Chapter 3

Chapter 3—Electronic Business (E-Business) Systems

TRUE/FALSE

1. The involvement of two or more individuals and/or organizations in the completion of electronic-based business events is referred to as electronic commerce

ANS: T

2. Immediate mode is the data processing mode in which there is significant delay between two data processing steps.

ANS: F

3. Processes that include distribution, manufacturing, and accounting software operations are front office processes..

ANS: F

4. Periodic mode is the data processing mode in which there can be a significant delay between two data processing steps.

ANS: T

5. Batch processing is the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system.

ANS: T

6. A device that is not directly connected to the processing computer is referred to as an online device.

ANS: F

7. In an OLTE system, use of data entry devices allows business event data to be entered directly into the information system at the time and place that the event occurs.

ANS: T

8. A computer configuration in which certain equipment is directly connected to the computer is said to be online

ANS: T

9. OLRT systems gather business event data at the time of occurrence, update the master data essentially instantaneously, and provide the results arising from the event within a very short amount of time.

ANS: T

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10. Batch mode is the data processing mode in which there is little or no delay between any two data processing steps.

ANS: F

11. An OLTP system is a real-time system that performs all or part of the processing activities at the data entry terminal location.

ANS: T

12. Bar code readers are devices that use light reflection to read differences in patterns in order to identify a labeled item.

ANS: T

13. OLRT systems never use light reflection to recognize handwritten or printed characters.

ANS: F

14. An input device that captures printed images or documents and converts them into electronic digital signals that can be stored on computer media is called a Ethernet device..

ANS: F

15. Computer-based systems that capture, store, retrieve, and present images of real or simulated objects are called digital image processing systems or electronic document management systems.

ANS: T

16. Client server technology is the physical and logical division between user-oriented application programs that are run at the user level and the shared data that must be available through a common database.

ANS: T

17. VANs are communication networks that link together several different local user machines with printers, databases, and other shared devices.

ANS: F

18. LANs are communication networks that link up distributed users and local networks into an integrated communication network.

ANS: F

19. The Internet is a massive interconnection of computer networks worldwide that enables communication between dissimilar technology platforms.

ANS: T

Electronic Business (E-Business) Systems 37

20. Web browsers are software programs designed specifically to allow users to view the various documents and data sources available on the Internet.

ANS: T

21. A private data base service allows all subscribers to access and search external databases, usually through the Internet or a direct telephone line connection.

ANS: F

22. SPAM is unsolicited non-document mail that has largely been eliminated..

ANS: F

23. A type of intranet, which has been extended to limited external access, is referred to as an extranet.

ANS: T

24. E-mail is the electronic transmission of nonstandardized messages between two individuals who are linked via a communications network.

ANS: T

25. EDI is the capture, storage, management, and control of electronic document images for the purpose of supporting management decision making and facilitating business event processing.

ANS: F

26. EDM is the computer-to-computer exchange of business data in structured formats that allow direct processing of those electronic documents by the receiving computer system.

ANS: F

27. VAN service acts as the EDI "postman."

ANS: T

28. Internet commerce is computer-to-computer exchange of business event data in structured or semi-structured formats via Internet communication that allows the initiation and consummation of business events.

ANS: T

29. The benefits of electronic document management include improved staff productivity, reduced cost of handling and storing paper and faster processing.

ANS: T

30. Applications such as ANSI (X12), and EDIFACT are referred to as transaction software.

ANS: F

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31. Network providers are companies that provide a link into the Internet by making their directly connected networks available for access by fee-paying customers.

ANS: T

32. Internet assurance is a service provided for a fee to vendors in order to provide a limited endorsement to users of the vendor's web site that the site is in fact reliable and event data security is reasonable.

ANS: T

33. The AICPA Internet assurance program that includes a certification and seal is called VeriSign.

ANS: F

34. Electronic store fronts are Internet-located resources for displaying goods and services for sale and for conducting related sales transactions.

ANS: T

35. Extranet auction markets provide an Internet base for companies to place products up for bid or for buyers to put proposed purchases up for bid.

