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Chapter 1 Overview of Electronic Commerce

1-According to Peter Drucker, e-commerce is profoundly changing markets, industry


structures, products and services, consumer segmentation, consumer values and consumer
behavior; jobs, and labor markets.
True

False

2-By purchasing a textbook from Amazon.com and having the merchandise physically
delivered, Amazon.com would be considered a click-and-mortar organization because pure
EC did not occur.
True

False

3-In the field, a sales representative writes notes with a mobile handwriting-recognition
computer immediately after a sales call. This can be viewed as an EC activity.
True

False

4-In addition to EC being conducted via the Internet, EC can be conducted over local area
networks (LANs).
True

False

5-An example of business-to-consumer (B2C) is when Dell provides customer service online
by collaborating electronically with its partners.
True

False

6-An internal corporate network that uses Internet tools, such as Web browsers, is known
as an intranet.
True

False

7-An extranet is a network that uses the Internet to link together multiple intranets.
True

False

8-Purchasing a Dell computer online for use at home is an example of e-tailing.


True

False

9-Networked computing connects multiple computers and other electronic devices that are
located in various locations by telecommunications networks, including wireless ones.
True

False

10-When Dell purchases Godiva chocolates as gifts for its employees and has Godiva mail
them directly to the recipient Dell is engaged in B2B2C.
True

False

11-Peer-to-peer (P2P) technology can be used in C2C, B2B, and B2C.


True

False

12-The final participants in B2B transactions are consumers.


True

False

13-Doing your banking on an Internet-enabled cell phone is an example of m-commerce.


True

False

14-Despite the many e-tailing EC companies that have failed in the past, the dot-com
failure rate has recently declined sharply.
True

False

15-Since 2001, no other company has had more of an impact on EC than MySpace.
True

False

16-Wikipedia.com, a Web site that allows people to work together online and share
information, is an example of Web 2.0.
True

False

17-The digital economy refers to an economy based on digital communication networks,


computers, software, and other related information technologies that provide a global
platform over which people and organizations interact, communicate, collaborate, and
search for information.
True

False

18-Economic, legal, societal, and technological factors have created a highly competitive
business environment in which customers are becoming less powerful.
True

False

19-Strong competition and increased power of consumers are two of the major market
pressures in today's business environment.
True

False

20-Business models are a subset of a business plan or business case and refer to methods of
doing business by which a company can generate revenue.
True

False

21-A business model outlines how the organization or the EC project will generate revenue
through sales, transaction fees, advertising fees, affiliate fees, or other revenue sources.
True

False

22-A value proposition refers to the tangible and intangible benefits that a company can
derive from using EC making it an important part of the marketing plan.
True

False

23-Affiliate marketing is an EC business model of word-of-mouth marketing in which


customers promote a product or service to friends or other people.
True

False

24-Social networks, such as Facebook, YouTube, and MySpace, are Web sites that connect
people with specific interests by providing free services such as photo sharing, e-mail, and
blogging.
False

True

25-Many companies used a corporate portal, which is a gateway for customers, employees,
and partners to reach corporate information and communicate with the company.
False

True

26-Dell's cornerstone business model is based on the concept of:


selling directly to
small and medium
sized businesses.

rapid business
build-to-order which allows
growth and
customers to configure their
threatening
own customized systems.
competitors.

e-collaboration with a
few select business
partners.

27-________ refers to the buying and selling of goods and services; servicing of customers;
collaborating with business partners; and conducting electronic transactions within an
organization.
Partial EC

E-business

Pure EC

E-commerce

28-EC can take several forms depending on the degree of digitization of the following three
dimensions:
the product or
service sold, the
process, and the
delivery method.

the payment method,


the marketing channel,
the delivery method,
the agent, and the
and the production
collaboration method.
method.

the business process,


the collaboration, and
the transaction.

29-Purely physical companies are referred to as ________ companies, whereas companies


that are engaged only in EC are considered ________ companies.
virtual; pure play click-and-mortar; click-and-brick brick-and-mortar; virtual pure play; virtual

30-The ways in which EC is done include:


the Internet,
the Internet, value-added networks, on
the Internet
extranets, and
local area networks using intranets, or on
and extranets.
private networks.
a single computerized machine.

the Internet and


private
networks.

31-________ are systems where only routine transaction processing and information flow
take place between two or more organizations using a standard protocol, such as electronic
data interchange (EDI).
Intrabusiness EC

E-CRM

B2B

Interorganizational information systems

32-A business such as Apple Computers making online transactions with its trading
partners is an example of:
e-CRM

EDI

B2C

B2B

33-EC applications are supported by infrastructure and by each of the following support
areas EXCEPT:
People

Marketing and advertisement

Mobile devices

Public policy

34-Intrabusiness EC is usually performed over intranets and/or ________.


P2P networks

exchanges

mobile networks

corporate portals

35-A technology that is used to electronically transfer routine documents, such as invoices
and purchase orders, and for financial transactions is ________.
Exchange-to-exchange Electronic data interchange

Electronic funds transfer Peer-to-peer

36-Challenges that Boeing faced with its global collaboration for the design and assembly
process of its new Dreamliner passenger plane included each of the following EXCEPT:
Information security Lag time Teams working across various time zones

Data management

37-A large number of EC companies, especially e-tailing and B2B ones, failed from 1999 to
2005 for each of the following reasons EXCEPT:
The companies failed to ensure
The companies The companies had
they had sufficient inventory and
lacked financial little marketing
a distribution setup to meet
skills.
experience.
initial demand.

The companies failed to


register with search
engines, such as
Google.

38-________ refers to the second-generation of Internet-based services that let people


collaborate and share information online in new ways, such as social networks and wikis.
Virtual Web

Social Web

Media Web

Web 2.0

39-Which of the following is not a characteristic of the Digital Revolution?


A high rate of
obsolescence.

Intelligent search agents to Fraud and other


help manage information cybercons carried out
overload.
via the Internet.

Many business processes


are expedited by up to
50 percent.

40-Because the rate of change and the level of uncertainty are expected to accelerate,
organizations are
considering less
information when
making decisions.

operating under increasing


pressures to produce more
products, faster, and with
fewer resources.

making fewer
unable to react quickly
decisions and/or
enough to threats and
decisions less
opportunities.
frequently.

41-According to the Business Environment Impact Model, ________ provide support to


organizations' activities and to actual performance, countering business pressures.
core competencies and critical response
activities

missions and
strategies

EC and
IT

markets and
government

42-A ________ is a company's method of doing business to generate revenue to sustain


itself.
marketing strategy

business model

business plan

value chain

43-According to the ________ revenue model, companies receive commissions for referring
customers to others' EC Web sites.
affiliate fees

advertising fees

subscription fees

transaction fees

44-According to the ________ revenue model, customers page a fixed amount, usually
monthly, to receive some type of service.
transaction fees

affiliate fees

subscription fees

advertising fees

45-Large private organizational buyers and government agencies make large-volume or


large-value purchases through ________, also known as reverse auctions.
name-your-own-price
models

viral
marketing

online direct
marketing

electronic tendering
systems

46-According to the ________ model, an organization can increase brand awareness or


even generate sales by Web-based word-of-mouth marketing or promoting a product or
service to other people.
electronic tendering
systems

viral
marketing

name-your-own-price
models

online direct
marketing

47-Online group purchasing organizations are known as:


e-co-ops

SMEs

exchanges

barters

48-Major barriers to EC include all of the following EXCEPT:


implementation difficulties

lack of technology

lack of potential customers

49-Which of the following is a technological limitation of EC?

cost

Difficulty
Security and privacy
obtaining venture concerns that deter
capital.
customers from buying.

Unresolved taxation,
Order fulfillment
public policy, and legal requirements of largeissues.
scale B2C.

50-A job opening in the Sales Department posted on the company's Intranet by the Human
Resources Department is an example of:
B2S

B2E

E2C

B2B

51-Boeing designing a product together with a business partner is this type of interaction:
B2B2C

Nonbusiness EC

B2B.

Collaborative Commerce

52-A corporation uses the Internal Revenue Service's Web site to learn how to pay its
estimated quarterly income taxes. This is an example of:
G2G

E2E.

G2C

G2B

53-The second-generation of Internet-based services that lets people collaborate and share
information online is known as Web 2.0. An example of this is:
mp3.com

DoubleClick

Evite

blogging

54-The digital enterprise shifts the focus from managing individual information resources
such as devices, applications, and data to ________ that define the business and ultimately
deliver value to customers and end users.
transforming revenue
models

developing
models

organizing supply
chains

orchestrating the services and


workflows

55-Many companies employ a(n) ________, which is a gateway for customers, employees,
and partners to reach corporate information and to communicate with the company.
corporate portal

intranet

social network

Chapter 2 E-Marketplaces

extranet

1-The functions and efficiency of an e-market are the same as that of a physical
marketplace.
True

False

2-The emergence of electronic marketplaces has resulted in lower information search costs
for buyers and lower transaction and distribution costs for sellers.
True

False

3-Although both marketplaces and marketspaces can sell physical products, the
marketspace also can sell digital products, which are goods that can be transformed to
digital format and delivered instantly over the Internet.
True

False

4-Front end refers to the activities that support online order fulfillment, inventory
management, purchasing from suppliers, payment processing, packaging, and delivery.
True

False

5-In marketing, an intermediary is a third party that operates between sellers and buyers.
Intermediaries of all kinds offer their services on the Web.
True

False

6-WebMD, which is the largest U.S. medical services company, is known mainly for its
webmd.com consumer portal, but its core business is being an e-intermediary.
True

False

7-The major B2B e-marketplaces are electronic storefronts, Internet malls, and exchanges.
True

False

8-A portal is an information gateway that attempts to address information overload by


enabling people to search and access relevant information from disparate IT systems and
the Internet, using advanced search and indexing techniques, such as Google's desktop.
True

False

9-Intermediaries are human or electronic agents that play an important role in EC by


providing value-added services such as making payment arrangements to buyers and
sellers.
True

False

10-Travelers using airline Web sites to book their flights directly without the use of travel
agents is resulting in the reintermediation of travel agents.
True

False

11-Search engines not only "search and match," but also have capabilities that can be used
to perform routine tasks that require intelligence.
True

False

12-An electronic shopping cart is an order-processing technology that allows customers to


accumulate items they wish to buy while they continue to shop.
True

False

13-Shopping carts for B2B are fairly simple, but a shopping cart for B2C may be more
complex.
True

False

14-An auction is a competitive process and market mechanism that uses a competitive
process by which a seller solicits consecutive bids from buyers or a buyer solicits bids from
sellers.
True

False

15-Negotiation and bargaining are two types of auctions where prices are not fixed, but
rather are allowed to fluctuate as market supply and demand change.
True

False

16-Reverse auctions are bidding or tendering systems in which the buyer places an item for
bid on a request for quote (RFQ) system; then potential suppliers bid on the job, with the
price reducing sequentially, and the lowest bid wins.
True

False

17-E-auctions are becoming less important selling and buying channels for companies and
individuals.
True

False

18-The major limitations of e-auctions are insufficient security, risk of fraud, and a limited
pool of participants.
True

False

19-A limitation of e-bartering for businesses is that excess capacity items such as office
space, storage, factory space; idle facilities; and labor cannot be bartered.
True

False

20-Online negotiation can be facilitated by computer technology for the negotiation process
and software agents for searches and comparisons.
True

False

21-Due to the lack of hurdles, the adoption and growth of m-commerce has been
widespread.
True

False

22-The Internet economy's low barriers to entry are both an opportunity and a threat to
businesses.
True

False

23-Strong competition for commodity-type products, such as toys and CDs, was a major
contributor to the collapse of many dot-com companies, which suggests that a company
needs to use innovative strategies to survive and prosper in the Internet economy.
True

False

24-Because the strength of each of Porter's five forces varies considerably from industry to
industry, it would be a mistake to draw general conclusions about the impact of the
Internet on long-term industry profitability.
True

False

25-Because of intense competition on the Web, new companies cannot establish good
corporate images quickly as Amazon.com had done when it had few online competitors.
True

False

26-Fundamentally, the success of the pure-play jewelry e-tailer Blue Nile was due to the
company's use of Internet technologies to:
offer lower prices than competitors eliminate intermediaries go public provide quality ratings

27-Traditional and electronic markets have three main functions, which include each of the
following EXCEPT:
providing an institutional
matching
transforming raw infrastructure, such as a legal and
buyers and materials into
regulatory framework that
sellers.
finished products. enables the efficient functioning
of the market.

facilitating the exchange of


information, goods,
services, and payments
associated with market
transactions.

28-Digital products have different cost curves than those of regular products because:

in digitization, most of
in digitization, all in digitization, most of in digitization, most of
the costs are fixed, and
of the costs are
the costs are variable
the costs are fixed, but
variable costs are very
variable.
and fixed costs are low. variable costs are high.
low.

29-The portion of an e-seller's business processes through which customers interact,


including the seller's portal, electronic catalogs, a shopping cart, a search engine, and a
payment gateway is referred to as the ________ of the business.
front end

infrastructure

intermediary

back end

30-All the activities that are related to order aggregation and fulfillment, inventory
management, purchasing from suppliers, accounting and finance, insurance, payment
processing, packaging, and delivery are done in what is termed the ________ of the
business.
front end

back end

intermediary

infrastructure

31-The major ________ e-marketplaces are storefronts and Internet malls.


B2C

B2B2C

B2B

C2B

32-An electronic storefront includes several mechanisms that are necessary for conducting
the sale. The most common mechanisms include each of the following EXCEPT:
a search engine

an electronic catalog;

a supply chain

a payment gateway

33-________ are online markets owned and operated by a single company and may be
either sell-side or buy-side.
Commercial portals

Private e-marketplaces

B2B marketplaces

E-malls

34-A(n) ________ is a single point of access through a Web browser to help users find
relevant and accurate business information and reduce information overload.
intermediary

browser

search engine

information portal

35-Finding relevant and accurate information is often time-consuming and requires access
to multiple systems causing organizations to lose a lot of productive employee time. One
solution to this problem is the use of:
intermediaries.

browsers.

portals.

intranets.

