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Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
Chapter 2 How Businesses Use Information Systems
1) Enrolling employees in benefits plans is a business process handled by the finance and
accounting function.
2) Operational management is responsible for directing the day-to-day operations of the
business and therefore needs transaction-level information.
3) Functional systems that support business processes within a single functional group, such as
human resources, are being phased out in favor of cross-functional systems.
4) Transaction processing systems are most commonly used by the senior management level of
an organization.
5) In social business, firms use social networks for coordinating production tasks.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
6) A transaction processing system is a computerized system that performs and records the
daily routine transactions necessary to conduct business.
7) A hotel reservation system is a typical example of a management information system.
8) You would use an MIS to help decide whether to introduce a new product line.
9) Management information systems typically support nonroutine decision making.
10) Most MISs use sophisticated mathematical models or statistical techniques.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
11) Decision-support systems help managers make decisions that are unique, rapidly changing,
and not easily specified in advance.
12) Decision-support systems use internal information as well as information from external
sources.
13) Shipping a product to a customer is an example of a business process.
14) ESSs draw summarized information from internal MIS and DSS.
15) ESSs are designed primarily to solve specific problems.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
16) MIS job growth is projected to be 50% greater than other jobs in the next five years.
17) Enterprise systems often include transactions with customers and vendors.
18) Supply chain management systems are more externally oriented than enterprise systems.
19) A Skype conference call using VOIP and webcams is an example of a remote, synchronous
collaboration tool.
20) Synchronous collaboration tools allow global firms to collaborate from different locations at
the same time.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
21) A company’s business processes can be a source of competitive strength if they enable the
company to innovate or to execute better than its rivals.
22) Transaction processing systems are often so central to a business that TPS failure for a few
hours can lead to a firm’s demise and perhaps that of other firms linked to it.
23) Business intelligence addresses the decision-making needs at only the operational levels of
management.
24) Senior managers need systems that focus on strategic issues and long-term trends, both in
the firm and in the external environment.
25) Digital dashboards, which display, on a single screen, graphs and charts of key performance
indicators for managing a company, are becoming an increasingly popular tool for
management decision makers.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
26) Enterprise Systems, which display, on a single screen, graphs and charts of key performance
indicators for managing a company, are becoming an increasingly popular tool for
management decision makers.
27) The term management information systems (MIS) also designates a specific category of
information systems serving middle management.
28) Identifying customers is a responsibility of the ________ function.
A) finance and accounting
B) human resources
C) manufacturing and production
D) sales and marketing
29) Producing bills of materials is a business process within the ________ function.
A) finance and accounting
B) human resources
C) manufacturing and production
D) sales and marketing
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
30) Which of the following is an example of a cross-functional business process?
A) identifying customers
B) creating a new product
C) assembling a product
D) paying creditors
31) Which type of system would you use to change a production schedule if a key supplier was
late in delivering goods?
A) ESS
B) TPS
C) MIS
D) DSS
32) You have been hired by a worldwide non-profit agency to implement a system to handle
their donations. The system must be able to handle and record telephone, sms, and Internet
donations, provide up-to-the-minute reports, and create highly customizable mailing lists. In
addition, event fundraisers need to be able to quickly access a donor’s information and
history. Which of the following systems will best meet these needs?
A) TPS
B) TPS with DSS capabilities
C) TPS with MIS capabilities
D) TPS with ESS capabilities
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
33) To monitor the status of internal operations and the firm’s relations with the external
environment, managers need ________ systems.
A) decision-support
B) knowledge
C) transaction processing
D) management information
34) Which systems are typically a major source of data for other systems?
A) transaction processing systems
B) management information systems
C) executive support systems
D) decision-support systems
35) The term “management information systems” designates a specific category of information
systems serving
A) integrated data processing throughout the firm.
B) transaction process reporting.
C) employees with online access to historical records.
D) middle management functions.
36) Which type of system would you use to determine the five suppliers with the worst record
in delivering goods on time?
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) ESS
B) TPS
C) MIS
D) DSS
37) A relocation control system that reports summaries on the total moving, house hunting, and
home financing costs for employees in all company divisions would fall into the category of
A) knowledge management systems.
B) transaction processing systems.
C) executive support systems.
D) management information systems.
38) Non-typical business problems with causes and effects that are rapidly changing are
typically handled by which type of information system?
A) MIS
B) TPS
C) ESS
D) DSS
39) ________ systems are especially suited to situations in which the procedure for arriving at a
solution may not be fully defined in advance.
A) Management information
B) Transaction processing
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) Decision-support
D) Knowledge management
40) Which type of system would you use to forecast the return on investment if you used new
suppliers with better delivery track records?
