders because B2C and B2B
orders have different ________.

marketing accounting order-fulfillment processes and buying and delivery

processes processes different pricing models processes

43-By using the Internet and automatic-response software agents, GE reduced the cost of
customer service calls from $5.00 per call when done by phone to ________ per
electronically answered call.

$1.00 $0.50 $2.50 $0.20

44-Some of the benefits of a(n) ________ are that distributors can check inventory, make
transactions, and look up the status of their orders significantly reducing the number of
phone calls, e-mails, and incorrect product shipments.

electronic data custom extranet-based order-entry intranet-based order-entry

interchange catalog tool tool

45-In selling directly, manufacturers may encounter a similar problem to that of B2C,
namely ________ with the regular distributors, including corporate dealers.

multichannel distribution direct sales conflict channel conflict indirect competition

46-One of the major problems facing direct sellers is ________.

how to manage the supply how to find how to find how to advertise in traditional
chain buyers suppliers channels
47-The Cisco Connection Online (CCO) Web site receives over 2 million hits per month for
technical assistance, ordering, order checking, or software downloads. This online service
had been so well received that nearly ________ percent of all customer service inquiries
and ________ percent of software updates are delivered online.

15 / 25 45 / 55 25 / 35 85 / 95

48-Companies use ________ to sell their unneeded assets for quick disposal or to easily
dispose of excess, obsolete, and returned products.

private auctions forward auctions reverse auctions liquidation

49-Benefits of using a third-party hosting company for conducting B2B auctions instead of
developing an auction site in-house include all of the following EXCEPT:

No additional resources are needed such as No Time-to-market

No redeployment of
hardware, bandwidth, engineering resources, hiring of several
corporate resources.
or IT personnel. costs. weeks.

50-A company-based acquisition site that uses e-procurement methods such as reverse
auctions, negotiations, or group purchasing, to overcome the manual searching of e-stores
and e-malls is referred to as a(n):

aggregated catalog buy-side e-marketplace intermediary desktop procurement method

51-Benefits of e-procurement over traditional procurement methods include all of the

following EXCEPT:

Lowering purchase prices

Streamlining Increasing the Increasing the skill
through product standardization,
invoice productivity of requirements and
reverse auctions, volume
reconciliation and purchasing training needs of
discounts, and consolidation of
dispute resolution. agents. purchasing agents.
purchases.

52-Major implementation challenges that companies must consider when planning e-

procurement initiatives include all of the following EXCEPT:

Increasing the number of Providing interfaces between Reviewing and Coordinating the
regular suppliers and e-procurement and integrated changing the buyer's information
integrating with their enterprisewide information procurement system with that of
information systems and systems, such as ERP or process itself. the sellers.
possibly with their supply chain management.
business processes.

53-Because conducting reverse auctions in B2B can be a fairly complex process, a(n)
________ may be essential.

open RFQ online directory third-party intermediary software agent

54-The aggregation of suppliers' catalogs on the buyer's server to make it easier to

centralize and control all procurement is called a(n):

bartering sell-side e- buy-side e- internal procurement

exchange marketplace marketplace marketplace

55-In general, the benefits of contract-management software include all of the following
EXCEPT:

Reduces Reduces contract Provides more Enables standardization of

contract-related negotiation time and efficient approval contracts throughout the
risks. efforts. processes. enterprise.

Chapter 6 Public B2B Exchanges

1-Public exchanges are many-to-many marketplaces that are open to all interested sellers
and buyers and usually run by third parties.

True False

2-One major characteristic of all exchanges is that they are electronic trading-community
meeting places for a single seller and many buyers, and possibly for other business partners.

True False

3-In electronic exchanges and traditional open-air marketplace, buyers and sellers can
interact and negotiate prices and quantities.
True False

4-Dynamic pricing refers to the rapid movement of prices over time and possibly across
customers as a result of supply and demand matching, as in auctions.

True False

5-MSN or Yahoo! are types of exchanges that generate revenue through membership fees.

True False

6-Thomas Register is basically a directory for buyers using search engines because it does
not offer any opportunity for trade or transactions on its site.

True False

7-Alibaba China is China's largest online marketplace for both domestic and international
trade among businesspeople and a trusted community of members who regularly meet,
chat, search for products, and do business online.

True False

8-To increase their financial viability, third-party exchanges try to partner with large
sellers or buyers, financial institutions that provide payment schemes, or logistics
companies to cut costs or increase market liquidity.

True False

9-Market liquidity refers to the degree to which a product or service can be bought or sold
in a marketplace without significantly affecting its price.

True False

10-Agentrics is the world's largest B2C exchange for retailers, such as Sears and Best Buy,
whose objective is to simplify and automate supply chain processes.

True False
11-Two major models of third-party exchanges are supplier aggregation and buyer
aggregation.

True False

12-For all types of e-marketplaces, the most important key to the success of any third-party
exchange is the critical mass of buyers and sellers.

True False

13-A consortium trading exchange (CTE) or consortia is most appropriate for fragmented
markets with large numbers of both buyers and sellers.

True False

14-The Global Transportation Network (GTN) provides participating carriers and

customers with significant cost savings because it frees individual carriers from the huge
capital costs of advanced technologies.

True False

15-Purchasing-oriented (procurement) consortia have not yet been a successful or popular

B2B consortium model.

True False

16-Because of their large number of buyers and sellers, B2B exchanges and other e-
marketplaces do not face anti-trust or other competition laws.

True False

17-A B2B consortium has the potential to reduce prices of individual products, thus
enabling and encouraging consortium members to buy more.

True False
18-Dynamic trading is trading that occurs in situations in which prices are determined by
supply and demand, therefore changing continuously.

True False

19-The strategy of providing comprehensive, quality e-service for business partners is

called customer relationship management (CRM).

True False

20-Because of the complexity in building large e-marketplaces and exchanges, it is usually

performed by a major B2B software company, such as Ariba or IBM, and a management
consulting company, such as PricewaterhouseCoopers, usually participates.

True False

21-Company-centered networks may be a waste of money because they are used by only
one buyer (buyer's industrial network) or by only one seller (seller's industrial network),
and they may not be open to all.

True False

22-Most exchanges have the same log-on procedures, same sets of rules for fulfilling
orders,and similar business models for charging for their services.

True False

23-Public exchanges have difficulty attracting buyers and sellers because of the transaction
fees, reluctance to share information, and the availability of too many exchanges.

True False

24-In B2B exchanges, software agents can facilitate management of multiple trading
partners and their transactions across multiple virtual industry exchanges.

True False
25-Good management and effective operations and rules are critical to the success of B2B
exchanges because good governance provides the rules for the exchange, minimizes
conflicts, supports decision making, and tries to induce the necessary liquidity.

True False

26-Before the Internet, the trading process for raw and partially processed chemicals,
plastics, and fuel oil was each of the following EXCEPT:

disintermediated fragmented slow expensive

27-ChemConnect is an example of a successful e-exchange with:

many buyers and one few buyers and few many buyers and few many buyers and many
seller. sellers. sellers. sellers.

28-A third party that operates an exchange and in many cases, also owns the exchange is
known as a(n):

intermediary negotiator agent market maker

29-In the context of EC, ________ are electronic trading-community meeting places for
many sellers and many buyers, and possibly for other business partners.

B2C portals social networks exchanges

30-From 2001 to 2006, a majority of e-exchanges:

increased in size due to devised new methods to folded due to a lack of expanded by
mergers of small e- increase revenues and customers, cash, or adding business
exchanges. profits. both. partners.

31-An exchange whose members are in one industry or industry segment and that trades
only in materials/services unique for that industry is referred to as a(n):

lateral exchange horizontal exchange vertical exchange commodity exchange

32-An exchange that handles materials used by companies in different industries is
referred to as a(n):.

lateral exchange vertical exchange horizontal exchange commodity exchange

33-Light bulbs and office supplies might be purchased in a(n) ________ by both an
automaker and a steelmaker.

commodity exchange vertical exchange lateral exchange horizontal exchange

34-In ________, the prices are usually dynamic and are based on changes in supply and
demand.

vertical sourcing spot sourcing horizontal sourcing strategic sourcing

35-In ________, the prices are usually negotiated or fixed.

spot sourcing horizontal sourcing strategic sourcing vertical sourcing

36-Spot sourcing of direct materials takes place:

in vertical in horizontal only in virtual on exchanges which operate without

exchanges. exchanges. exchanges. a market maker.

37-In spot-sourcing, prices are:

dynamic and set based on based solely on the cost fixed and set by set by the
supply and demand. structure of the seller. contract market maker

38-In an exchange where plastic components are bought and sold, the market maker
collects money from the buyer, and releases it to the seller once successful delivery is
completed. This is an example of:

maintaining exchange maintaining exchange matching buyers and transaction

policies. infrastructure. sellers. facilitation.
39-In an exchange where plastic components are bought and sold, the market maker
purchases a new server that will be used to conduct auctions. This is an example of:

transaction matching buyers and maintaining exchange maintaining exchange

facilitation. sellers. infrastructure. policies.

40-A market maker evaluates an exchange between a buyer in the United States and a
seller in Spain to ensure that import laws for the U.S. are followed. This is an example of
the market maker:

matching buyers transaction maintaining exchange policies interfering with

and sellers. facilitation. and infrastructure. exchange policies.

41-In the consortia model:

a dominant player in the several industry players a neutral third party the public is invited
industry establishes the come together to establishes and to join the exchange
exchange and invites establish the exchange manages the as a way to offset
others to join. for the benefit of all. exchange. expenses

42-The exchange model in which a third party sets up the exchange and promises to run it
efficiently and without bias is called the:

industry giant model. co-op model. neutral entrepreneur model. consortia model.

43-An exchange charges an annual fee of $25,000 for all parties who want to trade in the
exchange. The revenue model in use by this exchange is the:

transaction fee model. membership fee model. advertising fee model. fee for service model.

44-A market maker charges a percentage on every buy and sell made in the exchange. The
revenue model in place in this exchange is the:

advertising fee model. fee for service model. transaction fee model. membership fee model.

45-A market maker bills a buyer for reviewing several seller contracts and making a
recommendation on what to buy and from whom. The revenue model being used in this
example is the:
membership fee model. advertising fee model. fee for service model. transaction fee model.

46-All of the following are potential sources of revenue for an exchange EXCEPT:

advertising fees. membership fees. fees for services rendered. shipping and handling fees.

47-When membership fees are the basis for revenue generation in an e-exchange, it has
been shown that:

low membership fees often
result in losses to the
exchange,; however, high
fees discourage
participation.
when fees are very low, there should be a fee
the higher the
the exchange sees for every service
fees charged,
greater utilization which provided; there should
the greater the
leads to greater revenue be no free services for
total profit.
and profit. members.

48-The concept of liquidity for a B2B exchange is the:

ease with which orders can be number of buyers ease with which amount of
placed, processed, and shipped and sellers in a information flows between available cash
using the exchange. market. exchange members. on hand.

49-The exchange model in which RFQs are aggregated then linked to a pool of suppliers
who are notified automatically of the RFQ is the ________ model.

reverse auction buyer aggregation supplier aggregation seller aggregation

50-Markets in which several large sellers sell to a large number of buyers are called:

differentiated seller-concentrated fragmented buyer-concentrated

markets. markets. markets. markets.

51-Attracting large business sellers to public exchanges is often difficult for all of the
following reasons EXCEPT:

competitors who are also they are required to pay

advertising costs in it is sometimes
exchange member may transaction fees even when
public exchanges difficult to recruit
gain access to confidential they engage in transactions
are very expensive. large suppliers.
information. with existing customers.
52-In dealing with exchange members, the management of the exchange should:

leave the management of strive to maximize take special care of make certain that the
day-to-day operations of exchange revenues the companies that exchange is neutral in
the exchange to the through charging the share ownership in its dealings with all
members. highest possible fees. the exchange. members.

53-The most attractive industries for a vertical exchange are characterized by:

a market in which a small number of

a few very large
stagnant many fragmented very large orders account for more
players that totally
technology. buyers and sellers. than half the total market volume per
dominate the industry.
year.

54-Brand building is important in B2B exchanges because:

information flow is poor in it is easy for exchange members exchange members

most exchanges, making exchange members typically buy only typically buy products
trust of suppliers very to change to another the best brands of at the lowest cost
important. exchange. product. unless branded.

55-Using tunneling technology to improve security of communication over the Internet is

called:

local area network Internet protocol electronic data interchange virtual private network
(LAN) (IP) (EDI). (VPN).

Chapter 7 E-Supply Chains

1-Although a company's success is clearly dependent on finding and retaining customers,
its success may be far more dependent on what is behind the Web page than on what is on
the Web page.

True False
2-It has been well known for generations that the success of many private, public, and
military organizations depends on their ability to manage the flows of materials,
information, and money, which is referred to as the product life cycle.

True False

3-Supply chain problems can cause delays, products not being where they are required at
the right time, customer dissatisfaction, lost sales, and high expenses that result from fixing
the problems once they occur.

True False

4-The term supply chain comes from the concept of how systems and processes within an
organization are linked together.

True False

5-A supply chain involves activities that take place during the entire product life cycle,
"from dirt to dust."

True False

6-A supply chain can be broken into three major parts: upstream, internal, and
downstream.

True False

7-The downstream part of the supply chain includes the activities of a company with its
suppliers, which can be manufacturers, assemblers, or both, or service providers, and their
connections with their suppliers.

True False

8-In the internal part of the supply chain, the major concerns are production management,
manufacturing, and inventory control.

True False
9-In the upstream supply chain, attention is directed at distribution, warehousing,
transportation, and after-sale service.

True False

10-SCM aims to minimize inventory levels, optimize production and increase throughput,
decrease manufacturing time, optimize logistics and distribution, streamline order
fulfillment, and overall reduce the costs associated with these activities.

True False

11-A major requirement for any medium- to large-scale company that is moving to EC
implies an integration between all the activities conducted on the Web and the
ERP/MRP/SCM solutions–in other words, creating an e-supply chain and managing it.

True False

12-E-supply chain management is the collaborative use of technology to enhance B2C

processes and improve speed, agility, real-time control, and customer satisfaction.

True False

13-The success of an e-supply chain depends on managing information with strict policies,
discipline, and daily monitoring.

True False

14-The success of an e-supply chain depends on an e-supply chain that is loosely integrated
both within a company and across an extended enterprise made up of suppliers, trading
partners, logistics providers, and the distribution channel.

True False

15-Companies can use replenishment information to reduce inventories and eliminate

stocking points.

True False
16-By combining bar coding and wireless technologies, automobile dealers are able to scan
in goods as they arrive electronically and place them in inventory up to 10 percent faster
than previously.

True False

17-At hospitals and supermarkets, inventory reorder points have been automated so that
when inventory gets down to a certain point the system will automatically notify a human
of the exact amount to reorder.

True False

18-Functional products are staple products, such as groceries or gasoline, that have stable
and predictable demand. For these products, an effective supply chain emphasizes speed,
responsiveness, and flexibility rather than low costs.