36-A type of broker that helps consumers compare different stores is a:


shopping facilitator.

metamediary.

search agent.

virtual mall.

37-Human or electronic intermediaries attempt to address each of the following limitations


of direct interaction EXCEPT:
lack of privacy for those wanting to remain
anonymous.

contract
risk.

search
costs.

product
distribution.

38-The elimination of various types of agents that mediate between buyers and sellers, such
as travel and insurance agents, is referred to as:
remediation

automation

e-distribution

disintermediation

39-A mode is purchasing where prices are negotiated or discounted is ________, which
refers to nonfixed prices, such as those in auctions or stock markets.
pre-shopping

dynamic pricing

commodity pricing

negotiation

40-Although used occasionally in B2C commerce, customized catalogs are especially useful
in B2B e-commerce for each of the following reasons EXCEPT:
e-catalogs can show
e-catalogs can show
the buyer's ID
only the items that the number for the item,
employees in a specific model, or SKU
organization are
number rather than
allowed to purchase. the seller's ID
numbers.

E-catalogs can be
customized to show the
Intranets, in
same item to different
particular, can
deliver customized customers at different
catalogs to different prices, reflecting discounts
business customers. or purchase-contract
agreements.

41-To be successful and useful, large e-catalogs need a(n) ________.

search engine

data mining technology

enhanced viewing capability

directory

42-A ________ has capabilities that can be used to perform routine tasks that require
intelligence such as providing customers with assistance based on their movements on a
Web site.
intelligent engine

search engine

software engine

software agent

43-Popular search engines include all of the following EXCEPT:


Google

Lycos

AltaVista

MSN

44-A(n) ________ is an order-processing technology that allows customers to accumulate


items they wish to buy while they continue to shop.
merchant server

e-fulfillment agent

intelligent agent

electronic shopping cart

45-The most common and traditional form of auctions in which one seller entertains bids
from many buyers is referred to as:
e-auctions.

forward auctions

double auction.

reverse auctions.

46-An auction in which there is one buyer and many potential sellers; or in which a buyer
places an item for bid on an RFQ system and the lowest bid wins is referred to as all of the
following EXCEPT:
tendering system.

forward auctions.

bidding system.

reverse auctions.

47-What is a benefit of e-auctions to sellers?


Anonymity.

Convenience since the bidding can High stickiness to


The optimal price is
the Web site.
determined by the market. occur anywhere and any time.

48-Organizations are embracing mobilized computing technologies for several reasons


EXCEPT:
The prices of notebook computers, Wireless security

It improves the

Wireless telecom

wireless handhelds, and smart


phones continue to fall and their
capabilities continue to increase.

problems have been productivity of


workers in the
solved with
field.
encryption.

support for
mobility is
growing quickly.

49-EC competition is very intense because online transactions enable each of the following
EXCEPT:
Higher prices
because of a
greater number
of potential
buyers.

Setting up a Web site is


relatively easy and
inexpensive, and doing so
reduces the need for a sales
force and brick-and-mortar
stores.

For buyer, e-markets


reduce the cost of
Product or service
searching for product
differentiation and
information; e.g., sellers,
personalization.
models, prices, frequently
to zero.

50-Which of the following statements about differentiation and personalization is not


correct?
Consumers like
differentiation and
personalization and are
frequently willing to pay
more for them.

Products must be
differentiated for
perfect
competition.

Price cutting in
differentiated markets
does not impact
market share very
much:

Differentiation reduces
the substitutability
between products,
benefiting sellers who use
this strategy.

51-It can be said that competition between companies is being replaced by competition
between ________.
digital products and services

networks industries differentiated products and services

52-The Internet has influenced industry structures in each of the following ways EXCEPT:
Increases differences
Industries are
among competitors whose
more efficient
offerings are kept
overall.
proprietary.

A flood of new entrants has


come into many industries
because of reduced barriers
to entry.

There has been a shift


in bargaining and
buyer power to end
users.

53-Impacts of e-marketplaces on B2C direct marketing include all of the following


EXCEPT:
The existence of e-

EC enables

Brand images

The administrative work

marketplaces has
increased the
promotion of products
and services through
direct marketing.

customization of
products and services,
which is changing
marketing and sales
activities both in B2C
and in B2B.

for new
companies have
become more
difficult to
establish.

related to physical delivery,


especially across
international borders, can be
reduced significantly, cutting
the cycle time by more than
90 percent.

54-One of the major benefits of e-markets is the improvement in supply chains with the
creation of a(n) ________.
logistics chain

customized chain

hub-based chain

support chain

55-________ provides customers with exactly what they want, when and where they want it.
Effective communication between the supply chain and the factory floor is needed to make
it happen
Build-to-order
manufacturing

Real-time
manufacturing

Demand-driven
manufacturing

Virtual
manufacturing

Chapter 3 Retailing in Electronic Commerce


1-The amount and percentage of goods and services sold on the Internet is increasing
rapidly, despite the failure of many dot-com companies.
True

False

2-A retailer is a sales intermediary, a seller that operates between manufacturers and
customers.
True

False

3-Consumer electronics, including cell phone sales, are the largest category of online retail.
True

False

4-Jewelry sales over the Internet is just beginning, but could be one of the top sellers on the
Internet in the near future.

True

False

5-Offline transactions are somewhat influenced by research conducted online, with


approximately one-third of online shoppers reporting that they used the Internet to
research and influence their offline shopping choices.
True

False

6-Evidence indicates that the basic principles that apply to retail success do not apply to etail success.
True

False

7-Offering quality merchandise at good prices, coupled with excellent service, and crosschannel coordination and integration in which customers can almost seamlessly operate
between the online and physical environments of a business are also important elements in
successful e-tailing.
True

False

8-Goods with the following characteristic guarantee provided by highly reliable or wellknown vendors are expected to facilitate higher sales volumes.
True

False

9-A business model is an analysis of the organization's customers and, from that, a
discussion of how that organization will achieve profitability and sustainability by
delivering goods and services to those customers.
True

False

10-Direct marketing describes marketing that takes place offline between manufacturers
and retailers.
True

False

11-Virtual or pure-play e-tailers are firms that sell directly to consumers over the Internet
without maintaining a physical sales channel.
True

False

12-Specialized businesses operate in a very narrow market and would find it difficult to
survive in the physical world because they would not have enough customers or could not
hold the variety of stock.
True

False

13-All click-and-mortar retailers started life as a traditional storefront with a physical


retail presence only and over time adopted an online transactional capability as well (brick
only to brick-and-click).
True

False

14-In today's digital economy, click-and-mortar retailers sell via stores, through voice
phone calls to human operators, over the Internet through interactive Web sites, and by
mobile devices.
True

False

15-Although there are practical advantages to being an e-tailer, such as lower overhead
costs, it has many drawbacks and barriers so the winners in many market segments will be
companies that use the click-and-mortar approach.
True

False

16-Online travel services have high margins because of their multiple revenue models
including commissions, revenue from advertising, lead-generation payments, consultancy
fees, subscription or membership fees, and revenue-sharing fees.
True

False

17-The job market is characterized by high volatility and unbalanced supply and demand.
True

False

18-In general, online real estate is replacing existing real estate agents in most markets.
True

False

19-Many insurers are using a dual distribution strategy, by adding online distribution of
standard products to their traditional agency distribution system.
True

False

20-From a bank's perspective, online banking offers a cheap alternative to branch banking
as well as a chance to enlist customers in remote areas.
True

False

21-Egghead.com realized a substantial reduction in operating costs and inventory costs by


eliminating its brick-and-mortar stores and becoming a pure-play in e-commerce.
True

False

22-In implementing a successful click-and-mortar strategy, a company must make sure


that whether a customer establishes contact through face-to-face encounters with store
personnel or through the Web page, the information and service received is consistent.
True

False

23-Investors in e-tailers which report small losses on each unit sold should not be
concerned because the huge volume of business available online should more than offset
these small marginal losses.
True

False

24-Cybermediation occurs at Web sites that use intelligent agents to facilitate


intermediation.
True

False

25-Channel conflict occurs when adding an online distribution channel causes problems
with existing distribution channels.
False

True

26-Amazon.com experienced all of the following EXCEPT:

Amazon.com have
trended upward, driven
largely by product
diversification and its
international presence.

Amazon.com
maintained its
position as the
number one etailer in 2006.

Despite increasing a sales and net


profits, in percentage terms, Amazon
has seen a drop in profitability in
2006, attributed to huge spending on
further developing its technology
infrastructure and its investment in
the Amazon Prime discount shipping
program.

The
company's
financial
success has
been assured.

27-According to data from eMarketer, approximately ________ shop online and/or


research offline-sales online.
three in four Internet
users age 25 and over

two in five Internet


three in four Internet
users age 18 and over. users age 14 and over

two in five Internet


users age 30 and over

28-All of the following categories have already been selling well online EXCEPT:
pet supplies

computer hardware and software

travel

new cars

29-Important trends in B2C EC include all of the following EXCEPT:


many offline transactions
online advertising
are now heavily
will increasingly
influenced by research
use rich media.
conducted online.

the use of cell


the Internet will influence
phones to shop
approximately 25 percent
online is increasing
of all retail sales by 2010.
rapidly.

30-With all else being equal in the online environment, goods with any of the following
product characteristics are expected to facilitate greater online sales EXCEPT:
Relatively expensive
items.

Frequently purchased
items.

Digitized
format.

High brand
recognition.

31-Marketing that takes place without the help of intermediaries is called:


pure-play e-tailing

direct marketing.

e-malls.

disintermediation

32-Dell's strategy is best described as:


a click-and-mortar
strategy.

direct marketing from a


manufacturer.

a brick-and-mortar
strategy.

a shared service mall


strategy.

33-Sears marketing strategy would best be described as:


a shared service mall direct marketing from a
strategy.
manufacturer.

a brick-and-mortar
strategy.

a click-and-mortar
strategy.

34-In direct marketing:


sales are
customers are contacted directly shipments are made
directly from the seller to made in
without the help of
the customer.
malls only.
intermediaries.

electronic
distributors must
be used.

35-An online seller of travel services that generates revenue by charging fees for its services
is an example of a(n):
market maker.

transaction broker.

viral marketer.

content disseminator.

36-A marketer that uses e-mail to advertise to potential customers is called a:


viral marketer.

transaction broker.

content disseminator.

market maker.

37-A company that creates and manages many-to-many markets is called a:


transaction broker.

content disseminator.

market maker.

viral marketer.

38-In an e-market, Federal Express is an example of a(n):


viral marketer.

content disseminator.

service provider.

intermediary.

39-All of the following are potential sources of revenue for online independent travel agents
EXCEPT:
direct marketing revenues.

advertising fees.

transaction fees.

subscription fees.

40-Which of the following is true of virtual banks?


Stringent regulations
have eliminated fraud
risk in virtual banks.

Virtual banks have


Virtual banks combine
proven very successful online and traditional
and profitable.
branch banking services.

Virtual banks
have no physical
location.

41-________ are customers who are willing to shop online because they dislike going to
grocery stores.
Time-starved customers

New technologists

Leading edgers

Shopping avoiders

42-________ are extremely busy customers willing to shop online in order to free up time.
Time-starved customers

Leading edgers

New technologists

Shopping avoiders

43-________ are those who are young and comfortable with technology.
Shopping avoiders

Leading edgers

New technologists

Time-starved customers

44-All of the following are examples of interactive entertainment EXCEPT:


adult sites purchasing theatre tickets online.

Internet gaming.

fantasy sports games.

45-________ are gateways to storefronts and e-malls.


Shopping portals

Shopping browsers

Intelligent search engines

Shopbots

46-Software tools that scout the Web for stores that sell similar items at low prices are
called:
Shopbots.

Intelligent search engines.

Shopping portals.

Shopping browsers.

47-________ are sites that evaluate and verify the trustworthiness of e-tailers
Shopping portals

Business rating sites.

Trust verification sites

Shopbot sites

48-The TRUSTe seal is an example of:


a business rating.

a B2B exchange.

an intermediary.

a trustmark.

49-Charles wants to buy a John Lennon lithograph over the Internet, but he is unwilling to
pay for it until he inspects it to ascertain authenticity. The auction site through which he
purchases the painting agrees to hold his money until he tells them to release it to the seller.
This is an example of:
an escrow service.

a warranty.

a trustmark.

a verification.

50-A software agent that surveys user's reading interests, then uses machine learning to
find new Web pages and news articles using neural-network-based collaborative filtering
technology is called:
an aggregator portal.

a real-time agent.

a learning agent.

the sponsorship model.

51-A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar
strategy to do all of the following EXCEPT:
speak with one leverage each channel's advantages
voice.
for all customers.

empower
customers.

reduce refunds and


exchanges.

52-The original click-and-mortar strategy used by Toys R Us failed, as did the original toy
venture of Amazon.com. Afterwards, Toys R Us sold toys online through Amazon.com.
This is an example of:
disintermediation.

an alliance of a pure-player with a


traditional retailer.

reintermediation.

channel
conflict.

53-DeFreshFish has been in business for ten years selling custom fishing lures to local
fishermen through its store in a shopping mall. The company's owners are considering
opening a Web site and selling their products internationally. One new risk they will face in
going from a brick-and-mortar strategy to a click-and-mortar strategy is:

the risk associated with


the risk that
trying to comply with
costs will
conflicting rules and
erode their
regulations in many different
profit margin.
locales.

the risk that their


products will not
meet the needs of
their target market.

the risks associated with


shifting their cost structure
from mostly fixed costs to
mostly variable costs.

54-The single factor that will determine which intermediaries continue to exist and which
are replaced is:
the length of the
relationship between the
intermediary and its
customers

the ability of the


intermediary to match
up buyers and sellers

the profitability
of the
intermediary

the addition of valueadded services by the


intermediary

55-An e-tailer uses cookies to identify returning customers and to provide suggested
products for purchase based on prior shopping behavior. This is an example of:
advertising supported model.

channel cooperation.

personalization. on-demand delivery.

