B4-4 Flashcards
An advantage of an e-commerce transaction over an EDI transaction is that e-commerce:
a.
Is generally less expensive than EDI.
b.
Requires that organizations enter a contract before transacting business.
c.
Is generally less secure than EDI.
d.
Is generally slower than EDI.
Choice “a” is correct. Since e-commerce transactions are usually conducted through the Internet, not a VAN, e-commerce transactions are less expensive than EDI transactions. This is true because a privately owned VAN is more expensive.
Choice “c” is incorrect. Choice “c” is a true statement but this is a disadvantage, not an advantage of e-commerce over EDI.
Choice “d” is incorrect. Choice “d” is a false statement because e-commerce transactions are usually conducted through the Internet, not a VAN, and therefore are executed in real time and not delayed in a batch file. This makes e-commerce transactions faster, not slower, than EDI transactions.
Choice “b” is incorrect. Choice “b” is a false statement because e-commerce transactions do not require that organizations enter a contract before transacting business; EDI transactions do.
In an e-commerce environment that requires that the information technology (IT) system be available on a continuous basis, more emphasis will be placed on which of the following aspects of the planning than in a traditional organization?
a.
Maintain redundant systems for instant availability to assure the flow of transactions.
b.
Review additional expenses to obtain the required amount of business interruption insurance coverage for the organization.
c.
Assure that appropriate data backups are stored in an off-site location.
d.
Maintain appropriate written source documents so the data can be re-entered if it is lost or compromised.
Choice “a” is correct. E-commerce environments are more highly dependent upon robust communications systems than traditional organizations to ensure continuous service. Maintenance of redundant systems for instant availability to assure the flow of transactions would require more emphasis in an e-commerce environment than a traditional organization.
Choice “d” is incorrect. Traditional systems will place more emphasis on written source documents to provide data redundancy than e-commerce environments.
Choice “b” is incorrect. Both traditional and e-commerce organizations will invest in business interruption insurance to ensure business survival.
Choice “c” is incorrect. Both traditional and e-commerce organizations will make appropriate arrangements for system backup and safeguarding of data.
In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity’s computer system correspond to the standard data elements?
a.
Encryption.
b.
Translation.
c.
Decoding.
d.
Mapping.
Choice “d” is correct. Mapping is the process of determining the correspondence between elements in a company’s terminology and elements in standard EDI terminology. Once the mapping has been completed, translation software can be developed to convert transactions from one format to the other.
Choice “b” is incorrect. Translation is the conversion of data from one format to another, such as from EDI format to an internal company format.
Choice “a” is incorrect. Encryption is the encoding of data for security purposes.
Choice “c” is incorrect. Decoding is the process used by the recipient of encoded information, whereby a “key” is used to decipher the message.
After a B2B transaction occurs, the area of management that is concerned with what goods were ordered, when and where the goods were to be delivered, and what the amount paid is:
a.
The Business Information Systems group.
b.
The Database Management group.
c.
The Supply Chain Management group.
d.
The Management Information System group.
Choice “c” is correct. Supply Chain Management (SCM) is concerned with four important characteristics for every sale: what, when and where the goods were delivered and how much the goods cost.
Choices “b”, “d”, and “a” are incorrect, per the above explanation.
Accountants often access the website for the American Institute of Certified Public Accountants and order publications from that organization. As part of that process, they provide their name and address and a password establishing their identity and provide credit or debit card information to pay for goods purchased. Use of the Internet to effect purchases of this type is called:
a.
Electronic Data Interchange (EDI).
b.
E-Mail.
c.
Enterprise Resource Planning (ERP).
d.
E-Commerce.
Choice “d” is correct. Ordering goods or services over the Internet from a corporate website is an example of e-commerce.
Choice “a” is incorrect. Electronic Data Interchange (EDI) typically occurs between parties with a previous relationship normally over a privately owned value added network, not the Internet. However, use of the Internet for EDI is becoming more common.
Choice “b” is incorrect. E-mail is a form of electronic communication not necessarily a medium in which to transact exchange transactions.
Choice “c” is incorrect. This answer choice is a distractor.
Belwood International, located in the U.S., has just purchased goods over the Internet from a supplier, Silver Diamond, located in Europe. Belwood and Silver Diamond do business on a regular basis and Belwood is able to access Silver Diamond’s database to check on stock availability and then place orders on-line. Belwood then pays for the purchases through an arrangement between Silver Diamond and Belwood’s respective banks in Europe and the U.S. Silver Diamond and Belwood are involved in:
I.