True False

19-Pure EC companies may be likely to have more supply chain problems because they
may not have a logistics infrastructure and may be forced to use external logistics services.

True False

20-A major limitation of RFID currently is the restriction of the environments in which
RFID tags are easily read.

True False

21-RuBee relies on low-frequency magnetic waves to track products and transfer

information. It is becoming a replacement for RFID because RuBee overcomes many of
RFID's limitations.

True False

22-With vendor-managed inventory, retailers make their suppliers responsible for

determining when to order and how much to order. The retailer provides the supplier with
real-time information such as point-of-sale data, inventory levels, and a threshold below
which orders are replenished.
True False

23-The goal of collaborative planning, forecasting, and replenishment (CPFR) is to

streamline product flow from manufacturing plants to retailers.

True False

24-Studies have shown that electronic-based collaboration and product lifecycle

management (PLM) can reduce product costs and travel expenses by 50 percent, as well as
significantly reduce costs associated with product-change management.

True False

25-As with any IT project, management needs to be able to justify the development and use
of a corporate portal by comparing its cost with its benefits. The challenge is that despite
the tangible benefits from investment in portal technology, such as include increased
revenues and customer loyalty, most of the benefits of portals are intangible.

True False

26-A company's internal operations and its relationships with suppliers and other business
partners are frequently:

much more complex than much less complex than as complex as

replaced by
customer-facing customer-facing customer-facing
customer-facing
applications such as applications such as applications such as
applications.
taking an order online. taking an order online. taking an order online.

27-For a manufacturer, the supply chain ends:

when the customer when the supplier delivers raw when the when the product
decides he/she is materials and component parts to customer buys is used up and
satisfied with a product the manufacturer. the product. disposed of.

28-The use of Web technologies to manage warehousing and transportation processes is

called:

collaborative planning e-replenishment. downstream processing e-logistics

29-The e-SCM process that includes integrated production and distribution processes is:

collaborative planning e-logistics e-procurement supply chain replenishment.

30-The last fifteen orders from a manufacturer to its suppliers range from $100,000 to
$8,740,000. This is an example of:

supply inadequacy. demand manipulation. order instability. the bullwhip effect.

31-B2B systems which are used for communication, design, planning, information sharing,
and information discovery are called:

collaborative electronic data information aggregation electronic bartering

commerce. systems. systems. systems.

32-All of the following would be considered c-commerce EXCEPT:

communication and sharing on-demand training

connecting aggregating catalogs
collaboration with courses across many locations
suppliers. on a central server.
suppliers. simultaneously.

33-RFID can provide immediate, short-term, and long-term value to organizations. An

example of immediate value from RFID is when:

an RFID tag tells an RFID tag sends a an RFID tag reveals the an RFID tag tells
customer service report to the supplier supplier of a faulty inventory control
which factory made every time one of its component without the every time a roll of
the faulty product component parts is used need for quality control wire moves out of the
returned by a in the manufacturing to research component warehouse and onto
customer. process. order records. the factory floor.

34-A major block in the widespread implementation of collaborative commerce is:

the theory of collaborative the lack of

the technology collaborative
commerce hasn't been proven universally
needed isn't commerce is
effective in real-world accepted
available. extremely expensive.
applications. standards.
35-Wal-Mart and Levi Strauss collaborate on demand forecasting in order to optimize the
flow of materials along the supply chain. This is an example of:

reducing design cycle time. CPFR. APS. reducing product development time.

36-The purpose of CPFR is to:

minimize ensure that members of the supply

optimize the flow
quality eliminate chain will have the right amount of
of materials along
problems in intermediaries. raw materials and finished goods
the supply chain.
supplies. when they need them.

37-________ is a business strategy that enables manufacturers to control and share

product-related data as part of product design and development efforts.

Product lifecycle Advanced planning and Internal Collaborative

management scheduling commerce planning

38-All of the following are true about product lifecycle management (PLM) EXCEPT:

The demand for PLM in PLM tools are PLM is a big step for an PLM can have
limited because it does offered by organization because it significant beneficial
not apply to products SAP, Matrix requires integrating impacts in cycle time,
that have short life cycles One, EDS, and different processes and design reuse, and
or are complex. IBM. systems. engineering.

39-Today, many business experts agree with each of the following EXCEPT:

Supply chains from the

The supply chain needs The insightful way to
Supply chain suppliers' suppliers to
to be operationally view contemporary
integration has the customers' customers
integrated so that business is that
reduced the should be jointly
inventory activities link competition exists
intensity of planned and designed
seamlessly to between or among supply
competition in for overall optimality by
manufacturing chains rather then
most industries. all of the supply chain
activities. individual companies.
partners.
40-When planning, designing and implementing integrated supply chain operations,
management requires a holistic focus that takes account all of the following primary
factors EXCEPT:

culture, including performance

location and strategy, structure, IT and business
measurement, monitoring, and
revenues. and people. processes.
incentives.

41-Software that helps integrate different types of information systems among

collaborating companies is called:

browser technology. middleware. collaborative software. extranet technology.

42-Collaborative workflow applications:

have predefined are business process address mission- address project-

workflows, but can be automation tools that critical, transaction- oriented and
redefined quickly place system controls in oriented, high volume collaborative
when needed. the hands of users. processes. processes.

43-Software applications that address project management concerns are examples of:

administrative workflow portal collaborations workflow production workflow

applications. applications. applications. applications.

44-Addressing mission-critical, high-volume transaction processes is the goal of:

collaborative workflow production workflow administrative workflow portal

applications. applications. applications. applications.

45-The steps required to approve an expense report is an example of:

administrative workflow production workflow collaborative workflow portal

applications. applications applications. applications.

46-________ is the transfer of documents and computer files while videoconferencing.

Interactive whiteboarding CPFR Web conferencing Data conferencing

47-The primary benefits of workflow management systems include all of the following
EXCEPT:

fewer chances for delay or less management increased data cycle time
misplaced work. intervention. security. reduction.

48-When large suppliers or buyers are involved, a workflow system:

is needed for both the

will fail because of may be helpful for is needed for
collaborative efforts and for
system supply chain collaborative
supply chain and production
incompatibilities. improvements. efforts only.
improvements.

49-Groupware is appropriate in all of the following situations EXCEPT:

For groups to share For networked For people working on For people in the
ideas and opinions. environments. different tasks or projects. same room.

50-________ means that the communication and collaboration are done in real time.

Bi-synchronous Asynchronous Synchronous Multi-Synchronous

51-All of the following are types of communication and collaboration done in real time
EXCEPT:

instant messaging blogging webinars VoIP

52-The growth in electronic meeting systems has been driven by all of the following
EXCEPT:

Acceptance of virtual meetings as

Shorter Improvements in Reductions in the price
a respected way of doing
cycle times. supporting technology. of the technology.
business.

53-The major benefit of group decision support systems is:

 in easier
in conducting in passive listening while in faster decision making
decision
virtual meetings. information is distributed. with greater agreement.
making.

54-Corporations are moving their phone systems to ________ to cut costs and boost
efficiency.

VoIP RTC video kiosks GDSS

55-All of the following apply to instant video EXCEPT:

The idea is for a kind of video
chat room that allows users to
chat in real time and see the
person(s) they are
communicating with.
It is the natural The highest quality
It evolved from the
result of wanting approach is to add
spread of instant
to link people via video cameras to the
messaging and
both voice and participants'
Internet telephony.
audio. computers.

Chapter 8 Innovative EC Systems

1-Wikis are used for informal organizational training because it reduces the cost and time
of training.

True False

2-E-government applies only to the interaction of the government with its business
suppliers.

True False

3-The government-to-citizens (G2C) category includes all of the interactions between a

government and its citizens that can take place electronically.

True False

4-Two major areas of G2C activities are "tourism and recreation" and "research and
education."
True False

5-Current voting technologies are being implemented in various countries because of the
security provided by these technologies.

True False

6-The Government Paperwork Elimination Act and the Memorandum on E-Government

ordered the top 500 forms used by citizens to be online by December 2000.

True False

7-The smart card system is part of a nationwide electronic benefits transfer system in the
U.S. for Social Security and welfare payments and other benefit payments.

True False

8-Social networks, such as MySpace, Facebook, and YouTube, are rarely used by political
candidates to reach voters because there are too few users of those networks who actually
vote.

True False

9-Forward auctions are buy-side auction systems used by the government to buy large
amounts of MROs and other materials directly from suppliers.

True False

10-Electronic filing of business taxes is available in over 100 countries, from Thailand to
Finland to the United States.

True False

11-The U.S. Navy's Lifelines system is an example of G2E EC.

True False
12-The e-government transformation process from traditional delivery to full
implementation is a quick process.

True False

13-G2B is easier to implement than G2C.

True False

14-One of the most important issues in implementing e-government is its adoption and
usage by citizens.

True False

15-The topic of e-learning is gaining much attention, especially because world-class

universities such as MIT, Harvard, and Stanford in the United States and Oxford in the
United Kingdom are implementing it.

True False

16-At Cisco, e-learning helped reduce employee training time and costs by almost 25
percent.

True False

17-One disadvantage of e-learning is the lower content retention rate compared to

traditional in-person training.

True False

18-An important advantage of e-learning is that it can provide a fear-free and privacy-
protected environment in which students can put forth any idea without fear of looking
stupid.

True False
19-A drawback of e-learning is that no online course can deliver real-time information and
knowledge in the way a "live" instructor can.

True False

20-Unlike educational institutions, only a small number of business organizations are using
e-learning on a large scale.

True False

21-The dynamic approach to publications personalizes content in real time and transmits it
on the fly in the format best suited to the user's location, tastes, and preferences. This
approach also is called just-in-time (JIT).

True False

22-One of the seven principles for building effective blogs is to think of a blog as a database
instead of a newspaper-like collection of posts.

True False

23-Senior executives and companies are using the blogosphere to build trust-based
relationships, polish corporate reputations, promote social causes, and accomplish other
professional goals.

True False

24-Knowledge portals are single-point-of-access software systems intended to external use

only provide easy and timely access to knowledge and to support communities of
knowledge workers who share common goals.

True False

25-P2P signifies a shift in peer-networking emphasis from hardware to applications

because easier configuration and control over applications enable even non—technical
people to join the user community.

True False
26-________ are a popular online publishing technology for creating a Web page that can
be edited by anyone with a standard Web browser.

P2P Wikis Point-casts Blogs

27-All of the following are examples of e-government EXCEPT:

a state purchasing officer an unemployed worker

a company sells a contractor submits
places an online order for consults a Web site
army and navy an application for a
office supplies from an e- operated by the state
surplus supplies building permit
catalog sent to her by a employment department to
at auction over using a city hall
national office supply learn about job openings in
the Internet. Web site.
store. his city.

28-An example of G2C is:

a road contractor uses a regional hospital an employee at the Chamber a driver applies for
the Internet to submit a conducts an online of Commerce gets local and pays for the
closed bid on a paving reverse auction for demographic data from a renewal of his auto
contract. cleaning supplies. U.S. Census site. tag online.

29-Chaplin reports quarterly sales revenue from his business to city hall over the Internet.
He pays his local business tax with a credit card. This is an example of:

e-government G2C e-commerce e-Procurement G2B e-commerce

30-A government agency uses an online reverse auction to satisfy the tendering system
requirements specified by law. This is an example of:

e-Procurement G2B e-commerce G2C e-commerce e-government

31-Government-to-employee applications can lead to significant efficiency improvements

for all of the reasons EXCEPT:

Many military Most government Governments employ Employees of federal and

employees are stationed employees use large numbers of people state governments often
in remote locations that handheld digital that need to be paid and work in a variety of
are best served via the devices. trained. geographic locations.
Internet.

32-All of the following are problems in implementing e-Government EXCEPT:

it is difficult to protect businesses have been the technology needed to

transformation is
personal data collected more receptive to implement stage 6 of the
typically very
through an e- G2B than Deloitte transformation
slow
Government site. individuals to G2C. process does not exist yet.

33-One of the most important issues in implementing e-government is:

providing for secure its adoption and the use of encryption and designing feature-rich
payments. usage by citizens. digital signatures. Web sites.

34-All of the following are advantages of e-learning EXCEPT:

it costs less to deliver education college professors are knowledge

learning time
online than in a traditional anxious to develop new retention is
is reduced.
classroom. online courses. higher.

35-All of the following are potential drawbacks of e-learning EXCEPT:

assessment issues knowledge retention is protecting the intellectual

instructors must
remain to be lower than in traditional property of content
be retrained.
resolved. classrooms. developers.

36-Most universities use e-learning:

exclusively in only when forced by as a total

as a supplementary
reaching students who administrators to use it as a replacement for
channel to traditional
couldn't otherwise way to recruit distant traditional
classrooms.
attend classes. students or reduce costs. classrooms.

37-The business forces that are driving the transition from traditional education to online
learning are all of the following EXCEPT:

limited supply of faculty with competition and cost network technological

specialized expertise. pressures. connectivity. change.

38-Which of the following is an example of edutainment?

An online science fiction

Two or more A community college An online game that uses
game whose object is to
students sharing providing an online colorful characters to
blast as many aliens as
music over the college course on teach young children
possible in a 60 second
Internet. digital media. about numbers.
round.

39-One of the facilitators of e-learning is ________ technology such as wikipedia.org.

Macromedia Blackboard WebCT Web 2.0

40-________ is the electronic delivery of newspapers, magazines, books, videos, music, and
other digitizable information over the Internet.

Blogging Online publishing Social networking Webinar

41-More and more people are willing to pay for digital music, as shown by the success of
________.

Apple's iTunes Napster Kazaa P2P

42-________ is commonly used to broadcast public lectures and e-seminars, promote the
work of new or unknown musicians, and broadcast international entertainment activities.

Podcasting Webcasting Dynamic publishing File sharing

43-A podcast is distinguished from other digital audio formats by:

the iPod
its lack of its ability to be downloaded
its use of unpaid hardware
proprietary automatically, using software capable
subscriptions. required to hear
content. of reading feed formats such as RSS.
it.
44-The exclusively online publication of Stephen King's e-book Riding the Bullet in March
2000:

as disrupted by hackers was an unqualified success and was a failure

produced
who breached security, established electronic publishing because the cost
very few
then distributed free copies as a legitimate competitor for of the book was
sales.
of the book. traditional publishers. too high.

45-A type of e-book referred to as the ________ is a truly multimedia, online-only book that
has hyperlinks, three-dimensional text and display, graphics, audio, and video. It supports
nonlinear exploration of topics.

Rubics-cube hyperlink online reference book interactive, build-your-own

download
book model. decision book

46-The primary advantage that e-books offer publishers is:

the ability to lower production,

the ease of updating the ease of customizing
reach many marketing, and delivery
books in real-time. textbooks and trade books.
readers. costs.

47-Which of the following statements about blogs is not true?