Chapter 4 Consumer Behavior


1-Netflix implemented intelligent agents in its movie recommendation service called
Cinematch to help customers select movies they would like to watch and to better manage
its inventory.
True

False

2-Finding and retaining customers is a major critical success factor for most offline and
online businesses.
True

False

3-One of the keys to building effective customer relationships is an understanding of


intelligent agents.
True

False

4-The purpose of a consumer behavior model is to help firms understand how a consumer
makes a purchasing decision to be able to influence that decision through advertising,
special promotions, or other marketing method.
True

False

5-Individual buyers do most of the actual shopping in cyberspace in terms of dollar volume
of sales.
True

False

6-Purchases by governments, private corporations, resellers, and other organizational


buyers often are used to create other products or services by adding value to them.
True

False

7-Personal characteristics of customers, such as age and income, are independent variables,
which are uncontrollable variables for EC companies.
True

False

8-Customers rarely browse online stores if they do not intend to buy.


True

False

9-According to Internet statistics, 67 percent of consumers abandoned their shopping carts


because of the lack of satisfactory product information.
True

False

10-The two most cited reasons for abandoning a shopping cart and not making the
purchase are shipping charges and security concerns.
True

False

11-Social factors such as customer endorsement strategies and word-of-mouth are


independent variables that play an important role in EC shopping and purchases.

True

False

12-Prices, advertising, promotions, and logistics are intervening variables that can be
controlled by vendors.
True

False

13-Buying decisions are the dependent variables because these decisions depend on the
independent and intervening variables.
True

False

14-An objective of conducting market research is to understand the relationships between


dependent and intervening variables so that vendors can make informed decisions on the
intervening variables.
True

False

15-In the consumer decision-making process, the buyer is the person who ultimately makes
the buying decision.
True

False

16-When Chaplin's auto lease is about to expire, he decides it is time to buy a new car. This
imbalance between a desired state and an actual state is called need identification.
True

False

17-In the decision-making process, virtual catalogs and links to external sources support
the evaluation and selection phase of that process.
True

False

18-Mass marketing is an approach to marketing that treats each customer in a unique way
such as fitting advertising to the customer's profile and needs.
True

False

19-Selling as many products as possible to one customer over a long period of time and
across different product lines to maximize customer value is known as relationship
marketing.
True

False

20-Segmentation refers to the matching of services, products, and advertising content to


individuals and their preferences.
True

False

21-A user profile defines customer preferences, behaviors, and demographic traits of a
particular customer.
True

False

22-A cookie is a data file that is placed on a user's hard drive by a remote Web server only
when the user's gives full consent to collect information about the user's activities at a site.
True

False

23-Attracting and retaining loyal customers is the most important issue for e-tailers
because customer loyalty can lower marketing and advertising costs, transaction costs,
customer turnover expenses, and failure costs such as warranty claims.
True

False

24-Building consumer trust in EC can be achieved through integrity, which is a user's


confidence in the ability of the online store to fulfill its promises such as a money-back
guarantee.
True

False

25-Clickstream data provide a trail of a user's activities in a Web site including a record of
the user's browsing patterns of every page of every Web site the user visits, how long the

user remained on a page, and even the e-mail addresses of mail that the user sends and
receives.
False

True

26-According to the EC consumer behavior model, personal characteristics and


environmental characteristics are classified as:
intervening variables

dependent variables

decision variables

independent variables

27-The major environmental variables influencing EC purchasing are:


age, gender,
price, social,
ethnicity, education, cultural, ethnicity,
and lifestyle.
and lifestyle.

price, brand, frequency


of purchase, and
tangibility.

social, cultural,
community, regulatory,
political, and legal.

28-Pricing, technical support, and logistics support are several of the ________ that can be
controlled by EC vendors and sellers
independent variables

decision variables

dependent variables

intervening variables

29-Because online buyer's decisions depend on numerous independent and intervening


variables, decisions made by customers are classified as:
intervening variables

independent variables

dependent variables

decision variables

30-Banner advertising on Web sites helps trigger a realization that there is a gap between
reality and a desired state, which occurs in the ________ stage of the EC purchase decisionmaking process.
information
search

evaluation, negotiation, and


selection

need
identification

purchase, payment, and


deli

31-Marketing and advertising approaches has evolved from mass marketing to market
segmentation to one-to-one marketing. This evolution occurred because:
the marketing
concerns about
focus shifted from privacy had

companies sought to
decrease the number

the Internet enabled companies to


better communicate with

customers to
products.

diminished.

of marketing
campaigns.

customers and understand their


needs and buying habits.

32-The core of the "new marketing model" consists of:


customer
relationships.

online marketing
channels.

four P'sproduct, place, price, and customer


promotion.
profiles.

33-Personalization and user profiling strategies include each of the following EXCEPT:
Segmenting the
market based on
demographics.

Building from
Using questionnaires to
previous
collect information
purchases or
directly from the user.
purchase patterns.

Placing cookies on a user's


hard drive to collect
information with or without
the user's knowledge.

34-The two key factors limiting the use of personalization to more precisely target
marketing efforts to individual customers are:
lack of customer loyalty
and service customization
costs.

communication costs
and filtering costs.

matching profiles with


privacy and
product offerings and
trust issues.
delivering those offerings.

35-By increasing customer loyalty, EC companies can achieve each of the following benefits
EXCEPT:
lower warranty
claims costs.

lower resistance to
competitors.

lower transaction lower marketing and


costs.
advertising costs.

36-What has been the impact of the introduction of EC on customer loyalty in general?
There has been little
Loyalty has decreased
change in loyalty
because of customers'
because the impacts
ability to shop, compare,
have cancelled each
and shift vendors.
other out.

It is not known
whether loyalty has
increased or
decreased.

Loyalty has increased


because of targeted
relationship
marketing.

37-According to research, customer satisfaction with an Internet store:

depend on two types of


is higher for new
factors: information
customers than
quality and customer
former customers.
service quality.

drops dramatically when certain


Web site features fail to perform
properly, such as the content's
reliability, loading speed, or
usefulness.

cannot be
predicted.

38-Issues related to trust in EC include all of the following EXCEPT:


When parties trust
As a result of trustTrust is particularly If people do not trust transference programs
each other, they have
important in global the security of the EC through portal affiliation,
confidence that
EC transactions due infrastructure, they
seal of approval programs, transaction partners
to the difficulty of will not feel
will keep their
online shopping
taking legal action comfortable about
communities, and customer promises. However,
in cases of a dispute using credit cards to endorsements, customers are both parties in the
or fraud.
make EC purchases. fully confident in online
transaction assume
some risk.
purchasing transactions.

39-Procter & Gamble (P&G) used the Internet in the new product development of
Whitestrips, a teeth-brightening product. Based on this experience, P&G:
could not
determine the
target market
segments for the
Whitestrips.

reduced the time-tomarket from concept to


market launch by
approximately two
years.

decided to add
Internet research
to its traditional
marketing test
model.

learned that the cost of online


surveys were about the same as
similarly sized telephone
surveys, but online surveys
expedited research
considerably,

40-All of the following are correct about market research methods EXCEPT:
It is important first to
understand how
groups of consumers
are classified or
segmented.

Markets can be segmented to


increase the percentage of
responses and to formulate
effective marketing strategies
that appeal to specific
consumer groups.

Market segmentation is
done with the aid of
tools such as data
modeling and data
warehousing.

Direct mail
marketing
methods are
usually costeffective.

41-Social class, lifestyle, personality, and activities are descriptors used in ________ market
segmentation.
geographic

demographic

cognitive, affective, behavioral

psychographic

42-To avoid getting false information from participants of online surveys, marketers learn
about customers by observing their behavior using each of the following EXCEPT:
Spyware that gathers user
Transaction logs that
Data mining to
information through an Internet
record user activities at
analyze
connection without the user's
a company's Web site.
clickstream data.
knowledge.

Cookies that allow


a Web site to store
data on the user's
PC.

43-According to Inmon, B2C clickstream data can reveal information each of the following
EXCEPT:
Which ads and
promotions were
effective and which
were not.

Whether there are too


What goods the
many products for the
customer wanted to
customer to wade
but could not find.
through.

What goods the


customer examined
but did not purchase.

44-Web analytics and mining tools and services:


simply report
which pages
were clicked and
how long a
visitor stayed
there.

provide most
companies with
knowledge about how
to use clickstream data
effectively.

offer advanced functions that help


marketers decide which products to
promote, and merchandisers
achieve a better understanding of
the nature of demand.

are used to
redesign Web
sites quickly
and on the fly.

45-Once a company knows a consumer's preferences, the company can predict, without
asking the consumer directly, what other products or services that consumer might enjoy
through ________.
active web bugs

collaborative filtering

spyware

personalization

46-Limitations of online research methods are all of the following EXCEPT:


E-mail surveys have The ethics and
the lowest response legality of Web
tracking.
rate.

Loss of respondents
because of equipment
problems.

Focus group responses


lose eye contact and body
language.

47-Online methods of bringing new customers to a B2B site when a B2B vendor wants to
grow by adding new customers or products include all of the following EXCEPT:
by contacting all of its targeted
customers individually to attract
them to an electronic exchange.

through an
affiliation
service.

through Web advertising


through direct
such as using an ad server
mail campaigns
network provider.

48-The Internet introduced the concept of ________, which has enabled marketers and
advertisers to interact or communicate directly with customers and consumers can interact
with marketers/advertisers.
one-to-one marketing

direct marketing

advertising channel

interactive marketing

49-The term ________ refers to the number of times users call up a page that has a banner
on it during a specific period.
click through

unique visit

ad view

conversion rate

50-The major disadvantage of banners is ________.


the limited amount of time the limited amount of
viewers have become
their
the banner is present to the information can be placed on immune to banners and
cost
visitor
the banner
seldom notice them

51-A(n) ________ is a type of pop-up ad that appears after a user clicks a link and remains
while content is loading to capture the user's attention for a short time, either as a
promotion or a lead-in to the site's homepage or to advertise a product or a service.
keyword banner

interstitial

banner exchange

CPM

52-The risks of e-mail advertising management include all of the following EXCEPT:
spam

fraud

e-mail hoaxes

measuring e-mail advertising effectiveness

53-A(n) ________ is an HTML coding statement that describes the content of a Web page
and is used by search engines to index the site's content so that it can be found.
meta-tag

domainer

advertorial

associated ad display

54-Advertising in chat rooms, blogs, or social networks can achieve each of the following
EXCEPT:
They improve a
company's search
engine ranking.

Advertising can
Advertising can be
become more thematic
easily targeted to
than on static Web
customer interests.
sites.

They can be used as one-toone connections between a


company and its customers.

55-________ is an advertising strategy that uses word-of-mouth marketing in which


customers promote a product or service by telling others about it.
Affiliate marketing

Viral marketing

Ad customizing

Ads as a commodity

Chapter 5 B2B E-Commerce


1-General Motors' B2B initiatives successfully enable the auto giant to reduce inventory
cost, minimize operational problems, and shorten procurement processes.
True

False

2-Business-to-business e-commerce is also known B2B and refers to transactions between


businesses conducted electronically over the Internet, extranets, intranets, or private
networks.
True

False

3-The major characteristic of B2B commerce is that companies attempt to electronically


automate trading, communication, and collaboration processes in order to improve them,
which cannot be done without the Internet.
True

False

4-Supply chain improvements and collaborative commerce are a basic type of B2B which has
a hub manager for supply chain improvements, communicating, collaborating, and
information sharing.

True

False

5-B2B EC transactions that involve one seller selling to many buyers is called an exchange.
True

False

6-Since business-to-consumer (B2C) transactions are segments in the supply chain, they
should be examined in light of other supply chain activities such as manufacturing,
procurement, shipments, and logistics.
True

False

7-Supply chain activities usually involve communication and collaboration.


True

False

8-With B2B2C, a business sells to a business, but also delivers small quantities to customers
of the buying business.
True

False

9-Intermediaries in B2B commerce, which may be virtual or click-and-mortar


intermediaries, are third parties that broker transactions between buyers and sellers.
True

False

10-The purchase of goods and services as they are needed, usually the purchase of
commodities at prevailing market prices, is referred to as demand buying.
True

False

11-Examples of direct materials for a food processing company are computers and
communication devices.
True

False

12-MRO stands for "maintenance, repair, and operation" which refer to indirect or
nonproduction materials that support the production process.
True

False

13-Markets that focus on providing materials or products that are used in various types of
industries are known as horizontal marketplaces.
True

False

14-Purchases of goods or services that are based on short-term contracts and frequently
purchased in large quantities are known as strategic sourcing.
True

False

15-Joining a public e-marketplace provides a business with greater buying and selling
capabilities, but the tradeoff is lower supply chain power.
True

False

16-B2B can increase the efficiency and effectiveness of supply chains or dramatically
change the supply chain by eliminating one or more intermediaries.
True

False

17-Companies that choose an intermediary to do their buying and selling will have high
supply chain power and buying/selling capabilities.
True

False

18-Transaction fees for B2B financial services are higher than for most other methods.
True

False

19-Companies will often separate B2C orders from B2B orders because those types of
orders have different order-fulfillment processes and different pricing models.

True

False

20-By using the Internet and automatic-response software agents for customer service,
companies have been able to reduce their customer service costs by up to fifty percent.
True

False

21-Forward auctions expand online sales and offer businesses a new venue for quickly and
easily disposing of excess, obsolete, and returned products.
True

False

22-Strategic sourcing requires a holistic process that automates the entire sourcing process,
including order planning, RFQ creation, bid evaluation, negotiation, settlement, and order
execution.
True

False

23-A large organizations can develop an effective procurement system by creating an


internal marketplace that combines the catalogs of all its approved suppliers into a single
internal electronic catalog, which is searched for product availability and delivery times.
True

False

24-With a bartering exchange, a company submits its surplus to the exchange and receives
points of credit, which the company can then use to buy items that it needs.
True

False

25-In the real world, negotiations are done primarily electronically and with negotiation
support tools.
True

False

26-Key business drivers for B2B are all of the following EXCEPT:
the availability of a numerous private and the need for

the willingness of

secure broadband
Internet platform.

public B2B emarketplaces.

collaborations between companies to incur higher


suppliers and buyers. costs to improve
collaboration.