ANS: F

36. Internet market exchanges enable suppliers to put their products online, by feeding into electronic catalogs that sort through alternatives from different suppliers and electronically place an order.

ANS: T

MULTIPLE CHOICE

1. Back office functions include:a. customer interfaceb. supplier interfacec. Purchasingd. Accounting

ANS: D

2. A byproduct of e-Business isa. elimination of sales staffb. increase in accounting staffc. production of hard copy reportsd. increased errors

ANS: A

3. Increased efficiency in the purchasing function from e-Business includesa. the seller soliciting pricingb. automatic price checking by the computerc. decreased electronic based business eventsd. none of the above

ANS: B


4. The vast majority of e-Business isa. business to customerb. customer to customerc. business to businessd. none of the above

ANS: C

5. Airlines having direct ticketing over the Interneta. increases commissions of travel agentsb. enables the airlines to indirectly reach customersc. enables discontinuing commissions to travel agentsd. none of the above

ANS: C

6. Suggesting items to Internet customers based on their buying patternsa. is from the collection and analysis of customer purchase datab. is known as “shop at one location”c. has increased inventory levelsd. none of the above

ANS: A

7. One effect on Amazon.com of their partnering with Toys R Usa. is an example of B2Cb. increases inventory carrying costs for Amazon.comc. is a use of customer purchase data by Amazon.comd. none of the above

ANS: D

8. Online catalogs can be viewed through a(n):a. Browserb. Compilerc. plug-ind. Viewer

ANS: A

9. The processing mode in which there is a delay between the various data processing steps is referred to as:a. imperial modeb. periodic modec. immediate moded. passive mode

ANS: B

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10. In batch processing, business event data are usually entered by using a(n):a. imaging deviceb. inline devicec. offline deviced. point of sale (POS) device

ANS: C

11. A disadvantage of the periodic mode is:a. completenessb. Accuracyc. Validityd. Timeliness

ANS: D

12. The correct sequence of events for an automated equivalent to a manual system isa. business event occurs, update master data, record business event data, generate outputb. business event occurs, generate output, update master data, record business event datac. business event occurs, record business event data, update master data, generate outputd. none of the above

ANS: C

13. A disadvantage of periodic mode systems is a. online master data are only up to date right after the processing has been completedb. users can require on-demand reports from the system that are updated in real timec. query capability always exists to extract up to date datad. data is updated after every transaction

ANS: A

14. In a ___________ system, use of data entry devices allows business event data to be entered directly into the information system at the time and place the business event occursa. OLTEb. OLTDc. Periodicd. RFID

ANS: A

15. An online transaction entry (OLTE) system merges the traditional subprocesses of:a. business event occurs and record business event datab. business event occurs and update master datac. business event occurs and generate outputsd. record business event data and update master data

ANS: A


16. Systems that gather business event data at the time of occurrence, update the master data essentially instantaneously, and provide the results arising from the business event within a very short amount of time are referred to as:a. OLTEb. OLRTc. ORLTd. OLTP

ANS: B

17. The processing mode in which there is no or little delay between the various data processing steps is referred to as:a. imperial modeb. periodic modec. immediate moded. passive mode

ANS: C

18. A real-time system that performs all or part of the processing activities at the data entry terminal location is an:a. OLTEb. OLRTc. ORLTd. OLTP

ANS: D

19. A system that supports constantly up to date querying of data isa. OLTEb. OLRTc. ORLTd. OLTP

ANS: B

20. Devices that use light reflection to read differences in patterns in order to identify a labeled item are called:a. bar code readersb. optical character recognitionc. Scannersd. Printers

ANS: A

21. Which of the following is not an automated data entry method?a. bar code readersb. key-to-disk devicec. Scannerd. optical character recognition

ANS: B

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22. Digital image processing systems are capable of performing all of the following except:a. capture of datab. storage of datac. retrieval of datad. creation of data

ANS: D

23. The system that enables users of an ERP system to view source documents from any location is:a. electronic data interchangeb. local area networkc. digital image processingd. electronic commerce