Blogs became very popular after

A blog is a personal
the September 11, 2001 terrorist The most
Web site, open to the
attacks when people were looking common types of Blogs are limited to
public, in which the
for as many sources of blogs are one-way
owner expresses his
information as possible and for professional communication.
or her feelings or
personal connections to the blogs,
opinions.
tragedy.

48-Risks in corporate blogging include all of the following EXCEPT:

the risk of disciplinary the risk of the risk making statements that are
the risk of
action against abusive revealing trade or could be construed as libel or
lawsuits
bloggers. secrets. defamation.

49-A major purpose of an organizational knowledge base is to support and allow ________.
organizational capital knowledge sharing responsible blogging e-learning

50-The tasks of KM include each of the following EXCEPT:

enhancing a knowledge managing knowledge creating knowledge

restricting
environment in order to as an asset so as to repositories where
knowledge access to
conduct more effective increase the effective knowledge can be
prevent its transfer
knowledge creation, use of knowledge stored and retrieved
between individuals.
transfer, and use. assets over time. easily.

51-Knowledge is of limited value if:

company databases are not companies protect it to

users contribute their it is not
accessible to decision maintain competitive
own specialized content. shared.
makers. advantage.

52-________ involves using various computer-based tools and techniques to analyze

transaction data and generate new ideas.

Knowledge management Knowledge capture Knowledge classification Knowledge creation

53-Knowledge generated in e-business contributes to the enhancement of three core

operating processes, which include all of the following EXCEPT:

customer relationship supply chain product development project

management management management management

54-Customer-to-customer (C2C) e-commerce is conducted in various ways on the Internet,

but the best-known C2C activities are:

C2C exchanges C2C auctions Personal services Classified ads

55-P2P systems have all of the following key characteristics EXCEPT:

They provide for real-time They support cross- The users' The overall system is
access to other users networking protocols such computers can well integrated, but
through techniques such as SOAP or XML-RPC, act as both lacks tools for easy
as instant messaging and which enables a program clients and creation of content or
multichannel on one computer to servers. for adding
collaboration applications. execute a program on a functionalities.
server computer.

Chapter 9 Mobile Computing and Commerce

1-Using wireless technologies, one can create EC applications that are not available with
wireline systems.

True False

2-Mobile computing refers to a computing paradigm designed for workers who travel
outside the boundaries of their organizations or for anyone on the move.

True False

3-The two solutions that were necessary for mobile wireless computing to be feasible were
computers that were small enough to be carried easily and long-life batteries.

True False

4-A laptop or notebook computer can become wireless with the addition of a cellular chip.

True False

5-Overall, PDA sales dropped in the mid-2000 because PDAs lacked features beyond
personal information management.

True False

6-The primary application of Blackberry is instant messaging.

True False
7-Hardware and software designers need to consider the special requirements of mobile
devices such as small screens, reduced memory, limited bandwidth, and restricted input
capabilities.

True False

8-A Web server may need two versions of the same Web page–a normal page with full
graphics for desktop computers and a mobile page for PDAs and smartphones–and a way
to distinguish between devices requesting the Web page.

True False

9-The infrastructure to support mobile commerce is inexpensive and relatively simple to

put in place.

True False

10-Common standards for various mobile devices simplify the development of software
applications for wireless devices.

True False

11-Small handheld computing devices use a variety of interface approaches including a

touch screen, mini-joystick, jog dial, and thumb wheel.

True False

12-The Wireless Application Protocol, or WAP, is a suite of network protocols designed to

enable different kinds of wireless devices to access WAP-readable files on an Internet-
connected Web server.

True False

13-The WAP gateway is a server that is responsible for translating information requests
from the device into an HTTP request that the Web server can understand.

True False
14-Micropayments for small-purchase amounts of less than $10 have become widespread in
EC, in part because of the widespread use of all types of mobile devices.

True False

15-Increased use of voice-support services exploits the built-in audio capabilities of many
mobile devices and reduces their dependence on unsatisfactory input solutions, such as
handwriting recognition, keypads, or virtual touch-screen keyboards.

True False

16-The highest level of voice support services is a voice portal, which is a Web site with an
audio interface that can be accessed through a telephone call.

True False

17-WiFi is a set of telecommunications standards that enables wireless devices to

communicate with each other over short distances, but which suffers from interference and
security problems.

True False

18-The most popular Wi-Fi standard is 802.11b, which is inexpensive and offers sufficient
speed for most devices, but has interference problems.

True False

19-A common type of personal area network (PAN) is Bluetooth-enabled headsets that
people use with their cell phones.

True False

20-Increasingly, 802.11b is being used in commercial environments where cost is not a

major issue and where laptop computers can take advantage of the 54 Mbps transfer rate.

True False
21-WiMax is an IEEE 802.16 wireless standard for making broadband network access
widely available for data and voice over a medium-sized area, and whose impact on e-
commerce is still unclear.

True False

22-Even though micro-payment technology has wide-ranging applications, such as making

payments to parking garages and public transportation, two factors limiting the success of
micro-payment applications are transaction costs and nonpayment risks.

True False

23-The two greatest opportunities in B2B mobile commerce are to use wireless
communication to share information along the supply chain and to make electronic
payments.

True False

24-In Las Vegas, the Luxor pre-registers guests when their airplane lands and they turn on
their cell phones. Also, the hotel can determine when guests leave the hotel, luring them
back to gamble with mobile incentives and pitches. This is an example of Global
Positioning Systems (GPS).

True False

25-Several key ethical issues in m-commerce include isolation, loss of privacy, and potential
health damage from cellular radio frequency emissions.

True False

26-M-commerce transactions and activities require ________ and ________.

hardware and software

cell phones; smartphones; wired networks;
infrastructures; infrastructure
portable computers switches access points
support

27-Infrastructures that support the wireless connection are:

PDAs, WAP gateways, network access points, mobile
web servers, mobile
smartphones, and GPS locators, communications server switches,
devices, and
portable and GPS and cellular transmitters and
microbrowsers.
computers. satellites. receivers.

28-Components of a wireless infrastructure that support delivery of services over a wireless

connection are:

WAP gateways, network access points, mobile

PDAs, web servers, mobile
GPS locators, communications server switches,
smartphones, and devices, and
and GPS cellular transmitters, and
portable computers. microbrowsers.
satellites. receivers.

29-Characteristics of mobile devices that create special requirements that hardware and
software designers need to anticipate when designing mobile computing systems include all
of the following EXCEPT:

restricted input capabilities small screens broad bandwidth reduced memory

30-The exchange of updated information with other computing devices is called:

data transferring synchronization. marking docking

31-A suite of network protocols designed to enable different kinds of wireless devices is
called:

Wireless Application a mobile application user wireless a mobile operating

Protocol. interface. middleware. system.

32-The application logic in a handheld PDA, smart phone, Palm or Wintel notebook is
called:

a mobile application user wireless a mobile operating Wireless Application

interface. middleware. system. Protocol.

33-________ enables the determination of the location of an enabled device.

WAP GPS SMS PDA

34-Rick sends a message from a delayed flight to his friend on her cell phone that he will be
arriving late. The service that allows the sending and receiving of such short text messages
on mobile phones is called:

SMS LOL TMG MSG

35-Micropayments are electronic payments:

that are less than that are less than that are less than from a mobile
$100.00. $1.00. $10.00. device.

36-A ________ is suitable for mobile users who need to make very short-range device-to-
device wireless connections within a small space, such as a single room, and most
commonly with Bluetooth.

wireless area network local area network Wi-Fi area network personal area network

37-Most WLANs run on a telecommunications standard known as ________, which is more

commonly called ________.

IEEE 802.11; Bluetooth WLAN; hotspot IEEE 802.16; WiMax IEEE 802.11; Wi-Fi

38-The IEEE standard ________ offers bandwidth transfer rates of 200 to 540 Mbps,
which makes it impractical because it exceeds the limits of most broadband connections
used by homes and small businesses.

802.11b 802.11n 802.11g 802.16

39-All of the following about wireless wide area networks (WWAN) are true EXCEPT:

When a device is At the center of each cell is a

The single WWAN
Most turned on, a SIM base station transceiver or cell
network standard insures
WWANs are card inside the tower that is used to send and
compatibility of handsets
cellular phone device identifies receive signals to and from
within and between
networks. itself to the mobile devices operating within
countries.
WWAN. the cell.
40-The major attributes that enable development of new applications that are possible only
in a mobile environment include all of the following EXCEPT:

Ubiquity Security Personalization Localization

41-The development of m-commerce is being driven by the following technological,

business, social, and economic factors EXCEPT:

The widespread
The improved The growth of a The transition to a
availability of more
price/performance of handset culture and manufacturing
powerful wireless
mobile services. mobile workforce. economy.
devices.

42-As in e-commerce, m-commerce B2C applications are concentrated in each of the

following areas EXCEPT:

retail shopping for targeted providing content for a fee

telecommunications
products and services advertising through mobile portals

43-The major enterprise mobile applications are all of the following EXCEPT:

logistics and e-mail and cell phone research and customer relations and sales
supply chain contacts development force automation

44-By enabling sales force employees to record orders in real time, the organization
benefits through each of the following EXCEPT:

lower clerical and more extensive collaboration

fewer data improved manufacturing
administrative and sharing of customer
entry errors. and delivery scheduling,
overhead. leads.

45-Mobile access supports the two functions of sales force mobilization and field service,
which extends the reach of ________ to both employees and business partners on a 24/7
basis to any place where recipients are located.

customer relationship vendor supply chain inventory

management management management management
46-One way to share information with supply chain partners is wireless ________, which is
the science of measuring physical phenomena such as temperature, volume, or an on/off
condition at a remote point and transmitting the value to a distant recorder or observer.

telemetry RFID mobilization osmosis

47-WiMax and 3G wireless mobile technologies offer telemedicine application

opportunities that include all of the following EXCEPT:

Reduced threat of
Real-time Wearable heart monitors Prescriptions can be
malpractice suits
consultation linked to a cell phone can transferred
because there is no
between a patient in automatically contact electronically to the
hands-on interaction
one location and a doctors or family appropriate pharmacy
between the remote
medical specialist in members at the first sign for a no-wait pick-up
physician and the
another. of health problems. by the patient.
patient.

48-All of the following are barriers to location-based m-commerce EXCEPT:

Consumers see constant There are presently not

Wireless The accuracy of location
location data enough location-based
bandwidth is technologies is often less
transmissions as a systems to make this a
limited. than consumers expect.
violation of privacy. viable technology.

49-The services provided through location-based m-commerce focus on key factors which
include all of the following EXCEPT:

Tracking, or
Geocaching, or Timing, or determining Navigation, or plotting
monitoring the
determining the the precise time at a a route from one
movement of a person
topography of an area. specific location location to another.
or thing.

50-A(n) ________ is a computer system capable of integrating, storing, editing, analyzing,

sharing, and displaying spatial information.

geographical information system on-star system l-commerce system global positioning system

51-You are walking near a coffee shop and suddenly your cell phone beeps with a message:
"Come inside and get a free biscotti with any purchase." This is an example of:
location-based m- customer relationship permission
advertising commerce management marketing

52-________ refers to the integration of computers and wireless communications in order

to improve information flow.

Remote telemetry E-911 Telematics Mobility

53-Many experts believe that the next major step in the evolution of computing will be
________ in which almost every object will have processing power and a wired or wireless
connection to a network.

universal computing mobile computing persistent computing pervasive computing

54-All of the following about RFID are true EXCEPT:

An RFID tag can hold 20 An RFID tag remains

times the amount of An RFID tag inactive until radio frequency An RFID
information a bar code can includes an energy from the tag's radio reader contains
hold, and the tag can be antenna and a chip transmitter hits its antenna, a radio
read through cardboard, with information giving the chip enough power transmitter and
wood, and plastic at a range about the item. to emit a 96-bit string of receiver.
of up to 100 feet. information.

55-One initiative underway that could lead to widespread support for the introduction of
RFID is the ________, which identifies the manufacturer, producer, version, and serial
number of each item and does not require line-of-sight contact to be read.

Smart Product Network Electronic Product Code Universal Product Code Sensor Network

Chapter 10 Dynamic Trading

1-The Internet provides an infrastructure for executing auctions with many more
participating sellers and buyers than with offline auctions, but administrative costs are
higher.

True False
2-In some types of auctions, sellers offer product; and in other types of auctions, buyers
post their product needs.

True False

3-Dynamic pricing refers to a transaction in which the price is not fixed, but fluctuates
based on current supply-and-demand relationships.

True False

4-Reverse auctions have two major purposes: liquidation and market efficiency.

True False

5-B2B reverse auctions are gaining popularity as an online mechanism for buying goods
and services.

True False

6-A popular type of auction model where there is one buyer and many potential sellers is
the "name-your price" model that was pioneered by eBay.com.

True False

7-An auction that takes place between sellers and buyers in one industry or for one
commodity is called a vertical auction because activity goes up and down the supply chain
in a single industry, rather than horizontally between members of supply chains in
different industries.

True False

8-Specialized sites for vertical auctions are referred to as auction vortals.

True False

9-Through e-auctions, sellers can gain more customer dollars by offering items directly
rather than through an expensive intermediary or by using an expensive physical auction.
True False

10-A major benefit of e-auctions is the reduced rate of fraud because of the openness of the
transaction.

True False

11-The "name-your-own-price" model is based on the fundamental concept of the

downward-sloping supply curve in which prices vary based on supply.

True False

12-Entering a high bid without ever planning to pay for the auction item is called sniping.

True False

13-In addition to auctions, dynamic prices can be determined by online negotiation, which
is the back-and-forth process of bargaining until a buyer and seller reach a mutually
agreeable price.

True False

14-Barter agents are software that can support the back-and-forth process of online
negotiation.

True False

15-Double-auction markets tend to generate competitive outcomes because a double

auction is an interactive market in which both buyers and sellers are competitive.

True False

16-Prices paid in online auctions are lower when auctions are an alternative selling channel
rather than an exclusive selling arrangement.

True False
17-Negotiating prices transfers the burden of determining prices to the market itself so the
resulting negotiated prices will always be fair and effective.

True False

18-Bid shielding is a type of e-auction fraud where sellers place phantom bidders to bid up
the price of items they are selling and hide (shield) low bids by actual potential buyers.

True False

19-Specialized authentication services are very effective and widely used to determine
whether an item is genuine and described correctly as a way to protect against counterfeit
products.

True False

20-Third-party escrow services are used for products valued at more than $200 to protect
both the buyer and seller when either the buyer or seller feels the need for additional
security.

True False

21-When a company decides to use auctions as a sales channel, one of the strategic issues in
B2B is the potential conflict with existing distributors and distribution channels. Therefore,
some companies use auctions only to liquidate obsolete, used, refurbished, or damaged
products.

True False

22-The process of building auction applications is easy because of intelligent agents and
other building tools.

True False

23-WineryExchange successfully auctioned grapes to wineries, which ended the tradition of

sales being based on established relationships between grape growers and wineries.

True False
24-Privacy is one of the benefits of mobile auctions because the Internet cell phone is more
private than a PC.