27-B2B transactions that involve communication, design, planning, information sharing,


and activites beyond financial transactions among business partners is referred to as
________.
public marketplaces

trading communities

exchanges

collaborative commerce

28-With ________, a business sells to a business but delivers small quantities to customers
of the buying business.
B2B2C

B2B

B2C

B2C2B

29-A(n) ________ is an online third party that brokers B2B transactions between a buyer
and seller.
vertical marketplace

horizontal marketplace

intermediary

strategic source

30-The purchase of goods and services as they are needed, usually at prevailing market
prices is referred to as:
direct materials

spot buying

consolidation

strategic sourcing

31-Purchases of goods and services based on long-term contracts is referred to as:


direct materials

spot buying

consolidation

strategic sourcing

32-________ can be supported more effectively and efficiently through direct buyerseller
offline or online negotiations, which can be done in private exchanges or private trading
rooms in public exchanges.
Strategic purchases

B2C commerce

MRO

Spot buying

33-What are the two types of materials and supplies that are traded in B2B?

Direct and
indirect.

Horizontal and
vertical.

Digital and
physical.

Commodities and
nonproduction.

34-Nonproduction materials such as equipment and tools that support production are
called:
operational materials

direct materials

virtual materials

indirect materials

35-Indirect materials are typically used in ________ activities.


intermediary maintenance, repair, and operation (MRO)

sales and marketing supply chain

36-The ________ consists of a number of interrelated subprocesses that extend from the
acquisition of materials from suppliers to packaging it and moving it to distributors and
retailers.
vertical market

horizontal market

production chain

supply chain

37-Companies that use an intermediary to do their buying and selling tend to be:
low on supply chain
power and low on
buying/selling
capabilities

high on supply chain


power and high on
buying/selling
capabilities

low on supply chain


power and high on
buying/selling
capabilities

high on supply chain


power and low on
buying/selling
capabilities

38-The major B2B services include each of the following EXCEPT:


Financial

Travel and hospitality

Stock trading

Retail

39-Which of the following is not one of the major benefits of B2B?


Expedites
Increases production
processing and
flexibility, permitting
reduces cycle time. just-in-time delivery.

Increases
opportunities for
collaboration.

Enables customized online


catalogs with the same
prices for different
customers.

40-________ occurs when B2B eliminates a distributor or a retailer.

Collaboration

Disintermediation

Just-in-time delivery

Purging

41-In a sell-side e-marketplace, a business sells products and services to business customers,
frequently over ________.
an exchange

an intranet

a web service

an extranet.

42-Companies will usually separate B2C orders from B2B orders because B2C and B2B
orders have different ________.
marketing
processes

accounting
processes

order-fulfillment processes and


different pricing models

buying and delivery


processes

43-By using the Internet and automatic-response software agents, GE reduced the cost of
customer service calls from $5.00 per call when done by phone to ________ per
electronically answered call.
$1.00

$0.50

$2.50

$0.20

44-Some of the benefits of a(n) ________ 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.
electronic data
interchange

custom
catalog

extranet-based order-entry intranet-based order-entry


tool
tool

45-In selling directly, manufacturers may encounter a similar problem to that of B2C,
namely ________ with the regular distributors, including corporate dealers.
multichannel distribution

direct sales conflict

channel conflict

indirect competition

46-One of the major problems facing direct sellers is ________.


how to manage the supply how to find
chain
buyers

how to find
suppliers

how to advertise in traditional


channels

47-The Cisco Connection Online (CCO) Web site receives over 2 million hits per month for
technical assistance, ordering, order checking, or software downloads. This online service
had been so well received that nearly ________ percent of all customer service inquiries
and ________ percent of software updates are delivered online.
15 / 25

45 / 55

25 / 35

85 / 95

48-Companies use ________ to sell their unneeded assets for quick disposal or to easily
dispose of excess, obsolete, and returned products.
private auctions

reverse auctions

forward auctions

liquidation

49-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:
No redeployment of
corporate resources.

No additional resources are needed such as No


hardware, bandwidth, engineering resources, hiring
or IT personnel.
costs.

Time-to-market
of several
weeks.

50-A company-based acquisition site that uses e-procurement methods such as reverse
auctions, negotiations, or group purchasing, to overcome the manual searching of e-stores
and e-malls is referred to as a(n):
aggregated catalog

buy-side e-marketplace

intermediary desktop procurement method

51-Benefits of e-procurement over traditional procurement methods include all of the


following EXCEPT:
Streamlining
invoice
reconciliation and
dispute resolution.

Lowering purchase prices


through product standardization,
reverse auctions, volume
discounts, and consolidation of
purchases.

Increasing the
productivity of
purchasing
agents.

Increasing the skill


requirements and
training needs of
purchasing agents.

52-Major implementation challenges that companies must consider when planning eprocurement initiatives include all of the following EXCEPT:
Increasing the number of Providing interfaces between Reviewing and
e-procurement and integrated changing the
regular suppliers and

Coordinating the
buyer's information

integrating with their


information systems and
possibly with their
business processes.

enterprisewide information
systems, such as ERP or
supply chain management.

procurement
process itself.

system with that of


the sellers.

53-Because conducting reverse auctions in B2B can be a fairly complex process, a(n)
________ may be essential.
open RFQ

online directory

software agent

third-party intermediary

54-The aggregation of suppliers' catalogs on the buyer's server to make it easier to


centralize and control all procurement is called a(n):
bartering
exchange

sell-side emarketplace

buy-side emarketplace

internal procurement
marketplace

55-In general, the benefits of contract-management software include all of the following
EXCEPT:
Reduces contract
Reduces
contract-related negotiation time and
efforts.
risks.

Provides more
efficient approval
processes.

Enables standardization of
contracts throughout the
enterprise.

Chapter 6 Public B2B Exchanges


1-Public exchanges are many-to-many marketplaces that are open to all interested sellers
and buyers and usually run by third parties.
True

False

2-One major characteristic of all exchanges is that they are electronic trading-community
meeting places for a single seller and many buyers, and possibly for other business partners.
True

False

3-In electronic exchanges and traditional open-air marketplace, buyers and sellers can
interact and negotiate prices and quantities.

True

False

4-Dynamic pricing refers to the rapid movement of prices over time and possibly across
customers as a result of supply and demand matching, as in auctions.
True

False

5-MSN or Yahoo! are types of exchanges that generate revenue through membership fees.
True

False

6-Thomas Register is basically a directory for buyers using search engines because it does
not offer any opportunity for trade or transactions on its site.
True

False

7-Alibaba China is China's largest online marketplace for both domestic and international
trade among businesspeople and a trusted community of members who regularly meet,
chat, search for products, and do business online.
True

False

8-To increase their financial viability, third-party exchanges try to partner with large
sellers or buyers, financial institutions that provide payment schemes, or logistics
companies to cut costs or increase market liquidity.
True

False

9-Market liquidity refers to the degree to which a product or service can be bought or sold
in a marketplace without significantly affecting its price.
True

False

10-Agentrics is the world's largest B2C exchange for retailers, such as Sears and Best Buy,
whose objective is to simplify and automate supply chain processes.
True

False

11-Two major models of third-party exchanges are supplier aggregation and buyer
aggregation.
True

False

12-For all types of e-marketplaces, the most important key to the success of any third-party
exchange is the critical mass of buyers and sellers.
True

False

13-A consortium trading exchange (CTE) or consortia is most appropriate for fragmented
markets with large numbers of both buyers and sellers.
True

False

14-The Global Transportation Network (GTN) provides participating carriers and


customers with significant cost savings because it frees individual carriers from the huge
capital costs of advanced technologies.
True

False

15-Purchasing-oriented (procurement) consortia have not yet been a successful or popular


B2B consortium model.
True

False

16-Because of their large number of buyers and sellers, B2B exchanges and other emarketplaces do not face anti-trust or other competition laws.
True

False

17-A B2B consortium has the potential to reduce prices of individual products, thus
enabling and encouraging consortium members to buy more.
True

False

18-Dynamic trading is trading that occurs in situations in which prices are determined by
supply and demand, therefore changing continuously.
True

False

19-The strategy of providing comprehensive, quality e-service for business partners is


called customer relationship management (CRM).
True

False

20-Because of the complexity in building large e-marketplaces and exchanges, it is usually


performed by a major B2B software company, such as Ariba or IBM, and a management
consulting company, such as PricewaterhouseCoopers, usually participates.
True

False

21-Company-centered networks may be a waste of money because they are used by only
one buyer (buyer's industrial network) or by only one seller (seller's industrial network),
and they may not be open to all.
True

False

22-Most exchanges have the same log-on procedures, same sets of rules for fulfilling
orders,and similar business models for charging for their services.
True

False

23-Public exchanges have difficulty attracting buyers and sellers because of the transaction
fees, reluctance to share information, and the availability of too many exchanges.
True

False

24-In B2B exchanges, software agents can facilitate management of multiple trading
partners and their transactions across multiple virtual industry exchanges.
True

False

25-Good management and effective operations and rules are critical to the success of B2B
exchanges because good governance provides the rules for the exchange, minimizes
conflicts, supports decision making, and tries to induce the necessary liquidity.
False

True

26-Before the Internet, the trading process for raw and partially processed chemicals,
plastics, and fuel oil was each of the following EXCEPT:
fragmented

disintermediated

slow

expensive

27-ChemConnect is an example of a successful e-exchange with:


many buyers and one few buyers and few
seller.
sellers.

many buyers and few


sellers.

many buyers and many


sellers.

28-A third party that operates an exchange and in many cases, also owns the exchange is
known as a(n):
intermediary

negotiator

agent

market maker

29-In the context of EC, ________ are electronic trading-community meeting places for
many sellers and many buyers, and possibly for other business partners.
B2C

portals

social networks

exchanges

30-From 2001 to 2006, a majority of e-exchanges:


increased in size due to
mergers of small eexchanges.

devised new methods to folded due to a lack of expanded by


increase revenues and customers, cash, or
adding business
profits.
partners.
both.

31-An exchange whose members are in one industry or industry segment and that trades
only in materials/services unique for that industry is referred to as a(n):
lateral exchange

horizontal exchange

vertical exchange

commodity exchange

32-An exchange that handles materials used by companies in different industries is


referred to as a(n):.
lateral exchange

vertical exchange

horizontal exchange

commodity exchange

33-Light bulbs and office supplies might be purchased in a(n) ________ by both an
automaker and a steelmaker.
commodity exchange

vertical exchange

lateral exchange

horizontal exchange

34-In ________, the prices are usually dynamic and are based on changes in supply and
demand.
vertical sourcing

spot sourcing

horizontal sourcing

strategic sourcing

35-In ________, the prices are usually negotiated or fixed.


spot sourcing

horizontal sourcing

strategic sourcing

vertical sourcing

36-Spot sourcing of direct materials takes place:


in vertical
exchanges.

in horizontal
exchanges.

only in virtual
exchanges.

on exchanges which operate without


a market maker.

37-In spot-sourcing, prices are:


dynamic and set based on
supply and demand.

based solely on the cost


structure of the seller.

fixed and set by set by the


contract
market maker

38-In an exchange where plastic components are bought and sold, the market maker
collects money from the buyer, and releases it to the seller once successful delivery is
completed. This is an example of:
maintaining exchange
policies.

maintaining exchange
infrastructure.

matching buyers and transaction


sellers.
facilitation.

39-In an exchange where plastic components are bought and sold, the market maker
purchases a new server that will be used to conduct auctions. This is an example of:
transaction
facilitation.

matching buyers and maintaining exchange


sellers.
infrastructure.

maintaining exchange
policies.

40-A market maker evaluates an exchange between a buyer in the United States and a
seller in Spain to ensure that import laws for the U.S. are followed. This is an example of
the market maker:
matching buyers
and sellers.

transaction
facilitation.

maintaining exchange policies


and infrastructure.

interfering with
exchange policies.

41-In the consortia model:


a dominant player in the
industry establishes the
exchange and invites
others to join.

several industry players


come together to
establish the exchange
for the benefit of all.

a neutral third party


establishes and
manages the
exchange.

the public is invited


to join the exchange
as a way to offset
expenses

42-The exchange model in which a third party sets up the exchange and promises to run it
efficiently and without bias is called the:
industry giant model.

co-op model.

neutral entrepreneur model.

consortia model.

43-An exchange charges an annual fee of $25,000 for all parties who want to trade in the
exchange. The revenue model in use by this exchange is the:
transaction fee model. membership fee model. advertising fee model. fee for service model.

44-A market maker charges a percentage on every buy and sell made in the exchange. The
revenue model in place in this exchange is the:
advertising fee model. fee for service model. transaction fee model. membership fee model.

45-A market maker bills a buyer for reviewing several seller contracts and making a
recommendation on what to buy and from whom. The revenue model being used in this
example is the:

membership fee model. advertising fee model. fee for service model. transaction fee model.

46-All of the following are potential sources of revenue for an exchange EXCEPT:
advertising fees. membership fees. fees for services rendered. shipping and handling fees.

47-When membership fees are the basis for revenue generation in an e-exchange, it has
been shown that:
low membership fees often
result in losses to the
exchange,; however, high
fees discourage
participation.

when fees are very low,


the exchange sees
greater utilization which
leads to greater revenue
and profit.

there should be a fee


the higher the
for every service
fees charged,
provided; there should
the greater the
be no free services for
total profit.
members.

48-The concept of liquidity for a B2B exchange is the:


ease with which orders can be number of buyers ease with which
amount of
placed, processed, and shipped and sellers in a
information flows between available cash
using the exchange.
exchange members.
on hand.
market.

49-The exchange model in which RFQs are aggregated then linked to a pool of suppliers
who are notified automatically of the RFQ is the ________ model.
reverse auction

buyer aggregation

supplier aggregation

seller aggregation

50-Markets in which several large sellers sell to a large number of buyers are called:
differentiated
markets.

seller-concentrated
markets.

fragmented
markets.

buyer-concentrated
markets.

51-Attracting large business sellers to public exchanges is often difficult for all of the
following reasons EXCEPT:
competitors who are also
advertising costs in it is sometimes
exchange member may
public exchanges difficult to recruit
gain access to confidential
are very expensive. large suppliers.
information.

they are required to pay


transaction fees even when
they engage in transactions
with existing customers.

