Electronic Commerce 2012 7E Test Bank Chapter 4

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Electronic Commerce 2012, 7e (Turban)

Chapter 4 B2B E-Commerce

4.1 True/False

Question: B2B e-commerce refers to transactions between businesses that are conducted

electronically over the public Internet only.

Answer:

FALSE

Diff: 1 Page Ref: 147

Question: The availability of a secure broadband Internet platform is one of the key drivers

of B2B EC.

Answer:

TRUE

Diff: 1 Page Ref: 147

Question: B2B EC marketplaces that involve one seller selling to many buyers is called an

exchange.

Answer:

FALSE

Diff: 1 Page Ref: 147

Question: In one-to-many and many-to-one marketplaces, if all selling is done by one

company, it is a buy-side market.

Answer:

FALSE

Diff: 2 Page Ref: 147

Question: In company-centric marketplaces, the individual company has very little control

over who participates in selling or buying transactions.

Answer:

FALSE

Diff: 2 Page Ref: 147

Question: E-marketplace exchanges are usually owned and run by a third party or by a

consortium.

Answer:

TRUE

Diff: 2 Page Ref: 147

Question: Market forecasters estimate that by 2012 the global B2B market, both online and

offline, could reach $1 trillion.

Answer:

FALSE

Diff: 2 Page Ref: 148

Question: Businesses deal with other businesses for purposes beyond just selling or

buying. One example is that of collaborative commerce, which includes communication,

design, planning, and information sharing among business partners.

Answer:

TRUE

Diff: 2 Page Ref: 148

Question: Intermediaries in B2B commerce that broker transactions between buyers and

sellers are third-parties that are either virtual or brick-and-mortar.

Answer:

TRUE

Diff: 2 Page Ref: 149

Question: Spot buying refers to the purchasing of goods and services according to a

schedule, usually at prevailing market prices that are determined by supply and demand.

Answer:

FALSE

Diff: 2 Page Ref: 149

Question: Stock exchanges and commodity exchanges (such as oil and sugar) are examples

of spot buying.

Answer:

TRUE

Diff: 1 Page Ref: 149

Question: Strategic sourcing refers to purchasing involving long-term contracts that

usually are based on private negotiations between sellers and buyers.

Answer:

TRUE

Diff: 2 Page Ref: 149

Question: Computers and communication devices are two examples of direct materials for

a food processing company.

Answer:

FALSE

Diff: 2 Page Ref: 150

Question: MRO, which stands for “maintenance, repair, and operation,” refers to the

indirect materials used in activities that support production.

Answer:

TRUE

Diff: 2 Page Ref: 150

Question: Horizontal marketplaces are markets that concentrate on a service, material, or a

product that is used in all types of industries.

Answer:

TRUE

Diff: 2 Page Ref: 150

Question: Maverick buying refers to the planning, organizing, and coordinating of all the

activities pertaining to the purchasing of the goods and services necessary to accomplish

the mission of an enterprise.

Answer:

FALSE

Diff: 2 Page Ref: 162

Question: Reverse auctions are one method of electronic procurement that is very popular

with public organizations where tendering is usually mandatory.

Answer:

TRUE

Diff: 3 Page Ref: 167

Question: Aggregating the catalogs of all approved suppliers and combining them into a

single electronic catalog is an effective solution for internal procurement because it

minimizes maverick buying.

Answer:

TRUE

Diff: 3 Page Ref: 169

Question: Caltex, a multinational oil company, reduced the number of its suppliers from

over 3,000 to 800 by implementing a central catalog for internal purchasing, lowering the

per unit prices.

Answer:

TRUE

Diff: 3 Page Ref: 169

Question: Exchanges can be vertical or horizontal.

Answer:

TRUE

Diff: 1 Page Ref: 172

Question: By law, exchanges cannot be owned by a consortium.

Answer:

FALSE

Diff: 3 Page Ref: 174

Question: Anonymity is a key ingredient of dynamic pricing.

Answer:

TRUE

Diff: 2 Page Ref: 175

Question: A vertical portal is an exchange formed and operated by a group of major

companies in an industry to provide industry-wide transaction services.

Answer:

FALSE

Diff: 3 Page Ref: 175

Question: Dynamic pricing is the rapid movement of prices over time and possibly across

customers, as a result of supply and demand matching.

Answer:

TRUE

Diff: 1 Page Ref: 175

Question: Loss of customer service quality is a potential risk for buyers in B2B exchanges.

Answer:

TRUE

Diff: 2 Page Ref: 176

Question: Potential gains for sellers in B2B exchanges include less maverick buying.

Answer:

FALSE

Diff: 3 Page Ref: 176

Question: Corporate portals are major gateways through which employees, business

partners, and the public can enter a corporate website.