True False

25-Auctions may be used as a strategic tool by both online and offline companies.This type
of strategic alliance will be very popular due to its win win possibilities.

True False

26-Auctions are all of the following EXCEPT:

They are a
They are an established method They are suitable for They are a market
marketing
of commerce for generations. most consumer goods. mechanism.
channel.

27-Dynamic pricing refers to :

prices that are determined prices that are regulated by prices that prices that are
by market forces. government agencies. maximize revenue. negotiated.

28-________ work best with many buyers and many sellers.

Forward auctions Dynamic exchanges Reverse auctions Bartering

29-The ________ auction model is popular in B2B.

one buyer, many potential one-buyer, one- one seller, many potential many buyers, many
sellers seller buyers sellers

30-Two purposes of a type of ________ auctions are liquidation and market efficiency.

one buyer, many potential many buyers, many one-buyer, one- one seller, many potential
sellers sellers seller buyers
31-Reverse auctions are a type of ________ auctions.

one-buyer, one- one buyer, many potential many buyers, many one seller, many potential
seller sellers sellers buyers

32-The "name-your own-price" model pioneered by Priceline.com is a type of ________

auction.

many buyers, many one buyer, many potential one seller, many potential one-buyer, one-
sellers sellers buyers seller

33-Auctions done in exchanges or double auctions are ________ auctions.

many buyers, many one-buyer, one- one seller, many potential one buyer, many potential
sellers seller buyers sellers

34-A(n) ________ takes place between sellers and buyers in one industry or for one
commodity, such as flowers, cars, or cattle.

vertical auction exchange open auction negotiation vortal

35-All of the following are potential benefits from auctions to sellers EXCEPT:

sellers can liquidate large sellers receive valuable auctions can broaden the
sellers are always
quantities of obsolete price sensitivity customer base and
anonymous.
items very quickly. information. reduce cycle time.

36-In electronic auctions, near-perfect market information is available about prices,

products, current supply and demand, and so on. This feature provides benefits to
________.

sellers buyers buyers and sellers companies and individuals

37-Benefits of electronics auctions (e-auctions) to sellers include all of the following

EXCEPT:

Lower transaction and Larger reach and Removal of expensive

Anonymity
administrative costs increased revenues intermediaries
38-________ refers to the tendency of customers to stay at Web sites longer and come back
more often.

Loyalty Frequent purchase Stickiness High repeat

39-Limitations of e-auctions include all of the following EXCEPT:

Risk of fraud Higher order fulfillment costs Long cycle time Dynamic pricing

40-Research has shown that e-commerce sites that use an auction model tend to:

reach critical mass more quickly become fail more often than reach critical mass more
than catalog-order-based. liquid. other models. slowly than other models.

41-The first step in the auction process is:

preparing the arranging searching and registration and participants'

bids. financing. comparing. profiles.

42-Jackie uses a software system to place bids automatically on her behalf until her
predetermined maximum price is reached. The software bids in such a way as to minimize
the final bid. This is referred to as:

sniping. bidding agents. proxy bidding. pricing agents.

43-Compared to competitive markets, auction prices are often ________ when there are
multiple bidders.

the same higher lower dynamic

44-Compared to competitive markets, auction prices are often ________ when there are
very few bidders.

lower higher dynamic the same

45-The most serious disadvantage of e-auctions is:

logistics. payment delays. the risk of fraud. unreliable auction software.

46-The practice by sellers of having associates place fake bids in an auction as a way to
drive up the selling price is called:

bid shielding. bid fixing. shilling. sniping.

47-Bidders sometimes use phantom bidders to drive bid prices up rapidly at the beginning
of an auction, thus discouraging bidding from legitimate bidders. At the last minute, the
phantom bidders pull out, which awards the item to a very low bidding customer. This
practice is called:

shilling. sniping. bid fixing. bid shielding.

48-John wants to know if the first edition novel he just purchased through an e-auction is
actually a first edition. The auction host helps him locate an expert that will tell him
whether the novel is a genuine first edition or a fake. This is an example of:

certification. authentication. verification. integrity.

49-A major shortcoming with authentication services is:

two different authenticators

it is impossible to tell dishonest most auction sites
may come up with different
whether many items authenticators are the forbid the use of
opinions regarding the
are reproductions or primary sources of authentication
authenticity and description
genuine. fraud on the Internet. services.
of a given item.

50-Many companies use intermediaries or trading assistants instead of implementing e-

auctions themselves for each of the following reasons EXCEPT:

To avoid tax To bring many Costs of auction intermediaries or

The company name is
and legal more buyers to the assistants are less than the costs of
not widely recognized.
fees. auction. physical auctions.

51-Each of the following is one of the three major categories of auction rules EXCEPT:
timing rules clearing rules bidding rules information-revelation rules.

52-Each of the following is true about auction rules EXCEPT:

Rules eliminate Rules are intended to The success of

Auction rules vary from
conflicts with existing smooth the auction auctions depends on
country to country due to
distributors and mechanism and to complying with
legal considerations.
distribution channels. prevent fraud. auction rules.

53-The process of building auction applications is complex for all of the following reasons
EXCEPT:

auctions must be the number of auctions must be integrated with auctions must
integrated with the needed features can the legacy systems of provide payment
back-end offices. be very large. participating companies. systems.

54-Many auction sites are implementing ________ because of the significant increase in the
number of users who browse the Internet wirelessly.

m-commerce applications instant message notification authentication vortals

55-The limitations of mobile auctions are all of the following EXCEPT:

Internet cell Internet-enabled Wireless systems Portable devices are small and
phones are less phones have limited are not as safe as may have a problem showing
private than a PC. memory capacity wireline ones. pictures of auction items.

Chapter 11 E-Commerce Security

1-Fraud refers to a business activity that relies on force or threats to deprive a person or
company of property or other assets.

True False

2-The trend in online crimes shows that most new scammers and other con artists are not
computer geniuses.
True False

3-Identity theft has become the primary concern of online shoppers.

True False

4-Defending against online cons and compensating for the damages caused by identity
thieves have significantly increased the costs of EC.

True False

5-To minimize the risk of fraud from phishing and crimeware, EC retailers need to
authenticate the buyer.

True False

6-An EC security strategy consists of firewalls and other types of technology to prevent and
detect unauthorized use of the organization's brand, identity, Web site, e-mail, information,
or other asset.

True False

7-Information assurance broadly refers to the protection of information systems against

unauthorized access to information, unauthorized modification of information, and denial
of service to authorized users.

True False

8-The EC industry ranks security over convenience. So the EC industry strives to enforce
safeguards, such as passwords for credit card transactions, that make online shopping
safer even if those safeguards make it more inconvenient for customers.

True False

9-Credit card issuers want to cooperate and share leads on criminal activity with each
other and law enforcement even though prosecution with an uncertain outcome.
True False

10-Most U.S. Web hosting providers log all activity so, in most cases, they can identify the
source IP address and source ISP with timestamps and other identifying information.

True False

11-Requiring stronger EC standards and information sharing by the credit card companies
would not fix the security problems facing online retailers and shoppers.

True False

12-Spammers use zombie computers to distribute spam because it is both cheaper and less
risky.

True False

13-According to the Mitre Corporation's list of Common Vulnerabilities and Exposures, two
of the top five reported vulnerabilities were within Web applications.

True False

14-The legal standard of due care requires that a company take reasonable care to defend
against risks affecting its EC business and online transactions.

True False

15-Because of the lack of source authentication and data integrity checking in DNS
operations, Internet services are vulnerable to attacks.

True False

16-Experts believe that a strict e-business risk management program that was rigorously
managed could not have prevented many of the data breaches.

True False
17-EC security programs have a life cycle during which their EC security requirements
must be evaluated and adjusted annually.

True False

18-According to the CIA security triad, the success and security of EC depends on the
confidentiality, integrity, and accessibility of information and the business Web site.

True False

19-Nonrepudiation is closely associated with authentication and assures that an online

customer or trading partner cannot falsely deny their purchase or transaction.

True False

20-The FTC, SEC and other government agencies cannot impose harsh penalties on
companies whose confidential data has been breached unless a company employee caused
the breach.

True False

21-Phishing attacks rely on social engineering, which is a nontechnical attack that uses
something to trick users into revealing information or performing an action that
compromises a computer or network.

True False

22-The time-to-exploitation, which is the elapsed time between when a vulnerability is

discovered and the time it is exploited, of most sophisticated spyware and worms has
decreased from several months to a few weeks.

True False

23-Unlike denial of service (DOS) attacks, botnet attacks are less dangerous because they
cannot disrupt a web site or EC application.

True False
24-The ability of a biometric system to identify a person depends on the existence of
database of enrolled users that is searched for a match based on the person's biometric
trait.

True False

25-Virtual private networks (VPNs) are a special category of software that can monitor
activity across a network or on a host computer, watch for suspicious activity, and take
automated action based on what it sees.

True False

26-The incidence of online fraud and identify theft has increased for each of the following
reasons except:

New effective phishing Scammers outsourcing Growth in EC sales

Information is today's
scams and schemes work to programmers to and the number of
most valuable form of
being carried out by seize control of computers shoppers with
international currency.
computer experts. or wireless networks. higher incomes.

27-Cyber cons have a negative effect on EC because

con companies cannot expand a majority of potential

defending against these
artists their e-business to other customers do not shop
cons and compensating for
have countries with online because they are too
damages significantly
gone underdeveloped legal afraid of fraud to trust
increase the costs of EC.
low-tech. systems. online merchants.

28-The U.S. agencies dedicated to eliminating fraud resulting from phishing and crimeware
are:

The High-Tech Crime The High-Tech Crime The Computer Security

The Group of Network, Anti- Network, Anti-Phishing Institute, High-Tech
Eight, VeriSign, Phishing Working Working Group, and Crime Network, and
and NameProtect. Group, and Internet Federal Trade Anti-Phishing Working
Research Lab. Commission. Group.

29-________ is a crimeware technique used to steal the identity of target companies to get
the identities of their customers.
Social engineering. Phishing. Pretexting. Spamming.

30-Where do a huge majority, possibly as high as 95 percent, of hackers reside?

Turkey, China, Romania, or Russia, India, Germany, or In the G8 In South

Brazil. Argentina. countries. America.

31-The key reasons why EC criminals cannot be stopped include each of the following
except:

Lack of cooperation Strong EC security makes Online shoppers do not

Sophisticated hackers
from credit card online shopping take necessary
use browsers to crack
issuers and foreign inconvenient and precautions to avoid
into Web sites.
ISPs. demanding on customers. becoming a victim.

32-It is currently known that if a front-end application such as a Web site is effectively
secured, then

the data itself may not

the data itself is secure the data itself may not be
the data itself be secure because back-
because web applications secure because the
is secured by end databases may not
are not targeted by application may not
firewalls. function as
attackers. function as planned.
planned.

33-A vulnerability

is the estimated cost, loss, is a weakness in software or

is a is the probability
or damage that can result if other mechanisms that a hacker
software that a weakness will
a threat exploits a can use directly to gain access to
bug. be known and used.
vulnerability. a system or network.

34-The underlying reasons why a comprehensive EC security strategy is needed include all
of the following except:

The Internet was designed Many companies fail to

Managers The shift
for maximum efficiency implement basic IT security
treating EC toward profit-
without regard for its management best practices,
security as a motivated
security or users with business continuity plans, and
process. crimes.
malicious intent. disaster recovery plans.
35-The protection of information systems against unauthorized access to or modification of
information that is stored, processed, or being sent over a network is referred to as
________.

Information defense. Information security triad. Information integrity. Information assurance.

36-The success and security of EC depends on the ________ of information and the
business Web site.

authentication, encryption, quality,

confidentiality, integrity,
authorization, and functionality, and reliability, and
and availability
nonrepudiation privacy speed

37-The basic security concepts relating to customers and other users are:

authorization, information assurance, authentication, confidentiality,

nonrepudiation, and confidentiality, and authorization, and integrity, and
information assurance. authentication. nonrepudiation. availability.

38-Digital signatures or digital certificates:

are used to validate the sender and time have been

provide complete a
stamp of the transaction so it cannot be compromised by
confidence that the and
later claimed that the transaction was phishers and
transactions are secure. b
unauthorized or invalid. spammers.

39-The most cost-effective approach to EC security is to develop and implement a strategy

that

requires digital depends on the proactively meets protects against

signatures or digital trust and regulatory, financial, unauthorized transactions
certificates for all confidence of marketing and and overrides of
transactions. customers. operational requirements. accounting controls.

40-To be effective, an acceptable use policy (AUP) needs

to specify rules for to inform all users of their to be written by to be incorporated

firewalls, access control responsibilities when using the company's into business
lists, monitoring, and company networks, computer legal department. projects and
intrusion detection equipment, wireless devices, and proposals.
systems. customer data.

41-In 2005, human error was responsible for almost ________ percent information security
breaches in organizations.

40 10 20 60

42-Which of the following statements about hardware and software security defenses is
false?

After the EC security

program and policies are
defined and risk assessment
completed, then the software
and hardware needed to
support and enforce them can
be put in place.
If firewalls and
Hardware and software There is no
antivirus software are
security defenses protect single hardware
not upgraded and
against irresponsible or software
monitored
business practices or solution for all
constantly, they will
corrupt management. companies.
not remain useful.

43-Social engineering attacks are:

no longer considered to be take advantage of Web

are a combination an example of
serious Internet threats due 2.0 applications like
of technical and technical attacks
to the increased security of social networking sites,
nontechnical requiring software or
MySpace, LinkedIn, and blogs, wikis and RSS
attacks. systems knowledge.
YouTube. feeds.

44-A technique known as web page hijacking

downloads what appears to

enables a malicious Web causes a high
be an "important enables online
master to displace the volume of
document," but which gambling that are
pages of an EC Web site in search engine
contains a trojan, a actually fronts for
the Search Engine Results traffic similar to
program that gives the international money
Pages (SERPS) to redirect a denial of
sender control of the laundering operations.
customers to another site. service attack.
infected machine.

45-A botnet is:

 a collection of a few
a piece of software
hundred hijacked Internet
code that inserts
computers that have been
itself into a host or
set up to forward traffic,
operating system to
including spam and viruses,
launch DOS
to other computers on the
attacks.
Internet.
a coordinated network
a piece of code in a
of computers that can
worm that spreads
scan for and
rapidly and exploits
compromise other
some known
computers and launch
vulnerability.
DOS attacks.

46-Which technologies are designed and used to secure EC communications across a

network?

Plastic cards with magnetic

PINs, cryptocards, AUPs, ACLs, Access control lists,
strips, intrusion detection
and point-of-sale and network tokens, passwords, and
systems, and progressive
systems. login IDs. biometric systems.
tokens.

47-Public key infrastructure (PKI) is an authentication method

that is based on the Data

that encrypts and that uses that has become the
Encryption Standard, which is
decrypts large encryption keys cornerstone for secure
the standard symmetric
amounts of data ranging from 64 e-payments and
encryption algorithm supported
effectively. bits to 128 bits. intranet applications.
by U.S. government agencies.

