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82) A company needs a new information system to manage increasing customer orders and
changing demands. The company's five-member information system (IS) team is competent and
capable of developing a new system, but decides against developing a system in-house. Which of
the following, if true, would most weaken the company's decision?
A) The company's preferred vendor is willing to provide a basic information system at a reduced
rate.
B) The company's IS team is short-staffed, and is finding it difficult to cope with increased work.
C) The costs of outsourcing systems development are greater than those of adapting an off-the-
shelf system.
D) The company's IS department has the qualifications to develop the new system.
E) The company's requirements for the new system are very specialized.
Difficulty: Difficult
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Synthesis
83) Which of the following steps distinguishes external acquisition process from in-house
development?
A) systems planning and selection
B) systems analysis
C) development of a request for proposal
D) proposal evaluation
E) vendor selection
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Application
84) A ________ is a document that an organization uses to tell vendors what its requirements are
and to invite them to provide information about how they might be able to meet those
requirements.
A) request letter
B) vendor request
C) request for proposal
D) requirements specification
E) demand letter
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
29
85) ________ is the use of standardized performance tests to facilitate comparison between
systems.
A) Beta testing
B) Systems benchmarking
C) Data modeling
D) Systems prototyping
E) Alpha testing
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
86) A company has submitted a request for proposals to a number of vendors. It must now
evaluate the proposals it has received. Which of the following methods can it use to compare the
different systems?
A) systems benchmarking
B) alpha testing
C) data modeling
D) beta testing
E) prototyping
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Application
87) ________ licenses are activated as soon as the packaging of the software has been removed.
A) Click-wrap
B) Shareware
C) Shrink-wrap
D) Volume
E) Implied
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
30
88) A(n) ________ license refers to a license primarily used for downloaded software that
requires computer users to choose "I accept" before installing the software.
A) click- wrap
B) shareware
C) enterprise
D) volume
E) implied
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
89) An enterprise license is also known as a(n) ________ license.
A) shrink-wrap
B) volume
C) click-wrap
D) shareware
E) implied
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
90) Which of the following is true of Software as a Service?
A) It is not scalable in response to large increases in demand.
B) It involves fixed monthly and yearly costs for the services.
C) It requires the installation of specialized interfaces at the client end.
D) It allows clients to access services on an as-needed basis.
E) It requires an organization to maintain and develop the software.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
31
91) BelAir has developed and run its own information system for the past ten years. However,
the company has now decided to outsource its information systems (IS) function to a service
provider. Which of the following, if true, will strengthen BelAir's decision?
A) BelAir's IS team developed the existing system from scratch and has ironed out most of the
faults over the years.
B) The service provider is highly recommended by its other clients.
C) Most BelAir employees are familiar with the current information system.
D) BelAir has seen a fall in its revenue over the last year.
E) Outsourcing its IS function did not benefit BelAir's competitor, Amis Systems.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Synthesis
92) Which of the following is an example of a basic relationship between an outsourcing vendor
and client?
A) STS Systems usually offers BelAir a discount on every purchase it makes.
B) BelAir sets its system preferences according to STS products.
C) BelAir buys a system from the vendor who offers the cheapest prices.
D) STS has a direct stake in the success of BelAir's performance.
E) STS modifies its product prices according to BelAir's requirements.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Application
93) Purchasing an existing system from an outside vendor is referred to as external acquisition.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
94) A request for proposal (RFP) is sent to buyers who might potentially be interested in buying
hardware and/or software for the system.
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
32
95) Systems benchmarking is the use of standardized performance tests to facilitate comparison
between systems.
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
96) Public domain software severely restricts access to the source code and does not give users
any rights to copy or modify the software.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
97) In a basic relationship, the buyer and the supplier set preferences and prices to benefit each
other.
Difficulty: Easy
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
33
98) Describe the steps in the external acquisition process for information systems.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
34
99) What is a request for proposal (RFP)? What areas does a request for proposal cover?
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
100) Explain why a firm might choose to outsource its information systems (IS) services.
• Internal irritants: Tension between end users and the IS staff is sometimes difficult to eliminate.
At times this tension can intrude on the daily operations of the organization, and the idea of a
remote, external, relatively neutral IS group can be appealing.
Difficulty: Moderate
Learning Obj.: 9.3: Explain how organizations acquire systems via external acquisition and
outsourcing.
Classification: Concept
36