B2C.
II.
EFT.
III.
B2B.
IV.
EDI.
a.
II and IV only.
b.
I and IV only.
c.
I and II only.
d.
II, III, and IV only.
Choice “d” is correct. Silver Diamond and Belwood are involved in Electronic Funds Transfer (EFT) as they make payments through their respective banks for their business-to-business transactions (B2B). They are involved in Electronic Data Interchange (EDI) because they are known to each other and one allows access by the other to their systems.
Choices “b”, “c” and “a” are incorrect:
The correct choice should exclude B2C since this term relates to business-to-consumer, but this is not relevant here as both organizations are businesses.
The correct choice should include EFT. Silver Diamond and Belwood are involved in Electronic Funds Transfer as they make payments through their respective banks.
The correct choice should include B2B. Silver Diamond and Belwood are both business transacting business electronically.
The correct choice should include EDI. Silver Diamond and Belwood are involved in Electronic Data Interchange because they are known to each other and one allows access by the other to their systems.
An enterprise resource planning (ERP) system has which of the following advantages over multiple independent functional systems?
a.
Increased amount of data redundancy since more than one module contains the same information.
b.
Increased responsiveness and flexibility while aiding in the decision-making process.
c.
Modifications can be made to each module without affecting other modules.
d.
Reduction in costs for implementation and training.
Choice “b” is correct. Enterprise Resource Planning (ERP) coordinates information to ensure timely and responsive reporting and data administration in support of decisions. An enterprise resource planning system is a cross-functional enterprise system that integrates and automates many business processes that work together in the manufacturing, logistics, distribution, accounting, finance, and human resource functions of a business. ERP software is comprised of a number of modules that can function independently or as an integrated system to allow data and information to be shared among all of the different departments and divisions of large businesses.
Choice “c” is incorrect. ERP presumes modifications affect other modules. In fact, the coordination of modules and information is how ERP adds value.
Choice “a” is incorrect. ERP systems store information in a central repository so that data may be accessed and used by various departments.
Choice “d” is incorrect. Implementation and training would increase, not reduce cost.
Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?
a.
Automatic protection of information that has electronically left the entity.
b.
Assurance of the completeness of transaction data because of standardized controls.
c.
Elimination of the need to verify the receipt of goods before making payment.
d.
Elimination of the need to continuously update antivirus software.
Choice “b” is correct. One of the benefits of EDI is that transactions are transmitted in a standardized manner with the same controls at all times because the transmission is done by an application system instead of by a person (unless the application controls are changed in some manner). This would mean that transactions would only be transmitted if they contained complete information.
Choice “d” is incorrect. EDI does not have anything to do with antivirus software. It certainly does not eliminate the need to update antivirus software continuously; that need is still there. Virus software (actually the virus definitions, not necessarily the software itself) needs to be updated regularly; most anti-virus software vendors provide updated virus definitions on at least a weekly basis.
Choice “a” is incorrect. EDI has nothing to do with the automatic protection of information that has left the entity, electronically or in any other manner. Once data or information has left the entity, the entity can do nothing more to protect it. Any protection (such as encryption) would have to have been applied to the data or information before that data or information left the entity.
Choice “c” is incorrect. EDI does not have anything to do with the need to verify receipt of goods before making payment. Purchased goods should normally be received before payment is made (unless some kind of advance payment is being made). Once goods are received or payment is authorized by another means, the payment can be made, manually or by EDI, as appropriate.
Detroit Services Corporation provides services to various companies in the automotive industry. Detroit uses a CRM system. Which of the following statements is correct with respect to CRM systems?
a.
Both statements are correct.
b.
Neither statement is correct.
c.
CRM systems provide sales force automation and customer services.
d.
The objectives of CRM systems are to increase customer satisfaction and customer revenue.
Choice “a” is correct. Both statements are correct.
CRM systems provide sales force automation and customer services. CRM systems record and manage customer contacts, manage salespeople, forecast sales and sales targets and goals, manage sales leads and potential sales leads, provide and manage online quotes and product specifications and pricing, and analyze sales data. This statement is correct.
The objectives of CRM systems are to increase customer satisfaction and customer revenue. This statement is correct.
Choice “b” is incorrect, per the above explanation.
Which of the following allows customers to pay for goods or services from a web site while maintaining financial privacy?
a.
E-cash.
b.
Credit card.
c.
Electronic check.
d.
Site draft.
Choice “a” is correct. E-cash (also called digital cash) is currency in an electronic form that moves outside the normal channels of money. It maintains financial privacy just like real cash does. PayPal is a form of digital cash.