48-Secure Socket Layer (SSL), which is also known as Transport Layer Security (TLS):

is designed to is one of the major was invented by Microsoft to

has been
handle all steps in generally accepted use standard certificates for
replaced by
the validation of protocols for securing e- authentication and data
certificate
credit card commerce used by encryption to ensure privacy or
authorities.
numbers. Microsoft and Netscape. confidentiality.

49-Access to a network ought to be based on:

the policy of least privilege the policy of

role-specific security the policy of need-to-
where access to network acceptable use
protocols where know where access
resources are blocked and where access is
access is limited by a by all non-employees
permitted only when needed restricted by the
user's level of trust. is blocked.
to conduct business. firewall.
50-Which of the following does not correctly describe what firewalls protect against?

Some programs have

bugs or special Spammers often use SMTP
Remote logins occur Macros are the
features that create session hijacking to redirect e-
when an unauthorized electronic
application mail through the SMTP server
users connects to a PC equivalent of
backdoors, which of an unsuspecting host, which
and gains control of it. junk mail.
allowing for remote helps hide their identity.
access.

51-Firewalls that filter requests from the Internet to a private network based on the IP
address of the computer sending or receiving those requests are called:

packet-filtering routers. application-level proxies. bastion gateways. IP blockers.

52-All of the following are important security functions of proxy servers except:

They improve They hide the IP addresses They help control They help control
network of a company's internal outbound traffic to a inbound traffic to a
performance. computers. network. network.

53-The advantages of virtual private networks (VPN) for data communications include all
of the following except:

They can reduce They are less They ensure the Remote users can use
communication costs expensive than confidentiality and broadband connections
dramatically because private leased lines integrity of the data rather than make long
VPN equipment is because they use the transmitted over the distance calls to access
cheaper than other public Internet to Internet without an organization's
remote solutions. carry information. requiring encyption. private network.

54-A host-based intrusion detection system (IDS):

Resides on the server that is Consists of information

Can perform certain Uses rules to
being monitored where it system resources–
actions when an analyze suspicious
can detect whether critical firewalls, routers, Web
attack occurs, such activity at the
or security-related files have servers, database
as terminating perimeter of a
been tampered with or servers, and files that
network connections network or at key
whether a user has look like production
based on security locations in the
attempted to access files that systems, but do no real
policies. network
he or she is not authorized to work.
use.

55-In the United States, which the federal laws place legal limits on monitoring activity?

The Wiretap The Wiretap Act and the The Computer Fraud and The USA
Act and Pen Register, Trap, and Abuse Act (CFAA) and the PATRIOT Act
CFAA Trace Devices statute First Amendment. and CFAA

Chapter 12 Electronic Payment Systems

1-E-payment systems that require the payer to install specialized security software have
proven more likely to succeed.

True False

2-The success of an e-payment method depends on its interoperability with existing

enterprise systems and applications.

True False

3-To succeed, special e-payment methods, such as e-cash, have to maintain anonymity.

True False

4-E-payment methods that can address the lower or higher end of the price continuum is
unlikely to be widely accepted because of cost and security issues.

True False

5-Credit cards and charge cards are e payment instruments that allow the holder to make
purchases up to a fixed limit and charges interest each month on unpaid balances.

True False

6-In the settlement process, the systems must determine whether a buyer's card is active
and whether the cardholder has sufficient funds available for the purchase.
True False

7-With a debit card, the money for a purchased item comes directly out of the holder's
checking account with the actual transfer of funds from the holder's account to the
merchant's taking place within one to two days.

True False

8-The processing of card payments has two major phases: identification and settlement.

True False

9-In the authorization process, the systems determines whether a buyer's card is active and
the customer has sufficient available credit line or funds.

True False

10-For a given type of payment card and processing system, the processes and participants
are essentially the same for off-line (card present) and online (card not present) purchases.

True False

11-CyberSource and VeriSign are payment processing services that provide connectivity
among merchants, customers, and financial networks that enable authorization and
payments.

True False

12-In the online world, merchants are not held liable for fraudulent transactions.

True False

13-Recent surveys by CyberSource indicate that fraudulent card transactions are a

growing problem for online merchants in spite of their increasing efforts to combat fraud
despite improved anti-fraud measures.

True False
14-Because of their visibility and large sales volumes, larger firms were more susceptible to
fraud than smaller firms were.

True False

15-One problem with the Address Verification System (AVS) for fraud prevention is the
number of false positives, meaning that the merchant rejects a valid order. One reason for
these rejects is simply that cardholders make mistakes in inputting their addresses or zip
codes.

True False

16-One impact of anti-fraud tools is that merchants are rejecting a significant number of
both valid and invalid orders due to suspicion of fraud.

True False

17-With virtual credit cards, the issuer must create a new credit card number for every
purchase.

True False

18-In most cases, smart cards are more secure than credit cards and can be extended with
other payment services. In the retail arena, many of these services are aimed at those
establishments where payments are usually made in cash and speed and convenience are
important.

True False

19-Stored-value cards are being marketed heavily to the those who do not have credit cards
or do not have bank accounts, specifically people with low incomes, young adults, seniors,
immigrants, minorities, and others.

True False
20-Regardless of the vendor's point of view, there is substantial evidence, at least in the
offline world, that consumers are not willing to use their credit or debit cards for
micropayments under $5 to minimize security risks.

True False

21-E-checks rely on current business and banking practices and can be used by any sized
business that has a checking account, credit card, and debit card.

True False

22-From the perspective of the billing firm, two advantages of e-billing are the reduction in
expenses related to billing and processing payments and the ability for advertising
customized to each individual customer.

True False

23-EIPP is the process by which companies present invoices and make payments to one
another.

True False

24-With letters of credit, credit risk is reduced because payment is accessed via the
creditworthiness of the issuing bank.

True False

25-Research shows that state and local governments are losing more than $100 billion per
year in sales tax revenue on items purchased over the Internet.

True False

26-Factors that come into play in determining whether a particular method of e-payment
achieves critical mass include all of the following EXCEPT:

the degree of interoperability with other

full traceability of hardware and software
security of the enterprise systems and
the buyers. independence.
transfer. applications
27-A card that draws the payment amount directly from the user's checking account is
called a(n):

e-payment card. charge card credit card. debit card

28-A payment card that provides the holder with credit to make purchases up to a limit
fixed by the card company and charges relatively high interest rates on unpaid balances is
the:

e-payment card. charge card. credit card. debit card.

29-The process of determining whether a card is active and whether the customer has
sufficient funds for the purchase is called:

settlement. authorization. approval. procurement.

30-The transfer of money from the buyer's to the seller's account is called:

authorization. approval. settlement. procurement.

31-________ offer Internet Merchant Accounts, which are special accounts for credit card
authorization and payment processing.

Payment processing services Credit card associations Issuing banks Acquiring banks

32-________ are financial institutions that provides a customer with a payment card.

Acquiring banks Payment processing services Issuing banks Credit card associations

33-________ provide connectivity among merchants, customers, and financial networks

enabling authorization and payments is called the:

Credit card associations Payment processing services Acquiring banks Issuing banks

34-________ are small online payments typically under US$10:

E-smart payments E-micropayments E-minipayments E-cash

35-An advantage of e-checks is that they:

operate outside the involve complex contain much more fit current business
traditional banking internal processing information then practices, and so require
industry. systems. traditional paper checks. little process reengineering.

36-The nationwide batch-oriented electronic funds transfer system that provides for
interbank clearing of electronic payments for participating financial institutions is called
the:

Automated Federal
electronic bill presentment Receiving Depository
Clearinghouse Reserve
and payment network. Financial Institution
Network. System.

37-Each of the following are ways to pay bills over the Internet EXCEPT:

biller direct. bill consolidator. customer service provider. online banking.

38-From the perspective of the billing firm, all of the following are advantages of e-billing
EXCEPT:

reduced processing universal opportunity for targeted improved customer

expense. availability. advertising. service.

39-From the perspective of the customer, all of the following are advantages of e-billing
EXCEPT:

greater security than other simplifies and centralizes makes record lower
types of payments. payment processing. keeping easier. costs.

40-Characteristics of B2B payments include all of the following EXCEPT:

They are more likely to

They require less They are much They are significantly
involve disputes that
rigor and security larger than payments more complex than
require significant rework
than B2C payments. by individuals. payments by individuals.
to resolve.
41-B2B payments are part of a much larger financial supply chain that includes all of the
following EXCEPT:

payment authorization. contract administration. procurement. financial reporting.

42-In financial supply chain management, the goal is to optimize all of the following
EXCEPT:

accounts receivable the physical supply chain accounts payable financial risks

43-Unlike the physical supply chain, ________ characterize the financial supply chains of
most companies.

greater accuracy efficiencies transparency inefficiencies

44-The vast majority of B2B payments are:

electronic made using electronic funds made with letters of still made by paper
payments. transfer (EFT) credit. check.

45-Barriers inhibiting B2B electronic payment include all of the following EXCEPT:

strict standard
a lack of integration of inability of trading partners to send
formats for a shortage
payment and or receive electronic payments with
remittance of IT staff.
accounting systems. sufficient remittance information.
information.

46-The process by which companies present invoices and make payments to one another
through the Internet is known as:

enterprise invoice presentment online accounts electronic data online accounts

and payment. payable. interchange. receivable.

47-For many firms, presentment and payment processes are all of the following EXCEPT:

costly. time consuming. error-prone. secure.

48-According to a survey by Credit Research Foundation, the major reasons companies
turn to EIPP solutions are all of the following EXCEPT:

elimination of better customer service for improved data that can lower improved
billing disputes billing and remittance. invoice processing costs. cash flow.

49-________ is an EIPP many-to-many model with a third party acting as an intermediary,

collecting or aggregating invoices from multiple sellers and payments from multiple buyers.

ACH network Seller direct Buyer direct Consolidator

50-Among the forms of online B2B payments, ________ is second only to ACH in terms of
frequency of use.

letters of credit purchasing cards CTX Fedwire, or wire transfer

51-All of the following are advantages of using purchase cards EXCEPT:

purchasing departments bills are consolidated improved they are widely accepted in
report productivity gains. into a single payment. control. international trade.

52-In global trade, a ________ is a written agreement by a bank to pay the seller, on
account of the buyer, a sum of money upon presentation of certain documents.

letter of credit micropayment bank check trade card payment

53-All of the following are benefits of letters of credit (LCs) EXCEPT:

Payment is assured Credit risk is reduced because Political risk is reduced

LCs are cheap
if all the terms in the payment is accessed via the if the LC is confirmed
and easy to
LC are complied creditworthiness of the issuing by a bank in the seller's
establish.
with. bank. country.

54-The current Internet sales tax moratorium in the United States applies to:

all retail sales all B2B clothing, food, and all sales made over the Internet if the
made over the sales pharmaceuticals only. seller has no physical presence in the
Internet. only. state where the buyer lives.

55-Many B2C and B2B businesses rely on specialized third-party software and services to
calculate the taxes associated with a sale because:

of the they verify shipping tax laws rarely of government

complexities. addresses. change. regulations.

Chapter 13 Order Fulfillment

1-The implementation of most EC applications requires the use of support services.

True False

2-Amazon.com initially operated as a totally virtual company, but had to add physical
warehouses with thousands of employees in order to expedite deliveries and reduce order
fulfillment costs.

True False

3-Both EC and traditional retailing are based on the concept of "pull" operations that
begin with an order from a customer.

True False

4-Order fulfillment involves activities such as providing customers with what they have
ordered, delivering orders on time, and providing all related customer services.

True False

5-Front-office operations are the activities that support fulfillment of orders, such as
packing, delivery, accounting, and logistics.

True False
6-Back-office operations are the operations involved in the efficient and effective flow and
storage of goods, services, and related information from point of origin to point of
consumption.

True False

7-The EC order fulfillment process begins when an order is received and verified as being a
real order.

True False

8-In B2C, customers usually validate that they will pay by prepaying using a credit card.

True False

9-When a customer returns items that have been ordered, the series of activities involved in
that return are called return logistics.

True False

10-The order fulfillment processes for B2B and B2C activities are similar.

True False

11-The major difference between e-logistics and traditional logistics is that traditional
logistics deal with the movement of large amounts of materials to a few destinations. E-
logistics shipments typically are small parcels sent to many customers' homes.

True False

12-The inability to deliver products on time is a typical problem in both off-line and online
commerce.

True False

13-The chance of supply chain problems, such as shipping the wrong items, is lower for EC
than for off-line commerce because of more advanced logistics support.
True False

14-Supply chain problems, such as errors in demand forecasting, jeopardize order

fulfillment.

True False

15-Many problems along the EC supply chain stem from two sources: uncertainties in
forecasting demand and the need to coordinate several activities, internal units, and
business partners.

True False

16-Uncertainties in delivery time are a major cause of order fulfillment problems. RFID
can help by locating shipments in real time to minimize delays and enhance customer
service.

True False

17-The B2C order-taking process can be improved when it is done via EDI, EDI/Internet,
the Internet, or an extranet.

True False

18-B2C fulfillment may be more complex than that of B2B because it has at least six
dimensions of complexity rather than only two.

True False

19-High delivery costs are justified only if there is a high concentration of orders from
customers located in close proximity or if the value of the order is large enough.

True False

20-Delivery-value density is a decision support tool that helps determine whether it is

economical to deliver goods to a neighborhood area in one trip. The lower the density value,
the better.
True False

21-According to researchers, culture, top management commitment, and technology

infrastructure lead to CRM success.

True False

22-The integration of ERP and CRM must include low-level data synchronization as well
as business process integration so that the integrity of business roles can be maintained
across systems and workflow tasks can pass between the systems.

True False

23-Benefits of CRM analytics lead to better customer relations in terms of sales and service,
better marketing strategies, lower inventory, and faster delivery. To derive these benefits, it
is necessary to properly collect and analyze relevant customer data.

True False

24-The primary customer-facing applications that support eCRM are self-tracking, FAQs,
and self-configuration.

True False

25-Data mining is an important analytic activity that involves sifting through an immense
amount of data to discover previously unknown patterns that can guide improvements in
order-fulfillment and CRM efforts.

True False

26-The implementation of most EC applications requires the use of all of the following
support services EXCEPT:

infrastructure and technology security manufacturing order fulfillment, delivery, and payment

27-Most EC applications are based on ________ that begin with an order, frequently a
________ order.
pull operations; push operations; push operations; pull operations;
standard customized standard customized

28-All services related to making sure a customer gets what he/she ordered within an
acceptable amount of time is called:

logistics. order fulfillment. front-office operations. back-office operations.

29-Packing, delivery, accounting and logistics are examples of:

logistics. back-office operations. front-office operations. order fulfillment.