Answer:

TRUE

Diff: 2 Page Ref: 177

Question: Executive and supervisor portals are used for training, dissemination of

company news, information, and discussion groups.

Answer:

FALSE

Diff: 3 Page Ref: 179

Question: Mobile portals are accessible via mobile devices.

Answer:

TRUE

Diff: 1 Page Ref: 179

Question: Alibaba.com requires buyers to pay for sourcing.

Answer:

FALSE

Diff: 3 Page Ref: 181

Question: Creating brand awareness is an advantage of B2B social networking.

Answer:

TRUE

Diff: 2 Page Ref: 182-183

Question: Social networks are used extensively in the B2B marketplace.

Answer:

FALSE

Diff: 3 Page Ref: 183

Question: Googles OpenSocial is a programming standard that lets developers create

applications that can run on a wide range of social networking platforms, which may

increase B2B social networking.

Answer:

TRUE

Diff: 2 Page Ref: 185

Question: The marketing and advertising processes used for B2B and B2C are remarkably

similar.

Answer:

FALSE

Diff: 2 Page Ref: 186

Question: Affiliate programs, infomediaries, and online data and text mining services are

three popular B2B marketing and advertising methods.

Answer:

TRUE

Diff: 1 Page Ref: 187

4.2 Multiple Choice

Question: Key business drivers for B2B include each of the following except

A) the availability of a secure broadband Internet platform.

B) the ability to reduce delays.

C) the willingness of companies to incur higher costs to improve collaboration.

D) the need for collaborations between suppliers and buyers.

Answer:

Diff: 1 Page Ref: 147

AACSB: Use of information technology

Question: E-commerce that focuses on a single companys buying needs or selling needs

best defines

A) computer exchange.

B) business-to-business e-commerce.

C) private marketplace.

D) company-centric EC.

Answer:

Diff: 2 Page Ref: 147

Question: Many-to-many e-marketplaces, usually owned and run by a third party or a

consortium, in which many buyers and many sellers meet electronically to trade with each

other best describes

A) exchanges.

B) public market.

C) company-centric EC.

D) spot purchases.

Answer:

Diff: 1 Page Ref: 147

Question: B2B transactions that involve communication, design, planning, information

sharing, and activities beyond financial transactions among business partners defines

A) exchanges.

B) collaborative commerce.

C) trading communities.

D) public marketplaces.

Answer:

Diff: 3 Page Ref: 148

AACSB: Use of information technology

Question: An online third party that brokers a transaction online between a buyer and a

seller best describes

A) strategic source.

B) horizontal marketplace.

C) vertical marketplace.

D) online intermediary.

Answer:

Diff: 2 Page Ref: 149

AACSB: Use of information technology

Question: Types of B2B transactions include

A) strategic sourcing.

B) randomized buying.

C) intermediation.

D) reverse purchasing.

Answer:

Diff: 2 Page Ref: 149

Question: The purchase of goods and services as they are needed, usually at prevailing

market prices, best defines

A) direct materials.

B) consolidation.

C) spot buying.

D) strategic sourcing.

Answer:

Diff: 2 Page Ref: 149

AACSB: Use of information technology

Question: Purchases of goods and services based on long-term contracts best defines

A) direct materials.

B) consolidation.

C) spot buying.

D) strategic sourcing.

Answer:

Diff: 2 Page Ref: 149

AACSB: Use of information technology

Question: Which of the following can be supported more effectively and efficiently

through direct buyer-seller negotiations?

A) strategic sourcing

B) spot buying

C) B2C e-commerce

D) MRO

Answer:

Diff: 2 Page Ref: 150

AACSB: Use of information technology

Question: Materials used in the production of a product best defines

A) indirect materials.

B) direct materials.

C) MRO materials.

D) production materials.

Answer:

Diff: 2 Page Ref: 150

Question: Two types of materials and supplies that are traded in B2B are

A) digital and physical.

B) direct and indirect.

C) horizontal and vertical.

D) commodities and nonproduction.

Answer:

Diff: 1 Page Ref: 150

AACSB: Use of information technology

Question: Materials used to support production are called

A) indirect materials.

B) operational materials.

C) direct materials.

D) virtual materials.

Answer:

Diff: 2 Page Ref: 150

AACSB: Use of information technology

Question: The major B2B service industries include each of the following except

A) travel and hospitality services.

B) financial services.

C) banking and online financing.

D) retail.

Answer:

Diff: 2 Page Ref: 151-152

AACSB: Use of information technology

Question: Which of the following is not one of the major benefits of B2B for both buyers

and sellers?

A) expedites processing and reduces cycle time

B) reduces procurement costs

C) enables customized online catalogs with different prices for different customers

D) increases opportunities for collaboration

Answer:

Diff: 3 Page Ref: 153

AACSB: Use of information technology

Question: A business strategy that focuses on providing comprehensive quality service to

business partners best defines

A) customer relationship management.