ANS: C

24. The technology that is the physical and logical division between user-oriented application programs that are run at the client level and the shared data that must be available through a separate computer that handles centrally shared activities is:a. online real-time technologyb. client server technologyc. online transaction processing technologyd. online transaction entry

ANS: B

25. __________ is (are) communication networks that link several different local user machines with printers, databases, and other shared devices.a. WANsb. client server technologyc. LANsd. The Internet

ANS: C

26. All of the following are names for a public database service except:a. online database serviceb. electronic reference servicec. electronic retrieval serviced. referral service

ANS: D

27. All of the following are names for a public database service except:a. America Onlineb. CompuServec. Lexis/Nexisd. all of the above are names of public databases

ANS: D


28. Benefits of electronic data management (EDM) include all of the following excepta. reduced cost of handling and storing paperb. improved staff productivityc. faster processingd. less disk storage

ANS: D

29. Which of the following is not a cost of EDI?a. buying or leasing of hardware and softwareb. training employeesc. responsiveness to customers' needsd. reengineering applications

ANS: C

30. Electronic document management (EDM) includes all of the following except:a. capturing document imagesb. creating document imagesc. storing document imagesd. controlling document images

ANS: B

31. The benefits of electronic document management include all of the following except:a. improved staff productivityb. reduced computer processing requirementsc. reduced cost of handling and storing paperd. faster processing

ANS: B

32. Which of the following is not a benefit of electronic data interchange (EDI)?a. enables continued business with certain business partnersb. improved responsiveness to customers' needsc. providing timely and accurate datad. training employees

ANS: D

33. Which of the following is not a cost of electronic data interchange (EDI)?a. entering data only onceb. training employeesc. buying and leasing hardware and softwared. reengineering affected applications

ANS: A

34. Which of the following is most likely to be employed to protect data during transmission?a. Continuous auditingb. Expert systemsc. Data encryptiond. Access to EDI

ANS: C

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35. Which of the following are the two primary categories of E-Business over the web?a. Client and server relationshipsb. Networks and network providers c. Assurance providers and vendorsd. B2B & B2C

ANS: D

36. To simplify EDI between two or more companies, they should use a(n):a. OLTEb. VANc. OLTPd. OLRT

ANS: B

37. In EDI, the software that includes the purchasing system at the origin and the order entry system at the destination is known as a. OLTEb. VANc. the communications networkd. application software

ANS: D

38. The fastest-growing segment of electronic commerce is:a. electronic mailb. electronic document managementc. electronic data interchanged. Internet commerce

ANS: D

39. Which of the following is not a benefit of Internet commerce?a. maintaining security of the Internet siteb. improved responsiveness to customers' needsc. survival in a competitive industryd. global penetration

ANS: A

40. The risks to a business of Internet commerce include all of the following except:a. technological advances quickly antiquate hardware installationsb. hackers may attempt to access sensitive informationc. individuals or organizations may attempt to overload the system, preventing legitimate

customers from accessing the sited. business partners have access to sensitive information

ANS: A


41. WebTrust is a(n):a. e-mail programb. Internet providerc. Internet assurance serviced. electronic document management program

ANS: C

42. Which of the following Internet applications would not be categorized as a customer relationship management system?a. A customer can check their outstanding balance.b. A customer can design the product.c. A customer can download a software upgrade.d. A customer can determine the status or location of a product shipment.

ANS: B

COMPLETION

1. The involvement of two or more individuals and/or organizations in the completion of electronic-based business events is referred to as ____________________.

ANS: electronic business or e-commerce

2. Processes that include distribution, manufacturing, and accounting software operations are ____________________ processes..

ANS: back office

3. ____________________ is the data processing mode in which there can be a significant delay between two data processing steps.

ANS: Periodic mode

4. ____________________ is the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system.

ANS: Batch processing

5. A device that is not directly connected to the processing computer is referred to as a(n) ____________________ device.

ANS: offline

6. In a(n) ____________________ system, use of data entry devices allows business event data to be entered directly into the information system at the time and place that the event occurs.