30-Customer-facing activities or ________ are activities, such as advertising and order

taking, that are visible to customers.

back-office operations order fulfillment logistics front-office operations

31-The Council of Supply Chain Management Professionals defines ________ as "the

process of planning, implementing, and controlling the efficient and effective flow and
storage of goods, services, and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements."

front-office operations back-office operations order fulfillment logistics

32-A typical EC fulfillment process involves all of the following activities EXCEPT:

Checking for in-stock Just-in-time inventory Making sure the Replenishment and
availability. management. customer will pay. returns.

33-The administrative activities of order taking and fulfillment involve all of the following
activities EXCEPT:

sales quote. shipment release. order acknowledgment. accounts payable.

34-The major difference between e-logistics and traditional logistics is:

e-logistics deals with the traditional logistics deals traditional logistics e-logistics
movement of large with movement of large applies only to outsources all
amounts of materials to a amounts of materials to a manufacturers. logistics
few destinations. few destinations. functions.

35-The inability to deliver products on time is a typical problem:

in traditional logistics only in global operations, but it is

in both off-line unique to e-
because the problem has been rarely a problem in domestic
and e-commerce. commerce.
solved in e-commerce. operations.

36-________ are a major source of uncertainty in supply chains.

Internal manufacturing Demand Inventory delivery Foreign currency

schedules forecasts schedules exchange rates

37-________ helps locate shipments in real time to minimize delays and enhance customer
service.

3PL RFID ERP CRM

38-Solutions to problems in the supply chain for EC companies are:

critical during start-up but so complex that most

usually unique generic across both
usually become manageable and EC companies cannot
for each EC EC and traditional
insignificant as EC companies afford to implement
company. companies.
mature. them.

39-Improvements in EC order-taking:

may come from within the

are accomplished are accomplished organization, from are accomplished
solely through solely through improved links with solely through
implementing linkages improvements within logistics, and through improved links with
with payment systems. the organization. linkages with payment logistics.
systems.
40-________ are useful in reducing inventory and decreasing the incidence of out-of-stocks.
Such systems also are useful in maintaining an inventory of repair items so repairs can be
expedited.

ERP Warehouse management Replenishment Stockkeeping unit

systems systems systems systems

41-Automated warehouses for B2C companies are designed:

to facilitate the delivery to facilitate the delivery to accommodate much to help transition
of small quantities of of large quantities of larger inventory levels B2C companies
product to a very large product to a small than traditional into B2B
number of customers. number of customers. warehouses. companies.

42-________ are intermediaries that prepare goods for shipping on air carriers, trucks, or
other transport means.

Forwarders Outsourcers Expediters Shippers

43-All of the following apply to global logistics systems EXCEPT:

An increase in The number of partners in such These systems are Order fulfillment
global trading situations is larger, which secure when the problems tend to be
created a need for increases the need for Internet is the even larger in longer
an effective global coordination, communication, centric technology supply chains that
logistic system. and collaboration. platform. cross country borders.

44-The second most often cited reason for customers not buying on the Web is:

not being able to see or try concern that ordered

the lack of a good concerns
on a product before buying products won't be delivered
return mechanism. about fraud.
it. on time.

45-________ is an innovative order fulfillment strategy in which components for a product

come from two or more physical locations.

Leveraged shipments Merge-in-transit Order postponement Rolling warehouse

46-A decision support tool that helps determine whether it is economical to deliver goods to
a neighborhood area in one trip is:

CRM model. ERP model. SCM analysis. delivery-value density.

47-________ recognizes that ________ are the core of a business and that a company's
success depends on effectively managing its relationships with them

Customer relationship Vendor relationship Partner relationship Supplier relationship

management; customers management; vendor management; partners management; suppliers

48-Major limitations of CRM include all of the following EXCEPT:

it is difficult to it requires integration with a

it is difficult to support it is difficult to
justify the company's other information
mobile employees with develop competitive
expense of systems, which may be
some CRM applications. CRM applications.
CRM. difficult and expensive.

49-Metrics in customer service and CRM include all of the following EXCEPT:

site availability. on-time order fulfillment. product quality. response time.

50-Data analytics are a valuable tool because it can provide all of the following EXCEPT:

what-if scenarios. financial reporting customer segmentation groupings. profitability analysis.

51-Medium and large corporations organize and store data in a central repository called
a(n) ________ so that it will be easy to analyze later on, when needed.

knowledge system data base expert system data warehouse

52-Automating inquiry routing and answering queries requires ________ which can be
generated from historical data and from human expertise and stored for use whenever
needed.

knowledge forecasts analytics information

53-To overcome the problem of finding buyers or sellers online, a company may use
________ such as B2Business.net or Yahoo! Small Business.

intelligent agents search engines directory services industry-focused newsletters

54-TRUSTe, BBBOnline, and Ernst & Young's trust service are used both in B2C and B2B
for all of the following reasons EXCEPT:

One cannot touch the Trust is critical Companies must outsource Buyers may not be
seller's products. for EC. trust services. known to sellers.

55-The major reasons why many companies prefer to outsource some of the support
services include all of the following EXCEPT:

Lack of experience or The desire to For a sustainable The need to have

resources needed for many of concentrate on the competitive services up and
the support services. core business. advantage. running rapidly.

Chapter 14 E-Commerce Strategy and

Global EC
1-Strategies are based on performance indexes that are used as targets and measures of
success.

True False

2-An organizational strategy is a detailed plan for how a business is going to accomplish its
mission, what its goals should be, and what plans and policies it will need to accomplish
these goals.

True False

3-Any contemporary strategy-setting process must include the Internet.

True False
4-In Porter's view, the majority of the Internet's impacts on the five competitive forces
have been positive.

True False

5-Researchers have suggested that more extensive strategic information systems planning
in an uncertain environment produces greater planning success.

True False

6-No matter how large or how small the organization, the strategic planning process forces
corporate executives, a company's general manager, or a small business owner to assess the
current position of the firm, where it should be, and how to get from here to there.

True False

7-In the strategy initiation phase, the organization examines itself, its environment, and the
potential contribution that the Internet and other emerging technologies can make to the
business.

True False

8-A value proposition is actually a financial statement that summarizes the annual revenue
and profit targets.

True False

9-The two major and successful Internet-based businesses Google and eBay have similar
core competencies.

True False

10-SWOT analysis is one method for scanning the business environment to collect and
interpret relevant information about direct competitors, indirect competitors, and potential
competitors.

True False
11-In the strategy implementation phase, general long-term plans are developed for
carrying out the projects that had been agreed on in the strategy formulation phase.

True False

12-Resource allocation refers to the processes of making the selected applications and
projects a reality, such as hiring staff; purchasing equipment; licensing, purchasing, or
writing software; and contracting vendors.

True False

13-Strategy assessment is the continuous evaluation of progress toward the organization's

strategic goals, resulting in corrective action and, if necessary, strategy reformulation.

True False

14-The basic method in scenario planning is that a group of analysts generates simulation
games for policy makers. The games combine projected factors about the future, such as
demographics, geography, and industrial information with plausible alternative social,
technical, economic, and political trends.

True False

15-A business plan is a tool that is an alternative to narrowly focused financial assessments
by measuring organizational performance in four areas: finance, customers' assessments,
internal business processes, and learning and growth.

True False

16-The primary reasons for writing a business plan are to acquire funding and
nonfinancial resources, to recruit senior management, and to force the business owner to
think ahead, set achievable goals, seek out and analyze competitors.

True False

17-Entrepreneurs in start-up companies use business plans to get funding from investors,
such as a venture capitalist or a bank.
True False

18-The information systems strategy is set primarily by determining what information and
associated information systems are required to carry out the business strategy.

True False

19-In e-commerce, evidence shows that there is always a real advantage to being the first
mover in an industry or market segment.

True False

20-The disadvantages a brick-and-mortar company faces by creating an independent

division are that it may be very costly, risky, or both.

True False

21-Disposing of excess equipment was the motivation behind the implementation of

forward e-auctions at General Motors. This is an example of a technology-driven strategy
because GM had a specific problem that an EC application could solve.

True False

22-In a click-and-mortar business, the allocation of resources between off-line and online
activities can create difficulties, especially in sell-side projects because the two activities
could be competitors.

True False

23-Having a strong project champion on an e-commerce project is seldom important to the

success of the project because of inter-personal conflicts caused by a powerful champion.

True False

24-The purpose of GlobalNetXchange, which was founded by major retailers such as Sears,
was to reduce procurement costs and product prices for its members while making the
purchase process more efficient.
True False

25-At the implementation stage, firms may need to dramatically change business processes
to accommodate the changes an EC strategy brings. In those instances, business process
reengineering (BPR) is usually necessary.

True False

26-For ________ companies, it may be even more important to change strategies quickly.

service retail traditional pure play

27-Capabilities of the Internet that have made it more difficult for companies to capture
profits include all of the following EXCEPT:

The Internet reduces the The Internet allows buyers

The Internet makes The Internet makes
difficulty of purchasing, and sellers to find and
information widely it easier to make
marketing, and transact business with one
available. secure payments.
distribution. another more easily.

28-Projections of the business technological, political, economic, and other environments

are called:

competitive intelligence value propositions forecasts. SWOT analysis

29-The unique combination of resources, experiences, and expertise within a particular

firm is called their:

corporate strategy. competitive advantage. functional strategy. core competencies.

30-All of the following are elements of a company's strategy EXCEPT:

forecasts. day-to-day operations. competitor analysis. company analysis.

31-All of the following about the strategic planning process are true EXCEPT:

The process of The strategic The strategic planning process The strategic
developing a planning process forces corporate executives, a planning process
strategy maybe is cyclical and company's general manager, or a begins with
even more continuous. small business owner to assess the strategy
important than the current position of the firm, where it formulation.
strategy. should be, and how to achieve
objectives.

32-A specific outcome of the strategy initiation phase is the ________, which includes the
vision, mission, value proposition, goals, capabilities, constraints, strengths, and
weaknesses of the company

functional strategy core competency company analysis value proposition

33-A specific outcome of the strategy initiation phase is a clear statement of the company's
________, which summarizes the customer segment, competitor target, and the core
differentiation of one's product from the offerings of competitors.

functional strategy core competency value proposition company analysis

34-Google's ________ is its expertise in information search technology.

core competency company analysis functional strategy value proposition

35-Many of the outcomes from the first two phases of the strategic planning process, such
as a determination of goals, competitor analysis, strategic opportunities, and risk analysis
come together in a ________.

SWOT plan technology audit value proposition business plan

36-________ is the process of making the selected applications and projects a reality by
hiring staff; purchasing equipment; licensing, purchasing, or writing software; and
contracting vendors.

Strategy assessment Project management Resource allocation Project planning

37-An analytical tool in which a company looks for points of differentiation between
competitors and itself is called:
competitor analysis grid strategy assessment scenario planning SWOT analysis

38-________ is the continuous evaluation of progress toward the organization's strategic

goals, resulting in corrective action and, if necessary, strategy reformulation.

Strategy assessment Competitor analysis grid Scenario planning SWOT analysis

39-A management tool that assesses organizational progress toward strategic goals by
measuring performance in a number of different area is:

SWOT analysis. balanced scorecard. Web analytics. BCG growth-share matrix.

40-After four years in business, a magazine publisher decides to add the online distribution
of its magazine to its existing traditional publishing business. The company would need to
develop a:

business case. business strategy. business plan. business metric.

41-All of the following are situations when a business plan should be done EXCEPT:

When an existing When an existing When an existing When a new business

company is planning business is company is planning to is seeking start-up
to create a separate deploying a CRM launch the company in a funds and other
division. system. new direction. resources.

42-Which of the following about business plans and business cases is NOT correct?

One difference is that the business

The content of The purposes are
plan concentrates on the viability of a The audiences are
a business case the same to
company, whereas a business case the same senior is similar to justify a specific
assesses both viability of the project management and the that of a investment of
and the fit of the initiative with the board or directors. business plan. funds.
firm's mission and goals.

43-The risks of being a first mover include all of the following EXCEPT:

the risk that the high cost of over the long run first the chance that a second wave of
the move pioneering EC movers are substantially competitors will eliminate a first
will be too initiatives. less profitable than mover's lead through lower cost
late. followers. and innovation.

44-Factors that determine whether a first mover succeeds or fails in the EC marketplace
include all of the following EXCEPT:

the nature of the whether the company can be the the size of the the speed of
product. best in the market. opportunity. market entry.

45-The most efficient way to expand an organization's scope is:

by expanding the to introduce new products or

by increasing the to buy a company with
firm's appeal to a services into new or existing
size or scale of complementary
new set of markets without increasing
the business. products or services.
customers. production facilities or staff.

46-Separating a company's online operations into a new company makes sense in each of
the following situations EXCEPT:

when the subsidiary can
be created without
dependence on current
operations and legacy
systems.
when the company is when a new business
unable to form new model needs to be when the volume
alliances, attract new developed apart from the of anticipated e-
talent, or raise constraints of current business is large.
additional funding. operation.

47-Rite Aid, a click-and mortar firm, enhanced its EC future by:

Creating a separate Creating an online Forming a joint Buying an equity stake in a

company. brand. venture. existing EC company.

48-Incorrect approaches to EC strategy selection include all of the following EXCEPT:

indiscriminately funding many "trend-surfing," or following betting it all in a using a late-

projects and hoping for a few the crowd to the newest and single, high-stakes mover
winners. most fashionable idea. initiative. strategy.

49-The most dangerous risk to a company engaged in e-commerce is:

customer and business partner
threat posed by hackers. negligent loss of data. business risk.
risk.

50-All of the following determine the degree of collaboration between off-line and online
activities in a business EXCEPT:

the pricing the use of innovative processes the ability of top management to corporate
strategy. that support collaboration. introduce change properly. culture.

51-The ________ pricing strategy means adding up all the costs involved, such as material,
labor, rent, overhead, and so forth, and adding a percentage mark-up as profit.

cost-plus revenue markup price percentage competitor model

52-Internet technologies can provide consumers with easier access to pricing information,
which increases their bargaining power. To remain competitive and profitable, sellers need
smarter pricing strategies, which include all of the following strategies EXCEPT:

greater precision in more adaptability in reducing new ways of customer segmentation

setting prices. changing prices. prices. for differentiated pricing.

53-Implementing EC often requires significant investments in infrastructure. Therefore, a

good way to start is to undertake ________.

a multi-divisional EC a large, non-trivial EC one or a few small EC a single division EC

project project pilot projects project

54-A ________ is a form of business alliance composed of several business partners that
share the costs and resources for the development or production of a product or service.

supply chain temporary corporation co-opetition virtual corporation

55-The most important objectives of strategic assessment are all of the following EXCEPT:

Determine if the EC Measure the extent to Reassess the initial Identify what
strategy and projects are which the EC strategy and strategy in order to competitors are
still viable in the current ensuing projects are learn from mistakes doing to avoid head-
environment. delivering what they were and improve future on competition.
 supposed to deliver. planning

Chapter 15
1-From 1995 through 2000, many EC projects and start-up companies were funded with
little analysis of their business viability or finances.