Choice “b” is incorrect. A credit card cannot be used to pay for goods or services while maintaining (complete) financial privacy. While a particular site may be very secure, the mere fact of presenting the credit card does not maintain financial privacy.
Choice “d” is incorrect. A “site draft” (which is actually a “sight draft” which means that it can be seen) is a draft, a negotiable instrument that is payable on demand. It does not maintain (complete) financial privacy any more than a check does.
Choice “c” is incorrect. An electronic check does not maintain financial privacy any more than a paper check does.
Electronic data interchange (EDI) is best described as:
a.
Computer-to-computer transactions for direct processing.
b.
An enterprise-wide database that stores data that has been extracted from other databases.
c.
A privately owned value added network.
d.
A Federal Reserve wire system used for electronic, computer-to-computer, money transfers.
Choice “a” is correct. By definition, EDI is the computer-to-computer exchange of business data in structured formats that allows direct processing of the data by the receiving system.
Choice “b” is incorrect. This accurately describes a data warehouse.
Choice “d” is incorrect. This accurately describes an electronic funds transfer.
Choice “c” is incorrect. EDI transactions may be transmitted using a VAN, but EDI is not a VAN by definition.
A research-based firm in the medical field could use each of the following Internet-based tools for collaboration, except:
a.
An e-mail application.
b.
Videoconferencing.
c.
Electronic data interchange.
d.
Groupware systems
Choice “c” is correct. Electronic data interchange (EDI) is a computer-to-computer exchange of business transaction documents. It is not a tool used specifically for collaboration between humans.
Choice “a” is incorrect. E-mail is certainly an appropriate Internet-based tool for collaboration.
Choice “b” is incorrect. Videoconferencing is a very effective Internet-based tool for communication and collaboration.
Choice “d” is incorrect. Groupware systems is another name for collaborative systems.
Engaging in traditional electronic data interchange (EDI) provides which of the following benefits?
a.
Guaranteed payments from customers.
b.
Reduced likelihood of stockout costs.
c.
Enhanced audit trails.
d.
Added flexibility to entice new partners.
Choice “b” is correct. EDI (electronic data interchange) is the exchange of business transaction documents from one computer to another. Because this exchange is significantly faster than paper exchanges, inventory can be reordered (and ultimately received) much faster than with traditional ordering systems. As a result, an inventory stockout becomes much less of a risk.
Choice “c” is incorrect. An EDI system does not automatically enhance audit trails. However, due to the risks associated with EDI (in particular, unauthorized access to organizational systems), enhanced audit trails becomes a critical requirement to have in place in order to effectively use EDI.
Choice “a” is incorrect. EDI does not guarantee payments from customers.
Choice “d” is incorrect. Because all transactions must be submitted in a standard format, EDI does not have the flexibility that other exchange formats may have.
Which of the following statements concerning Business-to-Business (B2B) transactions is/are correct?
I.
B2B commerce websites make purchasing decisions faster, simpler, and more cost effective because companies can do more research and transact business with many different vendors.
II.
B2B transactions are more secure than Business-to-Consumer (B2C) transactions because the government has policies and procedures to protect B2B transactions.
III.
B2B transactions occur electronically and are generally very reliable because computers are very precise and there is no opportunity for human error.
a.
I and II.
b.
I and III.
c.
II and III.
d.
I, II, and III.
Choice “b” is correct. Statements I and III are correct by definition. Statement II is incorrect. There are no government policies and procedures to protect B2B transactions.
Choices “a”, “c”, and “d” are incorrect, per the above explanation.
Transactions between businesses are frequently handled through electronic media. Business to business transactions, often called B2B transactions, typically happen:
a.
Through Internet, EDI, intranets or extranets.
b.
Only through Internet sites.
c.
E-mail verified by certified postal delivery.
d.
Only through pre-established Electronic Data Interchange (EDI) protocols.
Choice “a” is correct. Business to business (B2B) transactions typically occur through any number of different networks including the Internet, private corporate intranets, extranets, or Electronic Data Interchange (EDI) arrangements.
Choice “d” is incorrect. B2B is not required to take place only through a single network such a private Value Added Network (VAN) established to effect Electronic Data Interchange (EDI).
Choice “b” is incorrect. B2B is not required to take place only through a single network such as an intranet.
Choice “c” is incorrect. Confirmation of business transactions typically occurs online and does not require or generally even use hard copy confirmations mailed through the United States Postal Service.