ANS: online transaction entry (OLTE) system

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7. A computer configuration in which certain equipment is directly connected to the computer is said to be ____________________.

ANS: online

8. ____________________ systems gather business event data at the time of occurrence, update the master data essentially instantaneously, and provide the results arising from the event within a very short amount of time.

ANS: Online real-time (OLRT)

9. ____________________ is the data processing mode in which there is little or no delay between any two data processing steps.

ANS: Immediate mode

10. ____________________ systems gather business event data at the time of occurrence, update the mater data instantaneously, and provide results in a very short period of time.

ANS:OLRTOnline Real Time

11. A(n) ____________________ system is a real-time system that performs all or part of the processing activities at the data entry terminal location.

ANS: online transaction processing (OLTP)

12. ____________________ are devices that use light reflection to read differences in patterns in order to identify a labeled item.

ANS: Bar code readers

13. ____________________ uses light reflection to recognize handwritten or printed characters.

ANS: Optical character recognition

14. An input device that captures printed images or documents and converts them into electronic digital signals that can be stored on computer media is called a(n) ____________________.

ANS: scanner

15. Computer-based systems that capture, store, retrieve, and present images of real or simulated objects are called ____________________.

ANS: digital image processing systems or EDM

16. ____________________ is the physical and logical division between user-oriented application programs that are run at the user level and the shared data that must be available through a separate computer that handles centrally shared activities-such as databases and printing queues-between multiple users.

ANS: Client server technology


17. ____________________ are communication networks that link together several different local user machines with printers, databases, and other shared devices.

ANS: Local area networks (LANs)

18. ____________________ are communication networks that link up distributed users and local networks into an integrated communication network.

ANS: Wide area networks (WANs)

19. The ____________________ is a massive interconnection of computer networks worldwide that enables communication between dissimilar technology platforms.

ANS: Internet

20. ____________________ are software programs designed specifically to allow users to view the various documents and data sources available on the Internet.

ANS: Web browsers

21. A(n) ____________________ allows subscribers, for a fee, to access and search external databases, usually through the Internet or a direct telephone line connection.

ANS: public database service

22. A(n) ____________________ is unsolicited non-document mail.

ANS: SPAM

23. A smaller version of Internet technologies that is used to link an organization's internal documents and databases into a system that is accessible through web browsers or internally developed software designed to maximize the benefits from utilization of organization information resources is called a(n) ____________________.

ANS: intranet

24. ____________________ is the electronic transmission of nonstandardized messages between two individuals who are linked via a communications network.

ANS: Electronic mail (e-mail)

25. ____________________ is the capture, storage, management, and control of electronic document images for the purpose of supporting management decision making and facilitating business event processing.

ANS: Electronic document management (EDM) or digital image processing systems

26. ____________________ is the computer-to-computer exchange of business data in structured formats that allow direct processing of those electronic documents by the receiving computer system.

ANS: Electronic data interchange (EDI)

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27. A(n) ____________________ service acts as the EDI "postman."

ANS: value-added network (VAN)

28. ____________________ is computer-to-computer exchange of business event data in structured or semi-structured formats via Internet communication that allows the initiation and consummation of business events.

ANS: Internet commerce

29. Applications such as ANSI (X12), and EDIFACT are referred to as ______________________..

ANS: translation software

30. ____________________ are companies that provide a link into the Internet by making their directly connected networks available for access by fee-paying customers.

ANS: Network providers or Internet service providers

31. ____________________ is a service provided for a fee to vendors in order to provide a limited endorsement to users of the vendor's web site that the site is in fact reliable and event data security is reasonable.

ANS: Internet assurance

32. The AICPA Internet assurance program that includes a certification and seal is called ____________>

ANS: Web Trust

33. ____________________ are Internet-located resources for displaying goods and services for sale and for conducting related sales transactions.

ANS: Electronic store fronts

34. __________________________ provide an Internet base for companies to place products up for bid or for buyers to put proposed purchases up for bid.