52-In dealing with exchange members, the management of the exchange should:
leave the management of
day-to-day operations of
the exchange to the
members.

strive to maximize
exchange revenues
through charging the
highest possible fees.

take special care of


the companies that
share ownership in
the exchange.

make certain that the


exchange is neutral in
its dealings with all
members.

53-The most attractive industries for a vertical exchange are characterized by:
a few very large
stagnant
players that totally
technology.
dominate the industry.

a market in which a small number of


many fragmented very large orders account for more
buyers and sellers. than half the total market volume per
year.

54-Brand building is important in B2B exchanges because:


information flow is poor in
most exchanges, making
trust of suppliers very
important.

it is easy for
exchange members
to change to another
exchange.

exchange members
typically buy only
the best brands of
product.

exchange members
typically buy products
at the lowest cost
unless branded.

55-Using tunneling technology to improve security of communication over the Internet is


called:
local area network
(LAN)

Internet protocol electronic data interchange virtual private network


(IP)
(EDI).
(VPN).

Chapter 7 E-Supply Chains


1-Although a company's success is clearly dependent on finding and retaining customers,
its success may be far more dependent on what is behind the Web page than on what is on
the Web page.
True

False

2-It has been well known for generations that the success of many private, public, and
military organizations depends on their ability to manage the flows of materials,
information, and money, which is referred to as the product life cycle.
True

False

3-Supply chain problems can cause delays, products not being where they are required at
the right time, customer dissatisfaction, lost sales, and high expenses that result from fixing
the problems once they occur.
True

False

4-The term supply chain comes from the concept of how systems and processes within an
organization are linked together.
True

False

5-A supply chain involves activities that take place during the entire product life cycle,
"from dirt to dust."
True

False

6-A supply chain can be broken into three major parts: upstream, internal, and
downstream.
True

False

7-The downstream part of the supply chain includes the activities of a company with its
suppliers, which can be manufacturers, assemblers, or both, or service providers, and their
connections with their suppliers.
True

False

8-In the internal part of the supply chain, the major concerns are production management,
manufacturing, and inventory control.
True

False

9-In the upstream supply chain, attention is directed at distribution, warehousing,


transportation, and after-sale service.
True

False

10-SCM aims to minimize inventory levels, optimize production and increase throughput,
decrease manufacturing time, optimize logistics and distribution, streamline order
fulfillment, and overall reduce the costs associated with these activities.
True

False

11-A major requirement for any medium- to large-scale company that is moving to EC
implies an integration between all the activities conducted on the Web and the
ERP/MRP/SCM solutionsin other words, creating an e-supply chain and managing it.
True

False

12-E-supply chain management is the collaborative use of technology to enhance B2C


processes and improve speed, agility, real-time control, and customer satisfaction.
True

False

13-The success of an e-supply chain depends on managing information with strict policies,
discipline, and daily monitoring.
True

False

14-The success of an e-supply chain depends on an e-supply chain that is loosely integrated
both within a company and across an extended enterprise made up of suppliers, trading
partners, logistics providers, and the distribution channel.
True

False

15-Companies can use replenishment information to reduce inventories and eliminate


stocking points.
True

False

16-By combining bar coding and wireless technologies, automobile dealers are able to scan
in goods as they arrive electronically and place them in inventory up to 10 percent faster
than previously.
True

False

17-At hospitals and supermarkets, inventory reorder points have been automated so that
when inventory gets down to a certain point the system will automatically notify a human
of the exact amount to reorder.
True

False

18-Functional products are staple products, such as groceries or gasoline, that have stable
and predictable demand. For these products, an effective supply chain emphasizes speed,
responsiveness, and flexibility rather than low costs.
True

False

19-Pure EC companies may be likely to have more supply chain problems because they
may not have a logistics infrastructure and may be forced to use external logistics services.
True

False

20-A major limitation of RFID currently is the restriction of the environments in which
RFID tags are easily read.
True

False

21-RuBee relies on low-frequency magnetic waves to track products and transfer


information. It is becoming a replacement for RFID because RuBee overcomes many of
RFID's limitations.
True

False

22-With vendor-managed inventory, retailers make their suppliers responsible for


determining when to order and how much to order. The retailer provides the supplier with
real-time information such as point-of-sale data, inventory levels, and a threshold below
which orders are replenished.

False

True

23-The goal of collaborative planning, forecasting, and replenishment (CPFR) is to


streamline product flow from manufacturing plants to retailers.
True

False

24-Studies have shown that electronic-based collaboration and product lifecycle


management (PLM) can reduce product costs and travel expenses by 50 percent, as well as
significantly reduce costs associated with product-change management.
True

False

25-As with any IT project, management needs to be able to justify the development and use
of a corporate portal by comparing its cost with its benefits. The challenge is that despite
the tangible benefits from investment in portal technology, such as include increased
revenues and customer loyalty, most of the benefits of portals are intangible.
False

True

26-A company's internal operations and its relationships with suppliers and other business
partners are frequently:
replaced by
customer-facing
applications.

much more complex than


customer-facing
applications such as
taking an order online.

much less complex than


customer-facing
applications such as
taking an order online.

as complex as
customer-facing
applications such as
taking an order online.

27-For a manufacturer, the supply chain ends:


when the customer
when the supplier delivers raw
when the
decides he/she is
materials and component parts to customer buys
satisfied with a product the manufacturer.
the product.

when the product


is used up and
disposed of.

28-The use of Web technologies to manage warehousing and transportation processes is


called:
collaborative planning

e-replenishment.

downstream processing

e-logistics

29-The e-SCM process that includes integrated production and distribution processes is:
collaborative planning

e-logistics

e-procurement

supply chain replenishment.

30-The last fifteen orders from a manufacturer to its suppliers range from $100,000 to
$8,740,000. This is an example of:
supply inadequacy.

demand manipulation.

order instability.

the bullwhip effect.

31-B2B systems which are used for communication, design, planning, information sharing,
and information discovery are called:
electronic data
systems.

collaborative
commerce.

information aggregation
systems.

electronic bartering
systems.

32-All of the following would be considered c-commerce EXCEPT:


connecting
suppliers.

communication and
collaboration with
suppliers.

sharing on-demand training


aggregating catalogs
courses across many locations
on a central server.
simultaneously.

33-RFID can provide immediate, short-term, and long-term value to organizations. An


example of immediate value from RFID is when:
an RFID tag tells
customer service
which factory made
the faulty product
returned by a
customer.

an RFID tag sends a


report to the supplier
every time one of its
component parts is used
in the manufacturing
process.

an RFID tag reveals the


supplier of a faulty
component without the
need for quality control
to research component
order records.

an RFID tag tells


inventory control
every time a roll of
wire moves out of the
warehouse and onto
the factory floor.

34-A major block in the widespread implementation of collaborative commerce is:


the theory of collaborative
commerce hasn't been proven
effective in real-world
applications.

the technology
needed isn't
available.

the lack of
universally
accepted
standards.

collaborative
commerce is
extremely expensive.

35-Wal-Mart and Levi Strauss collaborate on demand forecasting in order to optimize the
flow of materials along the supply chain. This is an example of:
reducing design cycle time.

CPFR.

APS. reducing product development time.

36-The purpose of CPFR is to:


optimize the flow
of materials along
the supply chain.

minimize
quality
problems in
supplies.

eliminate
intermediaries.

ensure that members of the supply


chain will have the right amount of
raw materials and finished goods
when they need them.

37-________ is a business strategy that enables manufacturers to control and share


product-related data as part of product design and development efforts.
Advanced planning and
scheduling

Product lifecycle
management

Internal
commerce

Collaborative
planning

38-All of the following are true about product lifecycle management (PLM) EXCEPT:
The demand for PLM in
limited because it does
not apply to products
that have short life cycles
or are complex.

PLM tools are


offered by
SAP, Matrix
One, EDS, and
IBM.

PLM is a big step for an


organization because it
requires integrating
different processes and
systems.

PLM can have


significant beneficial
impacts in cycle time,
design reuse, and
engineering.

39-Today, many business experts agree with each of the following EXCEPT:
The supply chain needs
to be operationally
integrated so that
inventory activities link
seamlessly to
manufacturing
activities.

Supply chain
integration has
reduced the
intensity of
competition in
most industries.

The insightful way to


view contemporary
business is that
competition exists
between or among supply
chains rather then
individual companies.

Supply chains from the


suppliers' suppliers to
the customers' customers
should be jointly
planned and designed
for overall optimality by
all of the supply chain
partners.

40-When planning, designing and implementing integrated supply chain operations,


management requires a holistic focus that takes account all of the following primary
factors EXCEPT:
location and
revenues.

culture, including performance


measurement, monitoring, and
incentives.

strategy, structure, IT and business


and people.
processes.

41-Software that helps integrate different types of information systems among


collaborating companies is called:
browser technology.

middleware.

collaborative software.

extranet technology.

42-Collaborative workflow applications:


have predefined
workflows, but can be
redefined quickly
when needed.

are business process


automation tools that
place system controls in
the hands of users.

address missioncritical, transactionoriented, high volume


processes.

address projectoriented and


collaborative
processes.

43-Software applications that address project management concerns are examples of:
administrative workflow
applications.

portal
applications.

collaborations workflow
applications.

production workflow
applications.

44-Addressing mission-critical, high-volume transaction processes is the goal of:


collaborative workflow
applications.

production workflow
applications.

administrative workflow
applications.

portal
applications.

45-The steps required to approve an expense report is an example of:


administrative workflow
applications.

production workflow
applications

collaborative workflow
applications.

portal
applications.

46-________ is the transfer of documents and computer files while videoconferencing.


Interactive whiteboarding

CPFR

Web conferencing

Data conferencing

47-The primary benefits of workflow management systems include all of the following
EXCEPT:
fewer chances for delay or
misplaced work.

less management
intervention.

increased data
security.

cycle time
reduction.

48-When large suppliers or buyers are involved, a workflow system:


will fail because of
system
incompatibilities.

may be helpful for


supply chain
improvements.

is needed for
collaborative
efforts only.

is needed for both the


collaborative efforts and for
supply chain and production
improvements.

49-Groupware is appropriate in all of the following situations EXCEPT:


For groups to share
ideas and opinions.

For networked
environments.

For people working on


different tasks or projects.

For people in the


same room.

50-________ means that the communication and collaboration are done in real time.
Bi-synchronous

Asynchronous

Synchronous

Multi-Synchronous

51-All of the following are types of communication and collaboration done in real time
EXCEPT:
instant messaging

blogging

webinars

VoIP

52-The growth in electronic meeting systems has been driven by all of the following
EXCEPT:
Acceptance of virtual meetings as
Improvements in
Reductions in the price
Shorter
a respected way of doing
cycle times. supporting technology. of the technology.
business.

53-The major benefit of group decision support systems is:

in conducting
virtual meetings.

in passive listening while


information is distributed.

in faster decision making


with greater agreement.

in easier
decision
making.

54-Corporations are moving their phone systems to ________ to cut costs and boost
efficiency.
VoIP

RTC

video kiosks

GDSS

55-All of the following apply to instant video EXCEPT:


The idea is for a kind of video
chat room that allows users to
chat in real time and see the
person(s) they are
communicating with.

It is the natural
result of wanting
to link people via
both voice and
audio.

The highest quality


approach is to add
video cameras to the
participants'
computers.

It evolved from the


spread of instant
messaging and
Internet telephony.

Chapter 8 Innovative EC Systems


1-Wikis are used for informal organizational training because it reduces the cost and time
of training.
True

False

2-E-government applies only to the interaction of the government with its business
suppliers.
True

False

3-The government-to-citizens (G2C) category includes all of the interactions between a


government and its citizens that can take place electronically.
True

False

4-Two major areas of G2C activities are "tourism and recreation" and "research and
education."

True

False

5-Current voting technologies are being implemented in various countries because of the
security provided by these technologies.
True

False

6-The Government Paperwork Elimination Act and the Memorandum on E-Government


ordered the top 500 forms used by citizens to be online by December 2000.
True

False

7-The smart card system is part of a nationwide electronic benefits transfer system in the
U.S. for Social Security and welfare payments and other benefit payments.
True

False

8-Social networks, such as MySpace, Facebook, and YouTube, are rarely used by political
candidates to reach voters because there are too few users of those networks who actually
vote.
True

False

9-Forward auctions are buy-side auction systems used by the government to buy large
amounts of MROs and other materials directly from suppliers.
True

False

10-Electronic filing of business taxes is available in over 100 countries, from Thailand to
Finland to the United States.
True

False

11-The U.S. Navy's Lifelines system is an example of G2E EC.


True

False

12-The e-government transformation process from traditional delivery to full


implementation is a quick process.
True

False

13-G2B is easier to implement than G2C.


True

False

14-One of the most important issues in implementing e-government is its adoption and
usage by citizens.
True

False

15-The topic of e-learning is gaining much attention, especially because world-class


universities such as MIT, Harvard, and Stanford in the United States and Oxford in the
United Kingdom are implementing it.
True

False

16-At Cisco, e-learning helped reduce employee training time and costs by almost 25
percent.
True

False

17-One disadvantage of e-learning is the lower content retention rate compared to


traditional in-person training.
True

False

18-An important advantage of e-learning is that it can provide a fear-free and privacyprotected environment in which students can put forth any idea without fear of looking
stupid.
True

False

19-A drawback of e-learning is that no online course can deliver real-time information and
knowledge in the way a "live" instructor can.
True

False

20-Unlike educational institutions, only a small number of business organizations are using
e-learning on a large scale.
True

False

21-The dynamic approach to publications personalizes content in real time and transmits it
on the fly in the format best suited to the user's location, tastes, and preferences. This
approach also is called just-in-time (JIT).
True

False

22-One of the seven principles for building effective blogs is to think of a blog as a database
instead of a newspaper-like collection of posts.
True

False

23-Senior executives and companies are using the blogosphere to build trust-based
relationships, polish corporate reputations, promote social causes, and accomplish other
professional goals.
True

False

24-Knowledge portals are single-point-of-access software systems intended to external use


only provide easy and timely access to knowledge and to support communities of
knowledge workers who share common goals.
True

False

25-P2P signifies a shift in peer-networking emphasis from hardware to applications


because easier configuration and control over applications enable even nontechnical
people to join the user community.
True

False

26-________ are a popular online publishing technology for creating a Web page that can
be edited by anyone with a standard Web browser.
P2P

Point-casts

Wikis

Blogs

27-All of the following are examples of e-government EXCEPT:


a state purchasing officer
places an online order for
office supplies from an ecatalog sent to her by a
national office supply
store.

a company sells
army and navy
surplus supplies
at auction over
the Internet.

an unemployed worker
consults a Web site
operated by the state
employment department to
learn about job openings in
his city.

a contractor submits
an application for a
building permit
using a city hall
Web site.

an employee at the Chamber


of Commerce gets local
demographic data from a
U.S. Census site.

a driver applies for


and pays for the
renewal of his auto
tag online.

