Electronic Commerce 11th Edition Gary Schneider Test Bank 1

Chapter 05: Business-to-Business Activities: Improving Efficiency and Reducing Costs
Electronic Commerce 11th Edition by

Schneider ISBN 128542543X 9781285425436
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1. An important characteristic of purchasing, logistics, and support activities is flexibility.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: 05.01
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
2. A purchasing or logistics strategy that works this year may not work next year.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
3. The network purchasing model has one hierarchically structured firm negotiating purchase terms with several similarly
structured supplier firms, playing each supplier against the others.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
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4. Large companies usually assign responsibility for purchasing direct and indirect materials to the same department.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
5. Businesses make a distinction between direct and indirect materials.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
6. Direct materials that companies buy on a recurring basis are called MRO supplies.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
7. The use of Internet technologies in sourcing activities is called e-sourcing.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Technology
8. States can reduce the cost of providing services by using Web technologies to serve their stakeholders.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
9. Many industry value chains no longer consist of a single sequence of companies linked in a single line but include
many parallel lines that are interconnected in a web or network configuration.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
10. Industry-specific data interchange standards were used to exchange data between companies in different industries.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
11. Electronic data interchange (EDI) was the first form of electronic commerce to be widely used in business.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
12. Electronic receipts returned from AS2 transmissions used in the exchange of EDI transactions fail to establish
nonrepudiation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Comprehension
13. The American National Standards Institute (ANSI) does not set standards, but maintains procedures for the
development of national standards and accredits committees that follow those procedures.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
14. The Data Interchange Standards Association (DISA) and the EDI for Administration, Commerce, and Transport
(UN/EDIFACT) group were successful in developing a common set of international standards for electronic data
interchange.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
15. Electronic data interchange (EDI) increases the paper flow and disperses the interchange of information among
departments within a company.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
16. In the past, most value-added networks (VANs) did not require an enrollment fee.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
17. In the past, one of the major advantages of VANs was the low cost of its application.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
18. An independent exchange is a B2B marketplace model.

a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
19. AS3 transmissions used for EDI transactions are insecure.

a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
20. Many companies use strategic alliances, partnerships, and long-term contracts to create relationships with other
companies in the supply chains for the products that they manufacture or sell.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy

21. By coordinating the efforts of supply chain participants, firms that engage in supply chain management are reaching
beyond the limits of their own organization's hierarchical structure and creating a new network form of organization
among the members of the supply chain.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
22. By engaging suppliers in cooperative, long-term relationships, companies have found that they can work together with
these suppliers to identify new ways to provide their own customers with faster, cheaper, and better services.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
23. The ultimate goal of supply chain management is to achieve a higher-quality or lower-cost product at the end of the
chain.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
24. A passive Radio Frequency Identification Device (RFID) tag does not need a power source.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
25. A vertical portal is an industry-focused hub that offers services to more than one industry.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
26. _____ generally includes all purchasing activities, plus the monitoring of all elements of purchase transactions.
a. Procurement b. Logistics
c. Distribution d. Sales
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
27. _____ activities include managing the inbound movements of materials and supplies and the outbound movements of
finished goods and services.
a. Procurement b. Logistics
c. Transaction d. Production
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
28. The classic objective of _____ is to provide the right goods in the right quantities in the right place at the right time.
a. procurement b. logistics
c. marketing d. production
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
29. One common support activity that underlies multiple primary activities is _____.
a. warehousing b. purchasing
c. training d. procuring
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
30. _____ is the intentional collection, classification, and dissemination of information about a company, its products, and
its processes.
a. Database management b. Knowledge management
c. Intelligence warehousing d. Data mining
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
31. One trend that is becoming clear in purchasing, logistics, and support activities is the shift away from hierarchical
structures toward _____ structures.
a. vertical b. horizontal
c. network d. bottom-up
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
32. In _____, the company negotiates long-term contracts for most of the materials that it will need.
a. replenishment purchasing b. blanket purchasing
c. spot purchasing d. tactical purchasing
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
33. The roots of Web technology for business-to-business transactions lie in a hierarchically structured approach to inter-
firm information transfer called _____.
a. power line communication b. data terminal interoperation
c. object technology d. electronic data interchange
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
34. EDI is the acronym for _____.