A) ESS
B) TPS
C) MIS
D) DSS
41) ESS are specifically designed to serve which level of the organization?
A) operational
B) end-user
C) middle management
D) senior management
42) Executive support systems are information systems that support the
A) long-range planning activities of senior management.
B) knowledge and data workers in an organization.
C) decision making and administrative activities of middle managers.
D) day-to-day processes of production.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
43) Which systems often deliver information to senior executives through a portal, which uses a
Web interface to present integrated personalized business Knowledge?
A) transaction processing systems
B) executive support systems
C) management information systems
D) decision-support systems
44) Which type of system would you use to determine what trends in your supplier’s industry
will affect your firm the most in five years?
A) ESS
B) TPS
C) MIS
D) DSS
45) What is the most important function of an enterprise application?
A) increasing speed of communicating
B) enabling business functions and departments to share information
C) enabling a company to work collaboratively with customers and suppliers
D) enabling cost-effective e-business processes
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
46) ________ are designed to support organization-wide process coordination and integration.
A) Decision-support systems
B) Management information systems
C) CRM systems
D) Enterprise applications
47) A(n) ________ system collects data from various key business processes and stores the data
in a single, comprehensive data repository, usable by other parts of the business.
A) transaction
B) enterprise
C) automatic reporting
D) management information
48) The four major enterprise applications are
A) SCMs, CRMs, DSSs, and KMSs.
B) SCMs, CRMs, ESSs, and KMSs.
C) enterprise systems, SCMs, DSSs, and CRMs.
D) enterprise systems, SCMs, CRMs, and KMSs.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
49) Enterprise systems are also known as ________ systems.
A) resource planning
B) enterprise resource planning
C) enterprise support
D) management information
50) An example of a highly structured decision is
A) creating a new product.
B) estimating the effect of changing costs of supply materials.
C) calculating the best trucking routes for product delivery.
D) granting credit to a customer.
51) Telus’s use of SharePoint for team sites is an example of using information systems to
achieve which business objective?
A) customer and supplier intimacy
B) survival
C) improved decision making
D) operational excellence
52) Enabling management to make better decisions regarding organizing and scheduling
sourcing, production, and distribution is a central feature of
A) SCMs.
B) TPSs.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) KMSs.
D) ERPs.
53) ________ systems integrate supplier, manufacturer, distributor, and customer logistics
processes.
A) Collaborative distribution
B) Supply-chain management
C) Reverse logistics
D) Enterprise planning
54) ________ systems are designed to help firms manage their relationships with their
customers.
A) CRM
B) MIS
C) CLE
D) CLU
55) You are planning the launch of your new company, an application service provider that
provides an online timesheet and project tracking application. To best communicate with
and manage your relationship with your users, you would want to implement a(n)
A) extranet.
B) intranet.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) KMS.
D) CRM.
56) Which types of systems consolidate the relevant knowledge and experience in the firm to
make it available to improve business processes and management decision making?
A) TPS
B) extranets
C) KMS
D) CRM
57) You work for a highly successful advertiser that is just about to expand nationally. Of
utmost importance will be finding a way to store and disseminate their clients’ continually
updated branding guides, which include multiple image files and text documents, to all of
the firm’s branches. What system will best serve these needs?
A) an intranet with KMS capabilities
B) an extranet with KMS capabilities
C) a TPS with KMS capabilities
D) a CRM
58) You have been hired by Inspiration Inc., to help improve their profit margin. Inspiration Inc.
is a business communications consultancy that services many clients in different industries
throughout the United States. The end products of the company are customized
recommendations for the best use of a client’s existing resources for improving internal
communications, typically delivered via documentation in different media. The company
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
has approximately 100 consultants, all of whom are located in their central headquarters in
Chicago. What system do you recommend to improve the company’s business processes and
increase their profit margin?
A) extranet, to enable quick collaboration over the Internet, minimize the time spent
communicating with the client, and minimize the amount of paperwork needed
B) CRM, to maintain easily accessible customer records to minimize the time spent looking
for client data
C) KMS, for minimizing redundant work on similar clients
D) marketing system, for improving sales levels
59) You manage the IT department at a small startup Internet advertiser. You need to set up
an inexpensive system that allows customers to see real-time statistics such as views and
click-throughs about their current banner ads. Which type of system will most efficiently
provide a solution?
A) CRM
B) enterprise system
C) extranet
D) intranet
60) Which of the following types of system helps coordinate the flow of information between
the firm and its suppliers and customers?
A) intranet
B) extranet
C) KMS
D) TPS