B) supplier relationship management.

C) partner relationship management.

D) supply chain management.

Answer:

Diff: 3 Page Ref: 153

Question: A comprehensive approach to managing an enterprises interactions with the

organizations that supply the goods and services it uses best defines

A) customer relationship management.

B) supply chain management.

C) partnership relationship management.

D) supplier relationship management.

Answer:

Diff: 3 Page Ref: 153

Question: All are benefits of B2B except

A) creates new sales or purchase opportunities.

B) eliminates paper and reduces administrative costs.

C) increases channel conflict.

D) lowers search costs and time for buyers to find products and vendors.

Answer:

Diff: 1 Page Ref: 153

AACSB: Use of information technology

Question: A Web-based marketplace in which one company sells to many business buyers

from e-catalogs or auctions, frequently over an extranet, describes

A) sell-side e-commerce.

B) single-side e-commerce.

C) buy-side e-commerce.

D) reflective e-commerce.

Answer:

Diff: 1 Page Ref: 154

AACSB: Use of information technology

Question: Several benefits of Microsofts ________ 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.

A) extranet-based order-entry tool

B) electronic data interchange

C) customized catalog

D) auto-responder

Answer:

Diff: 3 Page Ref: 155

AACSB: Use of information technology

Question: High-quality bicycle manufacturer Greggs Cycles does not sell its products

online, nor do they allow their bicycles to be sold online by others. By not selling online,

Greggs Cycles avoids ________ with its dealers and the independent bike shops that sell

its bikes.

A) pricing conflict

B) channel conflict

C) multichannel distribution

D) disintermediation

Answer:

Diff: 2 Page Ref: 155

AACSB: Use of information technology

Question: 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

A) no hiring costs.

B) no redeployment of corporate resources.

C) time-to-market of several weeks.

D) no need for additional resources such as hardware, bandwidth, or IT personnel.

Answer:

Diff: 3 Page Ref: 160

AACSB: Use of information technology

Question: Companies use ________ to sell their unneeded assets for quick disposal or to

dispose of excess, obsolete, and returned products.

A) private auctions

B) liquidation

C) reverse auctions

D) forward auctions

Answer:

Diff: 2 Page Ref: 160

AACSB: Use of information technology

Question: A characteristic that describes customer loyalty to a site that eventually results in

higher revenue best defines

A) retention.

B) acquisition.

C) stickiness.

D) attachment.

Answer:

Diff: 2 Page Ref: 160

Question: A corporate-based acquisition site that uses reverse auctions, negotiations, group

purchasing, or any other e-procurement method best defines

A) desktop procurement method.

B) buy-side e-marketplace.

C) intermediary.

D) aggregated catalog.

Answer:

Diff: 3 Page Ref: 162

AACSB: Use of information technology

Question: The planning, organizing, and coordinating of all the activities relating to

purchasing goods and services needed to accomplish the organizations mission best

defines

A) buy-side e-marketplace.

B) supply chain management.

C) procurement management.

D) customer relationship management.

Answer:

Diff: 2 Page Ref: 162

Question: Unplanned purchases of items needed quickly, often at non-prenegotiated higher

prices, best defines

A) impulse purchases.

B) free market.

C) MRO purchasing.

D) maverick buying.

Answer:

Diff: 2 Page Ref: 162

Question: Major procurement methods include

A) buying at an exchange or industrial mall.

B) buying at private or public auction sites in which the organization participates as one of

the buyers.

C) buying directly from manufacturers, wholesalers, or retailers from their catalogs, and

possibly by negotiation.

D) all of the above.

Answer:

Diff: 1 Page Ref: 163

Question: The electronic acquisition of goods and services for organizations via the

Internet or private network best defines

A) e-procurement.

B) spot buying.

C) resource acquisition.

D) MRO planning.

Answer:

Diff: 1 Page Ref: 163

Question: Using Internet technology to buy goods and services from a number of known or

unknown suppliers best defines

A) e-reverse auctioning.

B) e-tendering.

C) e-sourcing.

D) e-informing.

Answer:

Diff: 2 Page Ref: 165

Question: Types of e-procurement include

A) E-MRO.

B) E-market sites.

C) E-informing.

D) all of the above.

Answer:

Diff: 1 Page Ref: 165-166

Question: Gathering and distributing purchasing information both from and to internal and

external parties using Internet technology best defines

A) e-tendering.

B) e-informing.

C) e-sourcing.

D) e-MRO.

Answer:

Diff: 2 Page Ref: 166

Question: E-procurement benefits include each of the following except

A) reducing the number of suppliers.

B) ensuring delivery on time, every time.

C) ease of internal and external integration.

D) improving information flow and management.