a. Education Interchange b. Elementary Decision Implementation
c. Electronic Data Interchange d. Electronic Distance Interface
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
35. Most Electronic Data Interchange-Internet Integration (EDIINT) exchanges today are encoded using the _____
specification.
a. Applicability Statement 1 (AS1) b. Applicability Statement 3 (AS3)
c. Applicability Statement 2 (AS2) d. Applicability Statement 4 (AS4)
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
36. Electronic data interchange (EDI) is still the single most commonly used technology in online _____ transactions.
a. consumer-to-business b. business-to-business
c. business-to-government d. business-to-consumer
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
37. The _____ has been the coordinating body for standards in the United States since 1918.
a. Association for Computing Machinery b. Institute of Electronic and Electrical Engineers
c. American National Standards Institute d. Institution of Engineering and Technology
ANSWER: c
POINTS: 1
DIFFICULTY: Easy

38. In 1979, American National Standards Institute (ANSI) chartered a new committee to develop uniform electronic data
interchange (EDI) standards. This committee is called the _____.
a. ASC X12 b. DISA
c. EDIFACT d. EDIINT
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
39. _____ requires each business in the network to operate its own on-site electronic data interchange (EDI) translator
computer.
a. Open EDI b. Direct connection EDI
c. Internet EDI d. Web EDI
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
40. To use the services of a value-added network (VAN), a company must install electronic data interchange (EDI) _____
software that is compatible with the VAN.
a. switch b. interpreter
c. translator d. router
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
41. _____ allows trading partners to pass messages through a value-added network instead of connecting their computers
directly to each other.
a. Indirect connection EDI b. Direct connection EDI
c. Wireless EDI d. Repeated EDI
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
42. Since electronic data interchange (EDI) transactions are business contracts and often involve large amounts of money,
the existence of an independent audit log helps establish _____.
a. secrecy b. abrogation
c. nonrepudiation d. privacy
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
43. Electronic data interchange (EDI) on the Internet is also called _____.
a. open EDI b. closed EDI
c. linked EDI d. digital EDI
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
44. When companies integrate their supply management and logistics activities across multiple participants in a particular
product’s supply chain, the job of managing that integration is called _____.
a. supply chain management b. supply intelligence management
c. supply resource planning d. supply workflow planning
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
45. The long-term relationships that are created among participants in the supply chain are called _____.
a. quality partnerships b. JIT alliances
c. supply alliances d. joint partnerships
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
46. Businesses that engage in supply chain management work to establish long-term relationships with a small number of
very capable suppliers who are called _____.
a. tier-one suppliers b. primary suppliers
c. secondary suppliers d. tier-two alliances
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
47. _____ are business-to-business (B2B) marketplace models used in electronic commerce.
a. Independent exchanges b. Industry marketplaces
c. Public marketplaces d. Customer portals
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
48. A(n) _____ is a business-to-business (B2B) marketplace model that has a password-protected entrance and offers
negotiated price reductions on a limited selection of products.
a. industry marketplace b. public marketplace
c. private store d. independent exchange
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
49. A(n) _____ is a marketplace that provides auctions, request for quote postings, and other features to companies that
want to operate their own marketplaces.
a. private store b. independent industry marketplace
c. customer portal d. private company marketplace
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
50. A(n) _____ is a marketplace formed by several large buyers in a particular industry.
a. private company marketplace
b. independent industry marketplace
c. industry consortia-sponsored marketplace
d. customer portals marketplace
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
51. Offshoring nonmanufacturing activities such as purchasing, research and development, recordkeeping, and
information management is called _____.
ANSWER: business process offshoring
POINTS: 1
DIFFICULTY: Easy
52. The total dollar amount of the goods and services that a company buys during a year is called its _____.
ANSWER: spend
POINTS: 1
DIFFICULTY: Easy
53. In _____ purchasing, by negotiating contracts in advance, companies can obtain low prices and good delivery terms.
ANSWER: replenishment
POINTS: 1
DIFFICULTY: Easy
54. _____ are those materials that become part of the finished product in a manufacturing process.
ANSWER: Direct materials
POINTS: 1
DIFFICULTY: Easy
55. MRO is the acronym for maintenance, repair, and _____.