True False

2-The result of the rush to invest in EC projects and start-up companies was the 2001—
2003 "dot-com bust," when hundreds of EC startups went out of business and the stock
market crashed.

True False

3-After the dot-com bust, most IT executives acquired the knowledge and tools to do ROI
calculations on proposed EC investments.

True False

4-One reason why EC justification is needed is that companies now realize that EC is not
necessarily the solution to all problems.

True False

5-According to a CIO Insight report, EC justification decreases the credibility of EC

projects.

True False

6-One basic way to categorize different EC investments is to distinguish between

investment in infrastructure and investment in specific EC applications.

True False
7-Infrastructure investments are made for the short-term because of frequent technological
changes.

True False

8-Cost-benefit analysis is frequently assessed by return on investment (ROI), which is also

the name of a specific method for evaluating investments.

True False

9-All EC investments need to be formally justified to insure that they align with the
company's competitive strategy.

True False

10-Metrics are used to describe costs, benefits, or the ratio between them and need to be
defined properly with a clear way to measure them.

True False

11-Key performance indicators (KPI) are used to qualitatively track critical metrics or
success factors.

True False

12-A major difficulty in justifying EC projects is that many costs and benefits are
intangible and therefore very difficult to measure.

True False

13-Creating a competitive advantage, providing a benefit to society, and improving the

company's image are examples of tangible benefits that might be realized from an EC
project.

True False
14-Cannibalization occurs when a new EC initiative produces substantial online sales, but
traditional sales fall such that no increase in total revenue occurs.

True False

15-The results of any investment justification in eCRM depend on the time frame used to
measure changes in productivity.

True False

16-Because many EC investments in eCRM take five to six years to show significant
positive results, real productivity gains often do not get measured correctly.

True False

17-In preparing the business case for EC investment, managers should examine the
potential additional revenues that are expressed in the revenue models, such as increased
revenues via products or services from a larger global market because of more effective
product marketing on the Web.

True False

18-The ROI method uses a formula that divides net revenues by the initial cost. The result
is a ratio that measures the ROI for each year or for an entire period.

True False

19-In an NPV analysis, analysts convert future values of benefits to their present-value
equivalents by discounting future cash flows at the risk-free rate set by the Federal Reserve
Bank.

True False

20-Given the diversity of activities involved in e-procurement, the metrics used to measure
the value of e-procurement must reflect how well each process is accomplished; and take
into consideration whether the company is a buyer or seller.

True False
21-According to recent surveys of eCRM applications, there are been mixed payoffs, but a
majority of companies have demonstrated a significantly positive ROI for their eCRM
investments.

True False

22-Large companies often have several integrated intranet and other information systems
that determine the success of a Web portal. Thus, the justification for a Web portal must
focus on both business ROI and technology ROI.

True False

23-To comply with the Sarbanes-Oxley Act, public companies must document every
internal process and external effect that will have an impact on their financial health,
which provide a robust foundation from which to develop a budget.

True False

24-Critical elements that can affect the value of EC across cultures are perceived trust,
consumer loyalty, regulation, political influences, and even the content of online ads.

True False

25-Developing economies often face power blackouts, unreliable telecommunications

infrastructure, undependable delivery mechanisms, and a relatively few customers who
own computers and credit cards. These limitations can be overcome when predicting EC
investment payoffs by using a combination of break-even analysis and NPV.

True False

26-CIOs need to effectively communicate the value of proposed EC projects in order to

gain approval for all of the following reasons EXCEPT:

Some large companies, Companies now Demand for expanding The success of EC
and many public realize that EC is or initiating e-business projects may be
organizations, mandate a not necessarily the projects is no longer assessed in order to
formal evaluation of solution to all strong so there are pay bonuses to those
requests for funding. problems. fewer requests for involved with the
funding. project.

27-One basic way to categorize different EC investments is to distinguish between

investments in infrastructure and investment in specific EC applications because benefits
from infrastructure investments:

have a low are made for the long- depend on the EC are very
return. term. applications. complex.

28-The basic reasons that companies invest in IT and EC are all of the following EXCEPT:

to increase customer to improve business to reduce time- to justify new marketing

satisfaction and retention. processes. to-market. campaigns.

29-Not all EC investments need to be formally justified. All of the following are cases where
formal evaluation may not be needed EXCEPT:

When the value of the When the EC project is When the relevant data
When competitors
investment is relatively mandated and must be are not available, are
have made that
small for the done regardless of the inaccurate, or are too
type of investment.
organization. costs and benefits. volatile.

30-Metrics are used to describe all of the following EXCEPT:

standards. the ratio of costs to benefits. costs. benefits.

31-Productivity benefits from using EC are difficult to measure because:

EC gains in certain areas of the

there is no time qualitative benefits the payoffs are
company may be offset by losses in
lag in EC gains. do not count. too short.
other areas.

32-The relationship between EC investment and organizational performance is:

shared with other investments. direct. not measurable. indirect.

33-EC costs and benefits can be classified into two broad categories:

short-term and capital. tangible and intangible. direct and routine. operational and strategic.

34-The New York Metropolitan Transit Authority (MTA) did not need to open another
airport for almost two decades, even though air traffic had tripled because of productivity
gains derived from improved IT systems. IT systems added by the MTA played critical
roles in ticket reservations, passenger and luggage check-in, crew assignment and
scheduling, runway maintenance and management, and gate assignments. This case
illustrates that:

Tangible benefits can Tangible costs can be Intangible benefits Intangible costs can be
be complex, yet high, yet payoffs can be can be complex, yet high, yet payoffs can be
substantial. achieved quickly. substantial. achieved quickly.

35-An important category of intangible benefits is ________ factors that include comfort to
employees, impact on the physical environment, changes to the power distribution in an
organization, and preventing invasion of the privacy of employees and customers.

ecosystem transactional social subsystem net-enhanced

36-In B2C, an example of a tangible EC metric from the buyer's perspective is:

ease of use of EC. profit per customer. cost/price of the product. convenience in purchasing

37-For Governments, an example of an intangible EC metric is:

lower tax increase in participation in government risk reelection of

rates. programs. reduction. candidates.

38-The major steps in the process of justifying large-scale EC and IT projects include all of
the following EXCEPT:

Be careful not to over-

Lay an appropriate Document and verify all Do not leave out
estimate cost and under-
foundation for analysis figures used in the strategic benefits,
estimate benefits (a
with your vendor, and calculation. Clarify all including long-
tendency of many
then conduct your ROI. assumptions. term ones.
managers).
39-Types of costs and cost issues that need to be considered in justifying EC investments
include all of the following EXCEPT:

initial upfront costs. the allocation of indirect costs. opportunity costs. system operating costs.

40-Traditional methods for evaluating EC investments include all of the following

EXCEPT:

Discount rate ROI NPV Break-even or payback period

41-Dan Welch, who owns three World Cup Coffee shops in Portland, Oregon, estimates
that his free Wi-Fi network has added 10 percent to his overall revenue. Welch credits Wi-
Fi consumers with spending three times as much on food compared with the average
consumer. This is an example of:

technology ROI. business ROI. technology IRR. business NPV.

42-Pouilly's Poodle Shop wants to produce monthly cash flows from its Internet Doggie-
Cam investment. The most appropriate method for assessing this investment is:

Break-even analysis. Internal rate of return (IRR). Total cost of ownership. Payoff.

43-By calculating the difference between TCO and TBO, one can compute the ________ of
an IT investment.

Internal rate of return (IRR) Total cost of ownership Payoff Break-even analysis

44-The disadvantage of the NPV method for evaluating EC and IT is:

it may be difficult to the true benefits it is difficult to compare it assumes

classify outlays as expenses are difficult to projects of unequal lifes reinvestment at the
or investments. measure. pans or sizes same rate.

45-The following direct metrics indicate progress in e-procurement EXCEPT:

increased order decreased number of rejects increased on-time reduced

fulfillment rate. received from suppliers. deliveries. inventory costs.
46-Justifying information security projects:

should focus on is not needed because it is well-

is not done should be done
defending against known that preventing network
because ROI because employee
external threats such security problems is less labor
calculators are not security training is
as hackers and intensive than cleaning up virus
available. usually poorly done.
malware. infections.

47-The average-cost curve (AVC) of physical products and digital products:

are different because the AVC of are different because the AVC of
digital products declines as quantity are both are both physical products declines as
increases forming a L-shape, while L- U- quantity increases forming a L-
the AVC of physical products is U- shaped. shaped. shape, while the AVC of digital
shaped. products is U-shaped.

48-When computing agency cost, companies should consider:

only production-related ignore production- only transaction costs both production-

costs and ignore related costs and and ignore production- related costs and
transaction costs. transaction costs. related costs. transaction costs.

49-Transaction costs include all of the following EXCEPT:

Search costs Monitoring costs incurred

incurred by buyers Negotiation costs result from when buyers and sellers
Production
and sellers in meetings, communication- make sure that the
costs incurred
locating each other related expenses, exchanges of exchange proceeds
for labor and
and specific technical data or brochures, according to the terms
overhead.
products and entertainment, and legal costs. under which the sale was
services. made.

50-McAfee allows users of its VirusScan virus-detection software to automatically update

the latest security patches online. This is an example of ________ to attract customers who
value this automatic update.

product or service differentiation. core competency. competitive advantage. agility.

51-A Web-based seller of CDs carefully monitors the prices charged by its competitors for
identical products. This company has the ability to change a given price within three
minutes in response to changes by competitors. This is an example of EC:

competitive advantage. agility. core competency. product or service differentiation.

52-All of the following are critical success factors (CSFs) of the Old Economy EXCEPT:

Create new partnerships, stay Deliver high- Build market share to get Compete to sell
with core competency. value products. economies of scale. product.

53-As a company moves to incorporate an online presence with its traditional brick-and-
mortar operation, it adds the costs related to training for all personnel in the capabilities of
the EC system and a new advertising campaign to announce its new site to the costs directly
associated with building the new Web presence. In this case, training and advertising are
examples of:

direct costs. transaction costs. complementary investments. indirect costs.

54-One of the strengths of EC is the ease with which its adopters can reach a global
population of consumers. However, EC-driven businesses must consider the critical
elements affecting the value of EC across cultures. Those elements include all of the
following EXCEPT:

perceived trust. delivery delays. political influences. consumer loyalty.

55-All of the following apply to EC in developing economies EXCEPT:

Developing economies Developing

The potential volume of
transactions in developed
countries can make EC
investments more attractive
for established firms than
new firms because
established firms have
already recovered the costs
of their IT infrastructures.
Developing
often face power economies, such as
economies struggle
blackouts and unreliable China and India,
with various issues
infrastructure and represent a
that create too
delivery mechanisms significant
many business and
creating limitations that opportunity for EC
technology risks to
make it difficult for firms to connect
justify investment
to predict whether EC businesses to
in those economies
investments will pay off, customers, as well
at this time.
and when. as other businesses.
Chpater 16
1-Unlike the brick-and-mortar marketplace, the failure rate for online companies is low.

True False

2-Online businesses may be pure play companies or click-and-mortar companies that add
online projects, such as e-procurement or selling online, as additional marketing channels.

True False

3-To create successful entrepreneurial ventures in EC, Maier suggests that starting small
with many founders is the best option.

True False

4-The first step is creating a new company is to identify a consumer or business need in the
marketplace and an innovation to address that need.

True False

5-Many good ideas and realistic initiatives have failed because of poor execution due to the
lack of sufficient business skills by the owners or principals of the business.

True False

6-As a general guideline, although virtually anything is available for sale on the Internet,
the degree of sales success is somewhat dependent on the type of item or service being
offered for sale and how it can be delivered.

True False

7-Medium and large businesses, or those seeking external funding, must have an informal
business plan.

True False
8-The primary reason an entrepreneur writes a business plan is to acquire funding from a
bank, an angel investor, a venture capitalist, or the financial markets.

True False

9-Some entrepreneur may simply invest personal funds from savings, personal lines of
credit, or a house mortgage since these sources of "bootstrap funding" are typically enough.

True False

10-When the entrepreneur's personal funds are insufficient, the entrepreneur will go to
friends, family members, or to financial institutions.

True False

11-An important source of financial support or direct funding, for pre-VC firms is an
incubator.

True False

12-Venture capitalists tend to invest in companies that have identified what seems to be an
outstanding business opportunity, have taken some action to make the opportunity happen,
such as written a new software application or secured a patent , and need an infusion of
funds and management expertise to expand and launch the business.

True False

13-There is a serious downside for start-up businesses that acquire venture capital because
they lose control over the business.

True False

14-Once the company is well known and successful, it can go to a stock exchange to raise
money via an initial public offer or IPO.

True False
15-Organizational transformation is a comprehensive concept that implies not only a major
change, but also a sharp break from the past.

True False

16-Business process management (BPM) systems monitor the execution of the business
processes so that managers can analyze and change processes in response to data, rather
than on just a hunch.

True False

17-Transforming an existing business to an e-business means a manager must change

business processes, but not the way people work or communicate.

True False

18-An informational Web site provides opportunities for the customers and the business to
communicate and share information.

True False

19-Selecting a domain name is an important marketing and branding consideration for a

business because it will be the business's online address and create an identity for the
business.

True False

20-Up-to-the-minute dynamic content is what attracts new and returning customers

("eyeballs") and makes them stay longer ("stickiness"), which builds customer loyalty.

True False

21-Because podcasts are audio-based media files, it enables companies to deliver audio-
specific content, including music, speeches, radio-style presentations, and more.

True False
22-Amazon.com offers personalize content by tracking visitors' behavior via cookies, which
is used to generate dynamic Web pages that recommend products based on previous
purchases and recently viewed items. Amazon.com offers this personalized content because
it is very inexpensive and does not impact performance.

True False

23-Web designers execute successful site navigation through consistency and through
navigation aids such as a navigation bar, a navigation column, a site map, and search tools.

True False

24-Web site usability means that people who use the Web site can do so quickly and easily
to accomplish their tasks and may also consider such factors as cost-effectiveness and
usefulness.

True False

25-Card-not-present (CNP) transactions increase the risk and uncertainty of online

transactions, which increases transaction fees to offset the increased risks.

True False

26-When creating a new business, the first step is to:

acquire financing needed investigate all identify a consumer or write a

to make the business existing business need that isn't business case
successful. opportunities. presently being met. or plan.

27-The principle reason for writing a business plan is to:

provide strategic acquire provide an operational help the founders remember

direction to external framework for the what they are trying to
employees. funding. business. accomplish.

28-The key difference between an e-business plan and a traditional business plan is that the
entrepreneur must:
develop a understand that the understand all aspects of understand that traditional
ten-year Internet is a unique the technology required to rules do not apply when doing
plan. sales channel. implement the plan. business on the Internet.

29-The difference between a business plan and a business case is:

all new businesses should have a business cases are

a business case all businesses need a
business plan, but only existing brief and general,
is a part of business case, but only
businesses planning a major EC while business plans
every business new businesses need a
or IT initiative should develop a are long and
plan. business plan.
business case. detailed.