28-An example of G2C is:


a road contractor uses
the Internet to submit a
closed bid on a paving
contract.

a regional hospital
conducts an online
reverse auction for
cleaning supplies.

29-Chaplin reports quarterly sales revenue from his business to city hall over the Internet.
He pays his local business tax with a credit card. This is an example of:
e-government

G2C e-commerce

e-Procurement

G2B e-commerce

30-A government agency uses an online reverse auction to satisfy the tendering system
requirements specified by law. This is an example of:
e-Procurement

G2B e-commerce

G2C e-commerce

e-government

31-Government-to-employee applications can lead to significant efficiency improvements


for all of the reasons EXCEPT:
Many military
Most government
employees are stationed employees use
in remote locations that handheld digital

Governments employ Employees of federal and


large numbers of people state governments often
that need to be paid and work in a variety of

are best served via the


Internet.

trained.

devices.

geographic locations.

32-All of the following are problems in implementing e-Government EXCEPT:


it is difficult to protect
personal data collected
through an eGovernment site.

businesses have been


transformation is
more receptive to
typically very
G2B than
slow
individuals to G2C.

the technology needed to


implement stage 6 of the
Deloitte transformation
process does not exist yet.

33-One of the most important issues in implementing e-government is:


providing for secure its adoption and
payments.
usage by citizens.

the use of encryption and


digital signatures.

designing feature-rich
Web sites.

34-All of the following are advantages of e-learning EXCEPT:


it costs less to deliver education college professors are
online than in a traditional
anxious to develop new
classroom.
online courses.

knowledge
retention is
higher.

learning time
is reduced.

35-All of the following are potential drawbacks of e-learning EXCEPT:


assessment issues
remain to be
resolved.

knowledge retention is
lower than in traditional
classrooms.

protecting the intellectual


instructors must
property of content
be retrained.
developers.

36-Most universities use e-learning:


exclusively in
as a supplementary
reaching students who
channel to traditional
couldn't otherwise
classrooms.
attend classes.

only when forced by


administrators to use it as a
way to recruit distant
students or reduce costs.

as a total
replacement for
traditional
classrooms.

37-The business forces that are driving the transition from traditional education to online
learning are all of the following EXCEPT:
limited supply of faculty with

competition and cost

network

technological

pressures.

specialized expertise.

connectivity.

change.

38-Which of the following is an example of edutainment?


Two or more
students sharing
music over the
Internet.

An online science fiction


game whose object is to
blast as many aliens as
possible in a 60 second
round.

A community college
providing an online
college course on
digital media.

An online game that uses


colorful characters to
teach young children
about numbers.

39-One of the facilitators of e-learning is ________ technology such as wikipedia.org.


Macromedia

Blackboard

WebCT

Web 2.0

40-________ is the electronic delivery of newspapers, magazines, books, videos, music, and
other digitizable information over the Internet.
Blogging

Social networking

Online publishing

Webinar

41-More and more people are willing to pay for digital music, as shown by the success of
________.
Napster

Apple's iTunes

Kazaa

P2P

42-________ is commonly used to broadcast public lectures and e-seminars, promote the
work of new or unknown musicians, and broadcast international entertainment activities.
Podcasting

Webcasting

Dynamic publishing

File sharing

43-A podcast is distinguished from other digital audio formats by:


its use of unpaid
subscriptions.

the iPod
its lack of
hardware
proprietary
required to hear
content.
it.

its ability to be downloaded


automatically, using software capable
of reading feed formats such as RSS.

44-The exclusively online publication of Stephen King's e-book Riding the Bullet in March
2000:
as disrupted by hackers
who breached security,
then distributed free copies
of the book.

was an unqualified success and


established electronic publishing
as a legitimate competitor for
traditional publishers.

produced
very few
sales.

was a failure
because the cost
of the book was
too high.

45-A type of e-book referred to as the ________ is a truly multimedia, online-only book that
has hyperlinks, three-dimensional text and display, graphics, audio, and video. It supports
nonlinear exploration of topics.
download

Rubics-cube hyperlink online reference book


model.
book

interactive, build-your-own
decision book

46-The primary advantage that e-books offer publishers is:


the ability to
the ease of updating
reach many
books in real-time.
readers.

lower production,
marketing, and delivery
costs.

the ease of customizing


textbooks and trade books.

47-Which of the following statements about blogs is not true?


Blogs became very popular after
the September 11, 2001 terrorist
attacks when people were looking
for as many sources of
information as possible and for
personal connections to the
tragedy.

The most
common types of Blogs are limited to
blogs are
one-way
professional
communication.
blogs,

A blog is a personal
Web site, open to the
public, in which the
owner expresses his
or her feelings or
opinions.

48-Risks in corporate blogging include all of the following EXCEPT:


the risk of disciplinary
action against abusive
bloggers.

the risk of
revealing trade
secrets.

the risk of
lawsuits

the risk making statements that are


or could be construed as libel or
defamation.

49-A major purpose of an organizational knowledge base is to support and allow ________.

organizational capital

responsible blogging

knowledge sharing

e-learning

50-The tasks of KM include each of the following EXCEPT:


enhancing a knowledge
environment in order to
conduct more effective
knowledge creation,
transfer, and use.

managing knowledge
as an asset so as to
increase the effective
use of knowledge
assets over time.

creating knowledge
restricting
repositories where
knowledge access to
knowledge can be
prevent its transfer
stored and retrieved
between individuals.
easily.

51-Knowledge is of limited value if:


company databases are not
accessible to decision
makers.

users contribute their


it is not
own specialized content. shared.

companies protect it to
maintain competitive
advantage.

52-________ involves using various computer-based tools and techniques to analyze


transaction data and generate new ideas.
Knowledge management Knowledge capture Knowledge classification Knowledge creation

53-Knowledge generated in e-business contributes to the enhancement of three core


operating processes, which include all of the following EXCEPT:
customer relationship
management

supply chain
management

product development
management

project
management

54-Customer-to-customer (C2C) e-commerce is conducted in various ways on the Internet,


but the best-known C2C activities are:
C2C exchanges

C2C auctions

Personal services

Classified ads

55-P2P systems have all of the following key characteristics EXCEPT:


They provide for real-time They support crossaccess to other users
networking protocols such
through techniques such as SOAP or XML-RPC,
as instant messaging and which enables a program

The users'
computers can
act as both
clients and

The overall system is


well integrated, but
lacks tools for easy
creation of content or

multichannel
on one computer to
collaboration applications. execute a program on a
server computer.

servers.

for adding
functionalities.

Chapter 9 Mobile Computing and Commerce


1-Using wireless technologies, one can create EC applications that are not available with
wireline systems.
True

False

2-Mobile computing refers to a computing paradigm designed for workers who travel
outside the boundaries of their organizations or for anyone on the move.
True

False

3-The two solutions that were necessary for mobile wireless computing to be feasible were
computers that were small enough to be carried easily and long-life batteries.
True

False

4-A laptop or notebook computer can become wireless with the addition of a cellular chip.
True

False

5-Overall, PDA sales dropped in the mid-2000 because PDAs lacked features beyond
personal information management.
True

False

6-The primary application of Blackberry is instant messaging.


True

False

7-Hardware and software designers need to consider the special requirements of mobile
devices such as small screens, reduced memory, limited bandwidth, and restricted input
capabilities.
True

False

8-A Web server may need two versions of the same Web pagea normal page with full
graphics for desktop computers and a mobile page for PDAs and smartphonesand a way
to distinguish between devices requesting the Web page.
True

False

9-The infrastructure to support mobile commerce is inexpensive and relatively simple to


put in place.
True

False

10-Common standards for various mobile devices simplify the development of software
applications for wireless devices.
True

False

11-Small handheld computing devices use a variety of interface approaches including a


touch screen, mini-joystick, jog dial, and thumb wheel.
True

False

12-The Wireless Application Protocol, or WAP, is a suite of network protocols designed to


enable different kinds of wireless devices to access WAP-readable files on an Internetconnected Web server.
True

False

13-The WAP gateway is a server that is responsible for translating information requests
from the device into an HTTP request that the Web server can understand.
True

False

14-Micropayments for small-purchase amounts of less than $10 have become widespread in
EC, in part because of the widespread use of all types of mobile devices.
True

False

15-Increased use of voice-support services exploits the built-in audio capabilities of many
mobile devices and reduces their dependence on unsatisfactory input solutions, such as
handwriting recognition, keypads, or virtual touch-screen keyboards.
True

False

16-The highest level of voice support services is a voice portal, which is a Web site with an
audio interface that can be accessed through a telephone call.
True

False

17-WiFi is a set of telecommunications standards that enables wireless devices to


communicate with each other over short distances, but which suffers from interference and
security problems.
True

False

18-The most popular Wi-Fi standard is 802.11b, which is inexpensive and offers sufficient
speed for most devices, but has interference problems.
True

False

19-A common type of personal area network (PAN) is Bluetooth-enabled headsets that
people use with their cell phones.
True

False

20-Increasingly, 802.11b is being used in commercial environments where cost is not a


major issue and where laptop computers can take advantage of the 54 Mbps transfer rate.
True

False

21-WiMax is an IEEE 802.16 wireless standard for making broadband network access
widely available for data and voice over a medium-sized area, and whose impact on ecommerce is still unclear.
True

False

22-Even though micro-payment technology has wide-ranging applications, such as making


payments to parking garages and public transportation, two factors limiting the success of
micro-payment applications are transaction costs and nonpayment risks.
True

False

23-The two greatest opportunities in B2B mobile commerce are to use wireless
communication to share information along the supply chain and to make electronic
payments.
True

False

24-In Las Vegas, the Luxor pre-registers guests when their airplane lands and they turn on
their cell phones. Also, the hotel can determine when guests leave the hotel, luring them
back to gamble with mobile incentives and pitches. This is an example of Global
Positioning Systems (GPS).
True

False

25-Several key ethical issues in m-commerce include isolation, loss of privacy, and potential
health damage from cellular radio frequency emissions.
True

False

26-M-commerce transactions and activities require ________ and ________.


hardware and software
infrastructures; infrastructure
support

cell phones;
smartphones;
portable computers switches

27-Infrastructures that support the wireless connection are:

wired networks;
access points

PDAs,
smartphones, and
portable
computers.

WAP gateways,
GPS locators,
and GPS
satellites.

network access points, mobile


web servers, mobile
communications server switches,
devices, and
and cellular transmitters and
microbrowsers.
receivers.

28-Components of a wireless infrastructure that support delivery of services over a wireless


connection are:
WAP gateways,
GPS locators,
and GPS
satellites.

network access points, mobile


PDAs,
web servers, mobile
communications server switches,
smartphones, and devices, and
cellular transmitters, and
portable computers. microbrowsers.
receivers.

29-Characteristics of mobile devices that create special requirements that hardware and
software designers need to anticipate when designing mobile computing systems include all
of the following EXCEPT:
restricted input capabilities

small screens

reduced memory

broad bandwidth

30-The exchange of updated information with other computing devices is called:


data transferring

marking

synchronization.

docking

31-A suite of network protocols designed to enable different kinds of wireless devices is
called:
a mobile application user
interface.

Wireless Application
Protocol.

wireless
middleware.

a mobile operating
system.

32-The application logic in a handheld PDA, smart phone, Palm or Wintel notebook is
called:
a mobile application user
interface.

wireless
middleware.

a mobile operating
system.

Wireless Application
Protocol.

33-________ enables the determination of the location of an enabled device.


WAP

GPS

SMS

PDA

34-Rick sends a message from a delayed flight to his friend on her cell phone that he will be
arriving late. The service that allows the sending and receiving of such short text messages
on mobile phones is called:
LOL

SMS

TMG

MSG

35-Micropayments are electronic payments:


that are less than
$100.00.

that are less than


$1.00.

that are less than


$10.00.

from a mobile
device.

36-A ________ is suitable for mobile users who need to make very short-range device-todevice wireless connections within a small space, such as a single room, and most
commonly with Bluetooth.
wireless area network

local area network

Wi-Fi area network

personal area network

37-Most WLANs run on a telecommunications standard known as ________, which is more


commonly called ________.
IEEE 802.11; Bluetooth

WLAN; hotspot

IEEE 802.16; WiMax

IEEE 802.11; Wi-Fi

38-The IEEE standard ________ offers bandwidth transfer rates of 200 to 540 Mbps,
which makes it impractical because it exceeds the limits of most broadband connections
used by homes and small businesses.
802.11b

802.11n

802.11g

802.16

39-All of the following about wireless wide area networks (WWAN) are true EXCEPT:
Most
WWANs are
cellular phone
networks.

When a device is
turned on, a SIM
card inside the
device identifies
itself to the
WWAN.

At the center of each cell is a


base station transceiver or cell
tower that is used to send and
receive signals to and from
mobile devices operating within
the cell.

The single WWAN


network standard insures
compatibility of handsets
within and between
countries.

40-The major attributes that enable development of new applications that are possible only
in a mobile environment include all of the following EXCEPT:
Ubiquity

Security

Personalization

Localization

41-The development of m-commerce is being driven by the following technological,


business, social, and economic factors EXCEPT:
The improved
price/performance of
mobile services.

The widespread
availability of more
powerful wireless
devices.

The growth of a
handset culture and
mobile workforce.