ANSWER: operating
POINTS: 1
DIFFICULTY: Easy
56. _____ give individual managers the ability to make multiple small purchases at their discretion while providing cost-
tracking information to the procurement office.
ANSWER: Purchasing cards
POINTS: 1
DIFFICULTY: Easy
57. _____ business processes include activities such as making payments, processing payments received from customers,
planning capital expenditures, and budgeting and planning to ensure that sufficient funds will be available to meet the
organization’s obligations as they come due.
ANSWER: Finance and administration
POINTS: 1
DIFFICULTY: Moderate
58. _____ processes include activities such as hiring, training, and evaluating employees; administering benefits; and
complying with government record-keeping regulations.
ANSWER: Human resource
POINTS: 1
DIFFICULTY: Easy
59. The U.S. government’s Bureau of Public Debt operates the _____ site, which allows individuals to buy savings bonds
and financial institutions to buy treasury bills, bonds, and notes.
ANSWER: TreasuryDirect
POINTS: 1
DIFFICULTY: Easy
60. Some researchers use the term “_____” instead of “supply chain” because many industry value chains include many
parallel lines that are interconnected in a network configuration made up of strategic alliances or complex configurations
of outsourcing contracts.
ANSWER: supply web
POINTS: 1
DIFFICULTY: Easy
61. _____ are the names of the formats for specific business data interchanges.
ANSWER: Transaction sets
POINTS: 1
DIFFICULTY: Easy
62. A(n) _____ is a company that provides communications equipment, software, and skills needed to receive, store, and
forward electronic messages that contain electronic data interchange (EDI) transaction sets.
ANSWER: value-added network (VAN)
value-added network
VAN
POINTS: 1
DIFFICULTY: Easy
63. _____ is the ability to establish that a particular transaction actually occurred.
ANSWER: Nonrepudiation
POINTS: 1
DIFFICULTY: Easy
64. A(n) _____ is the movement of money from one bank account to another.
ANSWER: electronic funds transfer (EFT)
EFT
electronic funds transfer
POINTS: 1
DIFFICULTY: Easy
65. _____ prevents either party involved in an electronic data interchange (EDI) transaction from denying the
transaction’s validity or existence.
ANSWER: Nonrepudiation
POINTS: 1
DIFFICULTY: Easy
66. A(n) _____ system is a service that banks use to manage their accounts with each other.
ANSWER: automated clearing house (ACH)
ACH
automated clearing house
POINTS: 1
DIFFICULTY: Easy
67. _____ are small chips that use radio transmissions to track inventory.
ANSWER: Radio Frequency Identification Devices (RFIDs)
RFIDs
Radio Frequency Identification Devices
Radio Frequency Identification Device
RFID
Radio Frequency Identification Device (RFID)
POINTS: 1
DIFFICULTY: Easy
68. _____ tags can be placed anywhere on or in most items and are readable even when covered with packing materials,
dirt, or plastic bands.
ANSWER: Radio Frequency Identification Device (RFID)
RFID
Radio Frequency Identification Device
POINTS: 1
DIFFICULTY: Easy
69. The use of other organizations to perform specific activities is called _____.
ANSWER: outsourcing
POINTS: 1
DIFFICULTY: Easy