30-A(n) ________ is a wealthy individual who contributes personal funds and possibly
expertise at the earliest stage of business development.

incubator venture capitalist angel entrepreneur

31-A(n) ________ is a company, university, or nonprofit organization that supports

promising businesses in their initial stages of development.

incubator angel entrepreneur venture capitalist

32-________ is money invested in a business by an individual or a group of individuals in

exchange for equity in the business.

start-up funding operating capital venture capital advance funding

33-The greatest difficulty in dealing with venture capital is:

finding the money a the loss of control a relocating the

finding a willing
venture capitalist will venture capitalist business to an
venture capitalist.
require. demands. incubator.

34-The relationship between stock price and when an investor invests is:

IPO investors will the entrepreneur will pay the venture capitalist the angel investor will
pay the highest price the highest price per will pay the highest pay the highest price
per share. share price per share. per share
35-Chaplin's Pet Store has been in business for many years. Chaplin, the present owner,
decides to open an online sales channel where he can advertise and sell the same gourmet
pet food. This is an example of adding:

a portal. a storefront. e-procurement. a reverse auction

36-Reprise Electronics, a conglomerate that manufactures and sells all kinds of electronic
goods under several brand names, currently has separate Web sites for each of its brands.
The company decides to bring all of the Web sites together through a single site that, in
addition to providing links to the brand pages, will also provide general information about
how to select electronic merchandise and informational pages about the Reprise company
today and its management team. This is an example of adding:

a reverse auction. e-procurement. a portal. a storefront.

37-In an organizational transformation:

there is a change in there is always a sharp

the change may affect there are incremental
outlook, but rarely a break with the past and
only one or a few of changes to the ways
change in procedures or every aspect of the
the functional areas things have always
investment in business will probably
of the business. been done.
infrastructure. change.

38-A(n) ________ Web site does little more than provide information about the business
and its products.

dynamic informational transactional interactive

39-A major entertaining company has four studios that have been in the same location for
more than ten years. The company includes a page on its Web site with addresses, phone
numbers, and general e-mail addresses for each of these studios. None of this information
has changed since the Web site was developed. This is an example of ________ content.

dynamic organizational functional static

40-Secondary content that offers a coupon, rebate, or special service is called:

cross-selling. up selling. comment. promotion.

41-Reviews, testimonials, expert advice, or further explanation about the product are
called:

comment. promotion. cross-selling. up selling.

42-The ________ is how Web pages are organized, labeled, and navigated to support
browsing and searching.

Web design information architecture Web site map Web layout

43-Creating content that offers upgraded or more expensive versions of the product is
called:

comment. promotion. up selling. cross-selling.

44-One of the first decisions to be made in building a Web site is:

whether to provide personalized who will the domain how to protect the Web site from
content host it. name hackers

45-A(n) ________ is an exact duplicate of the original Web site physically located on a Web
server on another continent.

backup site a download site mirror site a hot site

46-The Web hosting option under which the business acquires the hardware, software,
staff, and dedicated telecommunications services needed to host a Web site is called:

mirror hosting self-hosting. using a storebuilder. ISP hosting.

47-The ________ is the name-based address that identifies an Internet-connected server.

URL name host name domain name IP address

48-Content not available anywhere else on the Web is called:

restricted content. reserved content. premium content. commodity content.

49-The concept of consistency in Web site design includes:

making sure the making sure Web

making sure customers making sure all
messages sent to pages look the same
are treated consistently visitors consistently
customers who contact no matter which
when they contact find what they are
the company are browser a customer is
customer service. looking for.
consistent. using.

50-All of the following are advantages of building Web sites internally EXCEPT:

it allows the it provides the it allows the company to it allows the company to exert
company to use in- fastest speed to protect proprietary greater control on the process
house expertise. market. technology. and the resulting site.

51-Banks are more selective about who gets an account for accepting credit cards online
because

online transactions do dot com failures have made fees are higher CNP transactions
not produce much banks less willing to work for online are less secure and
revenue for banks with online companies. processing riskier.

52-In addition to providing an easy mechanism for buying books, the Amazon.com Web
site is easily searchable by book title and author. It also has book reviews and suggests titles
based on previous purchase activity. These enhancements make the Amazon site a favorite
for readers. This is an example of:

internal Web site promotion search engine optimization using a meta tag. CNP

53-________ offers one of the most popular storefront packages at with three levels of
merchant solutions: starter, standard, and professional.

Google eBay Yahoo! Amazon.com

54-Options for acquiring storefronts include all of the following EXCEPT:

Build from Build them from Build from templates or Join a
scratch. components storebuilders. mall.

55-Before choosing the appropriate Web site development option, you need to consider all
of the following issues in order to generate a list of requirements and capabilities EXCEPT:

Can customers What kinds of products or

What might be the Who are the target
place orders services will the business sell
reaction of competitors? customers?
online? online?

Chapter 17
1-For many e-businesses, a majority of their customer online traffic comes from search
engines.

True False

2-All marketing methods used to increase the ranking of a company's Web site in the
search results are ethical.

True False

3-Companies use search engine marketing (SEM) methods to increase their chance of
"getting found" among competing Web sites.

True False

4-The volume of e-mail spam has decreased because of the widespread use and
effectiveness of antispam software and ISP spam filters.

True False

5-Spam sent to blogs, cellular phones, or other types of messaging media to promote
products or services is called media spam.

True False
6-Web pages that have been created to trick search engines into offering poor-quality
results are referred to as search engine spam.

True False

7-Acts or activities that are unethical are also illegal.

True False

8-Creations of the mind, such as inventions, literary and artistic works, and symbols,
names, images, and designs, used in commerce are known as private property.

True False

9-Questions or disputes about the legality of spam can be resolved easily by referring to
relevant laws.

True False

10-Legal precedents are decisions by judges that may be used as standards in similar legal
cases that follow.

True False

11-Political spam, regardless of its content, is legal in the United States because it is a form
of speech protected by the Constitution.

True False

12-Significant changes in the nature of business or crimes lead to new laws because laws
must remain responsive to new threats or abuses.

True False

13-Due process is a legal claim that others not interfere with a protected interest, such as
privacy, intellectual property, or free speech.
True False

14-Because of intellectual property law, the recording industry can file lawsuits for
copyright infringement against YouTube or MySpace if it profits from the recording
industry's property without authorization and compensation.

True False

15-A company can be sued for libel if its EC site contains a defamatory or untrue statement
that causes damage to a person or another company.

True False

16-A corporate code of ethics should specify whether the company allows employees to set
up their own Web pages on the company intranet and the rules for private e-mail usage
during working hours.

True False

17-EC web site content needs to be reviewed by attorneys with cyber law expertise to
ensure that there nothing is unethical or illegal and that all required statements and
disclaimers are properly included.

True False

18-Ethical principles that apply to the collection and use of personal information, such as
notifying customers of information practices before collecting it, do not apply to
information collected in e-commerce.

True False

19-As a defense against abusive trackback tactics by profit-motivated spammers,

trackback spam filters are implemented in blog publishing systems.

True False
20-Blocking tools cannot stop adware or software that gets bundled with other popular
applications, such as Kazaa, from delivering pop-up ads because they originate from the
desktop, and not the browser.

True False

21-Unlike hate sites that can cause problems for corporations or lead to lawsuits, fan sites
are beneficial and welcomed by the entertainment industry.

True False

22-Online merchants reject about 10 percent of incoming orders because of suspicions of

fraud; and about 3% of accepted orders turn out to be fraudulent.

True False

23-Electronic signatures improve EC by helping to distinguish between legitimate and

fraud transactions and build trust and predictability needed by parties doing business
online.

True False

24-Several public organizations and private companies attempt to protect consumers and
build users' trust and confidence in the Internet through a seal of quality, such as
Trustmark and BBBOnline.

True False

25-Online sellers can better protect themselves against fraud by requiring customers whose
billing address is different from the shipping address to call their bank and have the
alternate address added to their bank account.

True False

26-Approximately what percent of Internet shoppers use search engines to find products
and services?

75% 50% 10% 25%

27-Sending spam that disguises a sales pitch to look like a personal e-mail so that it will
bypass e-mail spam filters violates the:

Controlling the Assault of Computer Fraud Children's Internet

First
NonSolicited Pornography and and Abuse Act Protection Act
Amendment
Marketing (CAN-SPAM) Act. (CFAA) (CIPA)

28-To defend against unethical and illegal business tactics that exploit EC operations,
Google, MSN Search, and Yahoo have turned to all of the following aggressive measures
except:

Banned Built algorithms that check for and

Implemented spam site Implemented
violators' penalize deceptive rank-boosting
reporting systems. honeypots.
sites. practices.

29-Having control over the collection, storage, and dissemination of personal information is
included in the category of:

duties rights privacy property

30-A decision by a judge that may be used as a standard in similar cases that follow is
referred to as:

legal precedent common law intellectual property tort

31-Critics of political spam are against its use because they believe that:

it increases candidates'
all spam is a nuisance, clogs mail it is it leads to political
dependence on wealthy
servers, and creates security risks illegal favoritism
fundraisers,

32-Due process is

a guarantee of basic
a legal obligation not a legal claim that others a set of enforceable
fairness and fair
to interfere with a not interfere with a rules and
procedures in legal
protected interest protected interest. regulations.
action.
33-A duty is

a guarantee of basic
a legal obligation not to a legal claim that others a set of enforceable
fairness and fair
interfere with a not interfere with a rules and
procedures in legal
protected interest protected interest. regulations.
action.

34-Property rights relevant to e-commerce include all of the following EXCEPT:

The right to bring The right to benefit, The right to exclude

Control of the use
criminal charges against a transfer, or sell the others from the
of the property.
violator. property. property.

35-A music company can file a ________ against YouTube and MySpace for any
interference with the ability to profit from its IP or for profiting from the recording
industry's property without authorization and compensation

lawsuit or civil charge nuisance charge negligence charge criminal charge

36-________ enable an organization that has suffered a loss due to spammers to bring a
lawsuit against spammers responsible for the loss.

Civil laws CFAA Common laws Criminal laws

37-Intellectual property law is the area of law that is associated with each of the following
EXCEPT:

electronic databases, patent law, copyright law,

visual and business
advertising, and video trademark law, and trade secret
performing arts. contracts
games. law.

38-Which of the following is true about copyrights?

The entertainment The Recording Industry In the United States, Copyright

industry, led primarily by Association of America after work is created protection on
the Motion Picture (RIAA) uses lawsuits and in a tangible artistic property
Association of America against universities, but form such as through such as a movie or
(MPAA) and RIAA, is not students, to stamp writing or recording, music lasts forever,
trying technical solutions out rampant music the author can apply even after the
via the legal system to piracy on university for a federal death of the author
protect its interests. campuses. copyright. or creator.

39-Each of the following statements about digital rights management (DRM) is true
EXCEPT:

DRM is an umbrella term for

DRM are DRM technologies Typically, the content
any arrangement that allows a
technology- were developed with is a copyrighted
vendor of content in electronic
based protection strict regard for digital work to which
form to control the material and
measures. privacy protection. the vendor holds right.
restrict its usage.

40-Fair use means

that a copyright that the author or creator

that copyrighted material
holder has that copyrighted of a book, movie, or
can be used for
exclusive rights to material can be musical composition can
noncommercial purposes
the invention for a digitally protected use their creations for an
without paying royalties or
fixed number of against misuse. unlimited number of
getting permission.
years. years.

41-Which of the following is true about the scope of business ethics?

The scope of business ethics has

The scope of The scope of business
The scope of expanded to encompass the nature
business ethics ethics has been limited
business ethics and quality of the relationships
has not changed to company's actions
has not changed with shareholders, customers,
because laws with regard to how it
even though laws business partners, suppliers, the
have not treats employees and
have expanded. community, environment, and
changed. obeys laws.
future generations.

42-An Internet acceptable use policy (AUP) is an important safeguard because:

without a formal AUP, it is much more employees may be using

it includes a it required
difficult to enforce acceptable behaviors company e-mail to
corporate code by the
and eliminate unacceptable behaviors, advertise their own
of ethics. FTC.
and punish violators. businesses.
43-Section 5 of the FTC Act does each of the following EXCEPT:

gives the FTC authority to take action against

prohibits unfair requires
protects companies whose lax security practices could
or deceptive EC monitoring of
privacy. expose customers' financial information to
practices. employees' e-mail.
theft or loss,

44-Companies can improve their responsibility as custodians of customers' personal data

by implementing:

AUP. E-mail monitoring. Firewalls. Opt in and opt out information practices.

45-Which of the following statements about the rights to privacy and free speech is not
correct?

As with all rights, Those rights have an Defamation laws put

The Internet has
the right of free increasingly important role restrictions on what may
destroyed the
speech is not in an information society be freely said or
right to privacy.
unlimited. and to EC. published.

46-All of the following are ways to use the Internet to find information about an individual
EXCEPT:

Using cookies, Reading an individual's e- Stealing the

Wiretapping
spyware or keystroke mail, IM, blogs, or text individual's
communication lines.
loggers. messages. computer.

47-Private online communities that are only open to those who belong to them are called:

splogs darknets RFIDs blogs

48-A domain name is:

intangible property tangible property intangible property that is tangible property that is
protected by law protected by law not protected by law not protected by law

49-The ________ give law enforcement agencies broader range in their efforts to protect
the public.
Electronic Freedom American Civil Liberties U.S. Department of USA PATRIOT
Foundation (EFF) Union (ACLU) Justice (DOJ) Act

50-________ work on the principle that once Web surfers arrive at their site, a few of them
will click on one of the linked advertisements and earn them a few cents for each click.

Spammers Phishers Trackbacks Sploggers

51-The least effective method to protect against pop-up ads and their risk is:

Pop-up blocking Mozilla and Firefox Web ISPs using tools that
Minimizing the
software on users' browsers preventing pop- stop pop-ups from
pop-up window.
computers. ups. appearing.

52-All of the following statements apply to hate Web sites EXCEPT:

Web sites that contain legitimate

Cyberbashing is the The intent of Many hate sites are
complaints that aren't defamatory,
registration of a most hate directed against large
sponsored by competitors, or
domain name that Web sites is corporations such as
infringe upon trademark rights by
criticizes an to commit Wal-Mart, Microsoft,
confusing consumers are usually
organization or person. fraud. and Nike.
protected by the First Amendment.

53-A legally binding contract requires a few basic elements. Which of the following is not
one of those elements?

an offer acceptance consideration agreement

54-Examples of electronic signatures to help distinguish between legitimate and fraud

transactions include all of the following EXCEPT:

a digitized image of a
a name typed at the a Web site a secret code or PIN
handwritten signature
end of an e-mail development to identify the sender
attached to an electronic
message by the sender agreement to the recipient
document

55-EC sellers need to protect against fraud and each of the following EXCEPT:
Customers who give false credit card or bad Use of their name Customers who deny
Public
check information in payment for products by imposter that they placed an
keys.
and services provided. sellers. order.