ANS: Internet auction markets

35. __________________________ enable suppliers to put their products online, generally feeding into electronic catalogs that allow the buyer(s) to sort through alternatives from different suppliers and electronically place an order.

ANS: Internet market exchanges


PROBLEM

1. Discuss the advantages and disadvantages of the different modes of processing (i.e., OLTE, OLRT, and OLTP).

ANS:

AdvantagesOLTE OLRT OLTP

Data entered directly into the information system atthe time and place the transaction occurs.

Data entered directly into theinformation system at the time and place the transaction occurs.

Reduces or eliminates the delays caused from electronic communications between the terminal and the computer.

Eliminates the need to have one person enter business event data on a source document and then have a second person perform the data entry.

Transactions are processedindividually and master files are updated instantaneously.

Use of bar code readers andscanners aid in accuracy ofinputs

Allows reports and supportqueries to be accessed at anytime.

Can be used with the periodic mode of transaction processing.

DisadvantagesOLTE OLRT OLTP

May require using expensive software and hardware.

Requires expensive software,hardware, and communication systems.

Requires expensive software and hardware systems.

Master files may be out-of-date except after updating.

Transactions cannot be aggregated on a local computer to be transferred later to a data processing center.

2. Discuss the alternative methods (E-mail, EDI, and Internet) of conducting electronic commerce.

ANS:E-mail is the electronic transmission of nonstandardized messages between two individuals who are linked via a communications network. Businesses can use e-mail to target market potential buyers. This method of contacting customers is less expensive and more efficient than U.S. mail. However, the unstructured nature of e-mail makes data capturing more difficult. This can be overcome by including an electronic order form with the e-mail transmission. The use of e-mail may require some transaction keying by data entry personnel. In addition, the consumer may be hesitant to provide certain information via e-mail, since it is not a secured transmission vehicle.

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Electronic data interchange (EDI) is the computer-to-computer exchange of business data (i.e., documents) in structured formats that allow direct processing of those electronic documents by the receiving computer system. The benefits of EDI include: survival, improved responsiveness, elimination of reentering data at the receiving organization, reduction of mailroom and other document preparation and handling costs, increased timeliness and accuracy of data, the opportunity to redesign processes and controls. Costs include: modifying trading relationship and renegotiating contracts, buying or leasing hardware and software, establishing relationships with VANs and negotiating contracts, training employees, reengineering affected applications, and implementing security, audit, and control procedures. Control considerations include: ensuring proper authorization, having preventive rather than detective controls, and increased need for program change controls and physical security.

Internet commerce is the computer-to-computer exchange of transaction data in structured or semi-structured formats via Internet communication that allows the initiation and consummation of business events. In many cases, the goods (software or music) or services (airline reservations) that are contracted for through the Internet are immediately forwarded back to the consumer via the Internet as well. Benefits of Internet commerce include: survival, improved responsiveness, global penetration, elimination of reentering data at the receiving organization, reduction of mailroom and other document preparation and handling costs, increased timeliness and accuracy of data, the opportunity to redesign processes and controls. Costs include: organizational change, buying or leasing equipment and maintaining connection to the Internet, establishing new customers' connections, staffing and training of employees, and maintaining security of the Internet site.

3. Explain how the Internet and personal computers could be used in a college course such as AIS to eliminate all paper exchanged between the students and the professor. What technologies (hardware, software) you would need to carry out your plan. Be as specific as possible.

ANS:The answers will vary by student but should include items such as:Email for electronic communication and for exchange of files such as word processing files, spreadsheet files, and other files.Course websiteInternet based exams and or quizzesChatrooms and/or Threaded discussionDigital drop box for students to submit file to the instructorLinks to other documentsWord processing files, files with presentation slides, spreadsheets, or other files should be made available through either the website, CD, emailed, or otherwise made available to the studentsServer technology so all have access to common materials, database access (with limits for student access)Technologies needed include computers, for communication, hard drives, CD Burner or other disks, Internet access, browser software, word processing software, spreadsheet software, presentation slide software, and other software as needed.

Chapter 3

Documents

Transcript of Chapter 3