The transition to a
manufacturing
economy.

42-As in e-commerce, m-commerce B2C applications are concentrated in each of the


following areas EXCEPT:
retail shopping for
products and services

telecommunications

targeted
advertising

providing content for a fee


through mobile portals

43-The major enterprise mobile applications are all of the following EXCEPT:
logistics and
supply chain

e-mail and cell phone research and


contacts
development

customer relations and sales


force automation

44-By enabling sales force employees to record orders in real time, the organization
benefits through each of the following EXCEPT:
lower clerical and
administrative
overhead.

more extensive collaboration


fewer data
improved manufacturing
and sharing of customer
entry errors.
and delivery scheduling,
leads.

45-Mobile access supports the two functions of sales force mobilization and field service,
which extends the reach of ________ to both employees and business partners on a 24/7
basis to any place where recipients are located.
customer relationship
management

vendor
management

supply chain
management

inventory
management

46-One way to share information with supply chain partners is wireless ________, which is
the science of measuring physical phenomena such as temperature, volume, or an on/off
condition at a remote point and transmitting the value to a distant recorder or observer.
RFID

telemetry

mobilization

osmosis

47-WiMax and 3G wireless mobile technologies offer telemedicine application


opportunities that include all of the following EXCEPT:
Real-time
consultation
between a patient in
one location and a
medical specialist in
another.

Wearable heart monitors


linked to a cell phone can
automatically contact
doctors or family
members at the first sign
of health problems.

Prescriptions can be
transferred
electronically to the
appropriate pharmacy
for a no-wait pick-up
by the patient.

Reduced threat of
malpractice suits
because there is no
hands-on interaction
between the remote
physician and the
patient.

48-All of the following are barriers to location-based m-commerce EXCEPT:


Consumers see constant
location data
transmissions as a
violation of privacy.

There are presently not


Wireless
enough location-based
bandwidth is
systems to make this a
limited.
viable technology.

The accuracy of location


technologies is often less
than consumers expect.

49-The services provided through location-based m-commerce focus on key factors which
include all of the following EXCEPT:
Tracking, or
Timing, or determining
Navigation, or plotting
Geocaching, or
monitoring the
the precise time at a
a route from one
determining the
movement of a person
location to another.
topography of an area. specific location
or thing.

50-A(n) ________ is a computer system capable of integrating, storing, editing, analyzing,


sharing, and displaying spatial information.
geographical information system on-star system l-commerce system global positioning system

51-You are walking near a coffee shop and suddenly your cell phone beeps with a message:
"Come inside and get a free biscotti with any purchase." This is an example of:

location-based
advertising

mcommerce

customer relationship
management

permission
marketing

52-________ refers to the integration of computers and wireless communications in order


to improve information flow.
Remote telemetry

E-911

Telematics

Mobility

53-Many experts believe that the next major step in the evolution of computing will be
________ in which almost every object will have processing power and a wired or wireless
connection to a network.
universal computing

mobile computing

persistent computing

pervasive computing

54-All of the following about RFID are true EXCEPT:


An RFID tag can hold 20
times the amount of
information a bar code can
hold, and the tag can be
read through cardboard,
wood, and plastic at a range
of up to 100 feet.

An RFID tag
includes an
antenna and a chip
with information
about the item.

An RFID tag remains


inactive until radio frequency
energy from the tag's radio
transmitter hits its antenna,
giving the chip enough power
to emit a 96-bit string of
information.

An RFID
reader contains
a radio
transmitter and
receiver.

55-One initiative underway that could lead to widespread support for the introduction of
RFID is the ________, which identifies the manufacturer, producer, version, and serial
number of each item and does not require line-of-sight contact to be read.
Smart Product Network Electronic Product Code Universal Product Code Sensor Network

Chapter 10 Dynamic Trading


1-The Internet provides an infrastructure for executing auctions with many more
participating sellers and buyers than with offline auctions, but administrative costs are
higher.
True

False

2-In some types of auctions, sellers offer product; and in other types of auctions, buyers
post their product needs.
True

False

3-Dynamic pricing refers to a transaction in which the price is not fixed, but fluctuates
based on current supply-and-demand relationships.
True

False

4-Reverse auctions have two major purposes: liquidation and market efficiency.
True

False

5-B2B reverse auctions are gaining popularity as an online mechanism for buying goods
and services.
True

False

6-A popular type of auction model where there is one buyer and many potential sellers is
the "name-your price" model that was pioneered by eBay.com.
True

False

7-An auction that takes place between sellers and buyers in one industry or for one
commodity is called a vertical auction because activity goes up and down the supply chain
in a single industry, rather than horizontally between members of supply chains in
different industries.
True

False

8-Specialized sites for vertical auctions are referred to as auction vortals.


True

False

9-Through e-auctions, sellers can gain more customer dollars by offering items directly
rather than through an expensive intermediary or by using an expensive physical auction.

True

False

10-A major benefit of e-auctions is the reduced rate of fraud because of the openness of the
transaction.
True

False

11-The "name-your-own-price" model is based on the fundamental concept of the


downward-sloping supply curve in which prices vary based on supply.
True

False

12-Entering a high bid without ever planning to pay for the auction item is called sniping.
True

False

13-In addition to auctions, dynamic prices can be determined by online negotiation, which
is the back-and-forth process of bargaining until a buyer and seller reach a mutually
agreeable price.
True

False

14-Barter agents are software that can support the back-and-forth process of online
negotiation.
True

False

15-Double-auction markets tend to generate competitive outcomes because a double


auction is an interactive market in which both buyers and sellers are competitive.
True

False

16-Prices paid in online auctions are lower when auctions are an alternative selling channel
rather than an exclusive selling arrangement.
True

False

17-Negotiating prices transfers the burden of determining prices to the market itself so the
resulting negotiated prices will always be fair and effective.
True

False

18-Bid shielding is a type of e-auction fraud where sellers place phantom bidders to bid up
the price of items they are selling and hide (shield) low bids by actual potential buyers.
True

False

19-Specialized authentication services are very effective and widely used to determine
whether an item is genuine and described correctly as a way to protect against counterfeit
products.
True

False

20-Third-party escrow services are used for products valued at more than $200 to protect
both the buyer and seller when either the buyer or seller feels the need for additional
security.
True

False

21-When a company decides to use auctions as a sales channel, one of the strategic issues in
B2B is the potential conflict with existing distributors and distribution channels. Therefore,
some companies use auctions only to liquidate obsolete, used, refurbished, or damaged
products.
True

False

22-The process of building auction applications is easy because of intelligent agents and
other building tools.
True

False

23-WineryExchange successfully auctioned grapes to wineries, which ended the tradition of


sales being based on established relationships between grape growers and wineries.
True

False

24-Privacy is one of the benefits of mobile auctions because the Internet cell phone is more
private than a PC.
False

True

25-Auctions may be used as a strategic tool by both online and offline companies.This type
of strategic alliance will be very popular due to its win win possibilities.
False

True

26-Auctions are all of the following EXCEPT:


They are a
marketing
channel.

They are an established method They are suitable for They are a market
of commerce for generations. most consumer goods. mechanism.

27-Dynamic pricing refers to :


prices that are determined prices that are regulated by
government agencies.
by market forces.

prices that
prices that are
maximize revenue. negotiated.

28-________ work best with many buyers and many sellers.


Forward auctions

Reverse auctions

Dynamic exchanges

Bartering

29-The ________ auction model is popular in B2B.


one buyer, many potential one-buyer, onesellers
seller

one seller, many potential many buyers, many


buyers
sellers

30-Two purposes of a type of ________ auctions are liquidation and market efficiency.
one buyer, many potential many buyers, many
sellers
sellers

one-buyer, one- one seller, many potential


seller
buyers

31-Reverse auctions are a type of ________ auctions.


one-buyer, one- one buyer, many potential many buyers, many
seller
sellers
sellers

one seller, many potential


buyers

32-The "name-your own-price" model pioneered by Priceline.com is a type of ________


auction.
many buyers, many
sellers

one buyer, many potential one seller, many potential one-buyer, onebuyers
seller
sellers

33-Auctions done in exchanges or double auctions are ________ auctions.


many buyers, many
sellers

one-buyer, one- one seller, many potential one buyer, many potential
seller
buyers
sellers

34-A(n) ________ takes place between sellers and buyers in one industry or for one
commodity, such as flowers, cars, or cattle.
vertical auction

exchange

open auction

negotiation vortal

35-All of the following are potential benefits from auctions to sellers EXCEPT:
sellers can liquidate large sellers receive valuable auctions can broaden the
sellers are always
quantities of obsolete
price sensitivity
customer base and
anonymous.
items very quickly.
information.
reduce cycle time.

36-In electronic auctions, near-perfect market information is available about prices,


products, current supply and demand, and so on. This feature provides benefits to
________.
sellers

buyers

buyers and sellers

companies and individuals

37-Benefits of electronics auctions (e-auctions) to sellers include all of the following


EXCEPT:
Anonymity

Lower transaction and


administrative costs

Larger reach and


increased revenues

Removal of expensive
intermediaries

38-________ refers to the tendency of customers to stay at Web sites longer and come back
more often.
Loyalty

Frequent purchase

High repeat

Stickiness

39-Limitations of e-auctions include all of the following EXCEPT:


Risk of fraud

Higher order fulfillment costs

Long cycle time

Dynamic pricing

40-Research has shown that e-commerce sites that use an auction model tend to:
reach critical mass more quickly become
liquid.
than catalog-order-based.

fail more often than reach critical mass more


other models.
slowly than other models.

41-The first step in the auction process is:


preparing the
bids.

arranging
financing.

searching and
comparing.

registration and participants'


profiles.

42-Jackie uses a software system to place bids automatically on her behalf until her
predetermined maximum price is reached. The software bids in such a way as to minimize
the final bid. This is referred to as:
sniping.

bidding agents.

proxy bidding.

pricing agents.

43-Compared to competitive markets, auction prices are often ________ when there are
multiple bidders.
the same

lower

higher

dynamic

44-Compared to competitive markets, auction prices are often ________ when there are
very few bidders.
lower

higher

dynamic

the same

45-The most serious disadvantage of e-auctions is:


logistics.

payment delays.

unreliable auction software.

the risk of fraud.

46-The practice by sellers of having associates place fake bids in an auction as a way to
drive up the selling price is called:
bid shielding.

bid fixing.

shilling.

sniping.

47-Bidders sometimes use phantom bidders to drive bid prices up rapidly at the beginning
of an auction, thus discouraging bidding from legitimate bidders. At the last minute, the
phantom bidders pull out, which awards the item to a very low bidding customer. This
practice is called:
shilling.

sniping.

bid fixing.

bid shielding.

48-John wants to know if the first edition novel he just purchased through an e-auction is
actually a first edition. The auction host helps him locate an expert that will tell him
whether the novel is a genuine first edition or a fake. This is an example of:
certification.

authentication.

verification.

integrity.

49-A major shortcoming with authentication services is:


it is impossible to tell
whether many items
are reproductions or
genuine.

dishonest
authenticators are the
primary sources of
fraud on the Internet.

most auction sites


forbid the use of
authentication
services.

two different authenticators


may come up with different
opinions regarding the
authenticity and description
of a given item.

50-Many companies use intermediaries or trading assistants instead of implementing eauctions themselves for each of the following reasons EXCEPT:
To bring many
Costs of auction intermediaries or
To avoid tax
The company name is
more
buyers
to
the
assistants are less than the costs of
and legal
not widely recognized.
auction.
physical auctions.
fees.

51-Each of the following is one of the three major categories of auction rules EXCEPT:

timing rules

clearing rules

bidding rules

information-revelation rules.

52-Each of the following is true about auction rules EXCEPT:


Rules eliminate
conflicts with existing
distributors and
distribution channels.

Rules are intended to


Auction rules vary from
smooth the auction
country to country due to
mechanism and to
legal considerations.
prevent fraud.

The success of
auctions depends on
complying with
auction rules.

53-The process of building auction applications is complex for all of the following reasons
EXCEPT:
auctions must be
integrated with the
back-end offices.

the number of
auctions must be integrated with auctions must
needed features can the legacy systems of
provide payment
be very large.
participating companies.
systems.

54-Many auction sites are implementing ________ because of the significant increase in the
number of users who browse the Internet wirelessly.
m-commerce applications

instant message notification

authentication

vortals

55-The limitations of mobile auctions are all of the following EXCEPT:


Internet-enabled
Internet cell
phones have limited
phones are less
private than a PC. memory capacity

Wireless systems
are not as safe as
wireline ones.

Portable devices are small and


may have a problem showing
pictures of auction items.

Chapter 11 E-Commerce Security


1-Fraud refers to a business activity that relies on force or threats to deprive a person or
company of property or other assets.
True

False

2-The trend in online crimes shows that most new scammers and other con artists are not
computer geniuses.

True

False

3-Identity theft has become the primary concern of online shoppers.


True

False

4-Defending against online cons and compensating for the damages caused by identity
thieves have significantly increased the costs of EC.
True

False

5-To minimize the risk of fraud from phishing and crimeware, EC retailers need to
authenticate the buyer.
True

False

6-An EC security strategy consists of firewalls and other types of technology to prevent and
detect unauthorized use of the organization's brand, identity, Web site, e-mail, information,
or other asset.
True

False

7-Information assurance broadly refers to the protection of information systems against


unauthorized access to information, unauthorized modification of information, and denial
of service to authorized users.
True

False

8-The EC industry ranks security over convenience. So the EC industry strives to enforce
safeguards, such as passwords for credit card transactions, that make online shopping
safer even if those safeguards make it more inconvenient for customers.
True

False

9-Credit card issuers want to cooperate and share leads on criminal activity with each
other and law enforcement even though prosecution with an uncertain outcome.