70. Companies in industries with long supply chains have, in the past, often found it difficult to maintain customer focus,
which is sometimes called a(n) _____.
ANSWER: ultimate consumer orientation
POINTS: 1
DIFFICULTY: Easy
71. Vertical portals consisting of industry marketplaces, independent exchanges, and public marketplaces are known
collectively as _____ marketplaces.
ANSWER: independent industry
POINTS: 1
DIFFICULTY: Easy
72. A(n) _____ is a vertical portal which is not controlled by a company that is an established buyer or seller in the
industry.
ANSWER: independent exchange
POINTS: 1
DIFFICULTY: Easy
73. _____ are vertical portals which are open to new buyers and sellers just entering the industry.
ANSWER: Public marketplaces
POINTS: 1
DIFFICULTY: Easy
74. Firms that exchange data in specific standard formats of electronic data interchange are said to be _____.
ANSWER: EDI compatible
electronic data interchange compatible
POINTS: 1
DIFFICULTY: Easy
75. Buying products from loosely organized markets is called _____.

ANSWER: spot purchasing
POINTS: 1
DIFFICULTY: Easy
76. Differentiate between purchasing activities and procurement activities.

ANSWER: Purchasing activities include identifying and evaluating vendors, selecting specific products,
placing orders, and resolving any issues that arise after receiving the ordered goods or
services.
Procurement generally includes all purchasing activities, plus the monitoring of all elements
of purchase transactions. It also includes the job of managing and developing relationships
with key suppliers.
POINTS: 1
DIFFICULTY: Easy
77. Differentiate between direct and indirect materials.

ANSWER: Direct materials are those materials that become part of the finished product in a
manufacturing process.
Indirect materials are all other materials that the company purchases, including factory
supplies such as sandpaper, hand tools, and replacement parts for manufacturing machinery.
POINTS: 1
DIFFICULTY: Easy
78. What is the difference between indirect connection electronic data interchange (EDI) and direct connection electronic
data interchange (EDI)?
ANSWER: Direct connection EDI requires each business in the network to operate its own on-site EDI
translator computer. These EDI translator computers are then connected directly to each other
using modems and dial-up telephone lines or dedicated leased-lines.
With an indirect connection EDI, the trading partners pass messages through the VAN
instead of connecting their computers directly to each other.
POINTS: 1
DIFFICULTY: Easy
79. What are the advantages of using value-added networks (VANs)?

ANSWER: Advantages of using VANs are as follows:
1) Users need to support only the VAN’s communications protocol instead of many possible
protocols used by trading partners.
2) The VAN can provide translation between different transaction sets used by trading
partners.
3) The VAN can perform automatic compliance checking to ensure that the transaction set is
in the specified EDI format.
4) The VAN records message activity in an audit log. This VAN audit log becomes an
independent record of transactions; this record can be helpful in resolving disputes between
trading partners.
POINTS: 1
80. List the advantages of using Internet technologies in supply chain management.
ANSWER: Suppliers can:
1) Share information about changes in customer demand
2) Receive rapid notification of product design changes and adjustments
3) Provide specifications and drawings more efficiently
4) Increase the speed of processing transactions
5) Reduce the cost of handling transactions
6) Reduce errors in entering transaction data
7) Share information about defect rates and types
POINTS: 1

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Chapter 05: Business-to-Business Activities: Improving Efficiency and Reducing Costs

Electronic Commerce 11th Edition by

Download full test bank at :

1. An important characteristic of purchasing, logistics, and support activities is flexibility.

Cengage Learning Testing, Powered by Cognero Page 1

5. Businesses make a distinction between direct and indirect materials.

7. The use of Internet technologies in sourcing activities is called e-sourcing.

18. An independent exchange is a B2B marketplace model.

19. AS3 transmissions used for EDI transactions are insecure.

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34. EDI is the acronym for _____.

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55. MRO is the acronym for maintenance, repair, and _____.

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75. Buying products from loosely organized markets is called _____.

76. Differentiate between purchasing activities and procurement activities.

77. Differentiate between direct and indirect materials.

79. What are the advantages of using value-added networks (VANs)?

Cengage Learning Testing, Powered by Cognero Page 19

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