Answer:

Diff: 3 Page Ref: 166

Question: E-procurement limitations and challenges include each of the following except

A) the technology needs to be updated frequently.

B) the system may be too complex.

C) the cost may be too high.

D) the ease of getting suppliers to cooperate electronically.

Answer:

Diff: 3 Page Ref: 167

Question: Which of the following is the unplanned, emergency-type buying where buyers

usually pay more?

A) maverick buying

B) spot buying

C) impulse purchasing

D) extreme purchasing

Answer:

Diff: 2 Page Ref: 169

Question: Advantages of using internal catalogs include

A) decreasing the number of suppliers.

B) easy financial controls.

C) using search engines to look through internal catalogs.

D) all of the above.

Answer:

Diff: 1 Page Ref: 169

Question: The aggregated catalogs of all approved suppliers combined into a single

internal electronic catalog defines

A) bartering exchange.

B) buy-side e-marketplace.

C) sell-side e-marketplace.

D) internal procurement marketplace.

Answer:

Diff: 3 Page Ref: 169

AACSB: Use of information technology

Question: An example of a successful aggregation of suppliers catalogs is that of

________, which aggregates more than 10,000 items from the catalogs of approved

suppliers into an internal electronic catalog.

A) MasterCard International

B) Amazon.com

C) Google

D) Priceline.com

Answer:

Diff: 2 Page Ref: 169

AACSB: Use of information technology

Question: Direct purchasing from internal marketplaces without the approval of

supervisors and without the intervention of a procurement department best defines

A) spot buying.

B) desktop purchasing.

C) maverick buying.

D) renegade purchasing.

Answer:

Diff: 2 Page Ref: 170

Question: With a bartering exchange, a company submits its surplus to the exchange and

receives

A) points of credit, which the company can then use to buy items that it needs.

B) an equivalent amount of products or services.

C) interest payments until it buys something from the exchange.

D) cash minus a small commission for services.

Answer:

Diff: 2 Page Ref: 171

AACSB: Use of information technology

Question: B2B portals that focus on a single industry or industry segment best describes

A) local portals.

B) information portals.

C) vortals.

D) collaborative portals.

Answer:

Diff: 3 Page Ref: 176

Question: Portals that store data and enable users to navigate and query these data are

A) collaborative portals.

B) information portals.

C) mobile portals.

D) MRO portals.

Answer:

Diff: 2 Page Ref: 179

Question: The main uses of social networks include

A) reducing the number of suppliers.

B) encouraging maverick purchases.

C) learning useful business intelligence.

D) driving traffic to online Web properties.

Answer:

Diff: 2 Page Ref: 184

Question: Which of the following companies uses viral videos to promote renewals of

Care Pack Service agreements?

A) Reed Business Information

B) Cisco Systems

C) Arketi Group

D) Hewlett-Packard

Answer:

Diff: 2 Page Ref: 184

Question: Marketing by manufacturers and wholesalers along the sell-side of the supply

chain best defines

A) B2C marketing.

B) B2B marketing.

C) M2W marketing.

D) M2B purchasing.

Answer:

Diff: 2 Page Ref: 185

Question: Denver Boards, a B2B manufacturer of snowboard equipment, can reach and

target new retail customers in order to grow its online business by

A) hiring an affiliation service to drive traffic to its Web site.

B) reviewing POS data.

C) mining data.

D) advertising in traditional media.

Answer:

Diff: 3 Page Ref: 187

4.3 Essay

Question: List and briefly describe the four basic types of B2B transactions and activities.

Answer:

The four basic types of B2B transactions and activities are sell-side, buy-side, exchanges,

and supply chain improvements and collaborative commerce. While sell-side refers to one

seller to many buyers, buy-side refers to one buyer from many sellers. Exchanges involve

many sellers to many buyers. Supply chain improvements and collaborative commerce

refers to activities, other than buying or selling, among business partners, such as supply

chain improvements, communication, collaboration, and information sharing for joint

design and planning.

Diff: 1 Page Ref: 147-148

Question: List five major benefits of B2B for buyers or sellers or both.

Answer:

Major benefits of B2B for buyers, sellers, or both include (

Question: Identify five of the seven types of e-procurement.

Answer:

E-sourcing, e-tendering, e-reverse auctioning, e-informing, web-based ERP, e-market sites,

and e-MRO are seven types of e-procurement.

Diff: 2 Page Ref: 165-166

Question: What are the three major functions of exchanges?

Answer:

The three major functions of exchanges are matching buyers and sellers, facilitating

transactions, and maintaining exchange policies and infrastructure.

Diff: 1 Page Ref: 173

Question: List five generic types of portals.

Answer:

The five generic types of portals are portals for suppliers and other partners, customer

portals, employee portals, executive and supervisor portals, and mobile portals.

Diff: 1 Page Ref: 178-179