True

False

10-Most U.S. Web hosting providers log all activity so, in most cases, they can identify the
source IP address and source ISP with timestamps and other identifying information.
True

False

11-Requiring stronger EC standards and information sharing by the credit card companies
would not fix the security problems facing online retailers and shoppers.
True

False

12-Spammers use zombie computers to distribute spam because it is both cheaper and less
risky.
True

False

13-According to the Mitre Corporation's list of Common Vulnerabilities and Exposures, two
of the top five reported vulnerabilities were within Web applications.
True

False

14-The legal standard of due care requires that a company take reasonable care to defend
against risks affecting its EC business and online transactions.
True

False

15-Because of the lack of source authentication and data integrity checking in DNS
operations, Internet services are vulnerable to attacks.
True

False

16-Experts believe that a strict e-business risk management program that was rigorously
managed could not have prevented many of the data breaches.
True

False

17-EC security programs have a life cycle during which their EC security requirements
must be evaluated and adjusted annually.
True

False

18-According to the CIA security triad, the success and security of EC depends on the
confidentiality, integrity, and accessibility of information and the business Web site.
True

False

19-Nonrepudiation is closely associated with authentication and assures that an online


customer or trading partner cannot falsely deny their purchase or transaction.
True

False

20-The FTC, SEC and other government agencies cannot impose harsh penalties on
companies whose confidential data has been breached unless a company employee caused
the breach.
True

False

21-Phishing attacks rely on social engineering, which is a nontechnical attack that uses
something to trick users into revealing information or performing an action that
compromises a computer or network.
True

False

22-The time-to-exploitation, which is the elapsed time between when a vulnerability is


discovered and the time it is exploited, of most sophisticated spyware and worms has
decreased from several months to a few weeks.
True

False

23-Unlike denial of service (DOS) attacks, botnet attacks are less dangerous because they
cannot disrupt a web site or EC application.
True

False

24-The ability of a biometric system to identify a person depends on the existence of


database of enrolled users that is searched for a match based on the person's biometric
trait.
False

True

25-Virtual private networks (VPNs) are a special category of software that can monitor
activity across a network or on a host computer, watch for suspicious activity, and take
automated action based on what it sees.
True

False

26-The incidence of online fraud and identify theft has increased for each of the following
reasons except:
New effective phishing
Information is today's
scams and schemes
most valuable form of
being carried out by
international currency.
computer experts.

Scammers outsourcing
work to programmers to
seize control of computers
or wireless networks.

Growth in EC sales
and the number of
shoppers with
higher incomes.

27-Cyber cons have a negative effect on EC because


con
artists
have
gone
low-tech.

companies cannot expand


their e-business to other
countries with
underdeveloped legal
systems.

a majority of potential
customers do not shop
online because they are too
afraid of fraud to trust
online merchants.

defending against these


cons and compensating for
damages significantly
increase the costs of EC.

28-The U.S. agencies dedicated to eliminating fraud resulting from phishing and crimeware
are:
The High-Tech Crime
The Group of
Network, AntiEight, VeriSign,
Phishing Working
and NameProtect. Group, and Internet
Research Lab.

The High-Tech Crime


Network, Anti-Phishing
Working Group, and
Federal Trade
Commission.

The Computer Security


Institute, High-Tech
Crime Network, and
Anti-Phishing Working
Group.

29-________ is a crimeware technique used to steal the identity of target companies to get
the identities of their customers.

Social engineering.

Phishing.

Pretexting.

Spamming.

30-Where do a huge majority, possibly as high as 95 percent, of hackers reside?


Turkey, China, Romania, or Russia, India, Germany, or
Argentina.
Brazil.

In the G8
countries.

In South
America.

31-The key reasons why EC criminals cannot be stopped include each of the following
except:
Lack of cooperation
from credit card
issuers and foreign
ISPs.

Strong EC security makes


Sophisticated hackers
online shopping
use browsers to crack
inconvenient and
into Web sites.
demanding on customers.

Online shoppers do not


take necessary
precautions to avoid
becoming a victim.

32-It is currently known that if a front-end application such as a Web site is effectively
secured, then
the data itself
is secured by
firewalls.

the data itself is secure


because web applications
are not targeted by
attackers.

the data itself may not be


secure because the
application may not
function as planned.

the data itself may not


be secure because backend databases may not
function as
planned.

33-A vulnerability
is the estimated cost, loss,
is a
or damage that can result if
software
a threat exploits a
bug.
vulnerability.

is a weakness in software or
is the probability
other mechanisms that a hacker
that a weakness will
can use directly to gain access to
be known and used.
a system or network.

34-The underlying reasons why a comprehensive EC security strategy is needed include all
of the following except:
Managers
treating EC
security as a
process.

The Internet was designed


The shift
for maximum efficiency
toward profitwithout regard for its
motivated
security or users with
crimes.
malicious intent.

Many companies fail to


implement basic IT security
management best practices,
business continuity plans, and
disaster recovery plans.

35-The protection of information systems against unauthorized access to or modification of


information that is stored, processed, or being sent over a network is referred to as
________.
Information defense. Information security triad. Information integrity. Information assurance.

36-The success and security of EC depends on the ________ of information and the
business Web site.
authentication,
authorization, and
nonrepudiation

encryption,
functionality, and
privacy

quality,
confidentiality, integrity,
reliability, and
and availability
speed

37-The basic security concepts relating to customers and other users are:
authorization,
nonrepudiation, and
information assurance.

information assurance, authentication,


confidentiality, and
authorization, and
authentication.
nonrepudiation.

confidentiality,
integrity, and
availability.

38-Digital signatures or digital certificates:


are used to validate the sender and time
stamp of the transaction so it cannot be
later claimed that the transaction was
unauthorized or invalid.

have been
compromised by
phishers and
spammers.

provide complete
a
confidence that the
and
transactions are secure. b

39-The most cost-effective approach to EC security is to develop and implement a strategy


that
requires digital
signatures or digital
certificates for all
transactions.

depends on the
trust and
confidence of
customers.

proactively meets
regulatory, financial,
marketing and
operational requirements.

protects against
unauthorized transactions
and overrides of
accounting controls.

40-To be effective, an acceptable use policy (AUP) needs


to specify rules for

to inform all users of their

to be written by to be incorporated

firewalls, access control responsibilities when using


the company's
into business
lists, monitoring, and company networks, computer
legal department. projects and
intrusion detection
proposals.
equipment, wireless devices, and
systems.
customer data.

41-In 2005, human error was responsible for almost ________ percent information security
breaches in organizations.
40

10

20

60

42-Which of the following statements about hardware and software security defenses is
false?
After the EC security
program and policies are
defined and risk assessment
completed, then the software
and hardware needed to
support and enforce them can
be put in place.

Hardware and software


security defenses protect
against irresponsible
business practices or
corrupt management.

If firewalls and
There is no
antivirus software are
single hardware
not upgraded and
or software
monitored
solution for all
constantly, they will
companies.
not remain useful.

43-Social engineering attacks are:


no longer considered to be
serious Internet threats due
to the increased security of
MySpace, LinkedIn, and
YouTube.

take advantage of Web


are a combination
2.0 applications like
of technical and
social networking sites,
nontechnical
blogs, wikis and RSS
attacks.
feeds.

an example of
technical attacks
requiring software or
systems knowledge.

44-A technique known as web page hijacking


downloads what appears to
be an "important
document," but which
contains a trojan, a
program that gives the
sender control of the
infected machine.

45-A botnet is:

enables a malicious Web


master to displace the
pages of an EC Web site in
the Search Engine Results
Pages (SERPS) to redirect
customers to another site.

causes a high
enables online
volume of
gambling that are
search engine
actually fronts for
traffic similar to
international money
a denial of
laundering operations.
service attack.

a piece of software
code that inserts
itself into a host or
operating system to
launch DOS
attacks.

a collection of a few
hundred hijacked Internet
computers that have been
set up to forward traffic,
including spam and viruses,
to other computers on the
Internet.

a piece of code in a
worm that spreads
rapidly and exploits
some known
vulnerability.

a coordinated network
of computers that can
scan for and
compromise other
computers and launch
DOS attacks.

46-Which technologies are designed and used to secure EC communications across a


network?
PINs, cryptocards,
and point-of-sale
systems.

Plastic cards with magnetic


strips, intrusion detection
systems, and progressive
tokens.

AUPs, ACLs,
and network
login IDs.

Access control lists,


tokens, passwords, and
biometric systems.

47-Public key infrastructure (PKI) is an authentication method


that encrypts and
decrypts large
amounts of data
effectively.

that is based on the Data


Encryption Standard, which is
the standard symmetric
encryption algorithm supported
by U.S. government agencies.

that uses
encryption keys
ranging from 64
bits to 128 bits.

that has become the


cornerstone for secure
e-payments and
intranet applications.

48-Secure Socket Layer (SSL), which is also known as Transport Layer Security (TLS):
is designed to
handle all steps in
the validation of
credit card
numbers.

has been
replaced by
certificate
authorities.

is one of the major


generally accepted
protocols for securing ecommerce used by
Microsoft and Netscape.

was invented by Microsoft to


use standard certificates for
authentication and data
encryption to ensure privacy or
confidentiality.

49-Access to a network ought to be based on:


the policy of least privilege
where access to network
resources are blocked and
permitted only when needed
to conduct business.

the policy of
role-specific security the policy of need-toacceptable use
protocols where
know where access
where access is
access is limited by a by all non-employees
restricted by the
user's level of trust. is blocked.
firewall.

50-Which of the following does not correctly describe what firewalls protect against?
Some programs have
bugs or special
features that create
application
backdoors, which
allowing for remote
access.

Spammers often use SMTP


session hijacking to redirect email through the SMTP server
of an unsuspecting host, which
helps hide their identity.

Remote logins occur


when an unauthorized
users connects to a PC
and gains control of it.

Macros are the


electronic
equivalent of
junk mail.

51-Firewalls that filter requests from the Internet to a private network based on the IP
address of the computer sending or receiving those requests are called:
packet-filtering routers.

application-level proxies.

bastion gateways.

IP blockers.

52-All of the following are important security functions of proxy servers except:
They improve
network
performance.

They hide the IP addresses They help control


of a company's internal
outbound traffic to a
computers.
network.

They help control


inbound traffic to a
network.

53-The advantages of virtual private networks (VPN) for data communications include all
of the following except:
They can reduce
communication costs
dramatically because
VPN equipment is
cheaper than other
remote solutions.

They are less


expensive than
private leased lines
because they use the
public Internet to
carry information.

They ensure the


confidentiality and
integrity of the data
transmitted over the
Internet without
requiring encyption.

Remote users can use


broadband connections
rather than make long
distance calls to access
an organization's
private network.

54-A host-based intrusion detection system (IDS):


Resides on the server that is Consists of information
system resources
being monitored where it
can detect whether critical firewalls, routers, Web
or security-related files have servers, database
servers, and files that
been tampered with or
look like production
whether a user has
attempted to access files that systems, but do no real
he or she is not authorized to work.

Can perform certain


actions when an
attack occurs, such
as terminating
network connections
based on security
policies.

Uses rules to
analyze suspicious
activity at the
perimeter of a
network or at key
locations in the
network

use.

55-In the United States, which the federal laws place legal limits on monitoring activity?
The Wiretap
Act and
CFAA

The Wiretap Act and the


Pen Register, Trap, and
Trace Devices statute

The Computer Fraud and


Abuse Act (CFAA) and the
First Amendment.

The USA
PATRIOT Act
and CFAA

Chapter 12 Electronic Payment Systems


1-E-payment systems that require the payer to install specialized security software have
proven more likely to succeed.
True

False

2-The success of an e-payment method depends on its interoperability with existing


enterprise systems and applications.
True

False

3-To succeed, special e-payment methods, such as e-cash, have to maintain anonymity.
True

False

4-E-payment methods that can address the lower or higher end of the price continuum is
unlikely to be widely accepted because of cost and security issues.
True

False

5-Credit cards and charge cards are e payment instruments that allow the holder to make
purchases up to a fixed limit and charges interest each month on unpaid balances.
True

False

6-In the settlement process, the systems must determine whether a buyer's card is active
and whether the cardholder has sufficient funds available for the purchase.

True

False

7-With a debit card, the money for a purchased item comes directly out of the holder's
checking account with the actual transfer of funds from the holder's account to the
merchant's taking place within one to two days.
True

False

8-The processing of card payments has two major phases: identification and settlement.
True

False

9-In the authorization process, the systems determines whether a buyer's card is active and
the customer has sufficient available credit line or funds.
True

False

10-For a given type of payment card and processing system, the processes and participants
are essentially the same for off-line (card present) and online (card not present) purchases.
True

False

11-CyberSource and VeriSign are payment processing services that provide connectivity
among merchants, customers, and financial networks that enable authorization and
payments.
True

False

12-In the online world, merchants are not held liable for fraudulent transactions.
True

False

13-Recent surveys by CyberSource indicate that fraudulent card transactions are a


growing problem for online merchants in spite of their increasing efforts to combat fraud
despite improved anti-fraud measures.
True

False

14-Because of their visibility and large sales volumes, larger firms were more susceptible to
fraud than smaller firms were.
True

False

15-One problem with the Address Verification System (AVS) for fraud prevention is the
number of false positives, meaning that the merchant rejects a valid order. One reason for
these rejects is simply that cardholders make mistakes in inputting their addresses or zip
codes.
True

False

16-One impact of anti-fraud tools is that merchants are rejecting a significant number of
both valid and invalid orders due to suspicion of fraud.
True

False

17-With virtual credit cards, the issuer must create a new credit card number for every
purchase.
True

False

18-In most cases, smart cards are more secure than credit cards and can be extended with
other payment services. In the retail arena, many of these services are aimed at those
establishments where payments are usually made in cash and speed and convenience are
important.
True

False

19-Stored-value cards are being marketed heavily to the those who do not have credit cards
or do not have bank accounts, specifically people with low incomes, young adults, seniors,
immigrants, minorities, and others.
True

False

20-Regardless of the vendor's point of view, there is substantial evidence, at least in the
offline world, that consumers are not willing to use their credit or debit cards for
micropayments under $5 to minimize security risks.
True

False

21-E-checks rely on current business and banking practices and can be used by any sized
business that has a checking account, credit card, and debit card.
True

False

22-From the perspective of the billing firm, two advantages of e-billing are the reduction in
expenses related to billing and processing payments and the ability for advertising
customized to each individual customer.
True

False

23-EIPP is the process by which companies present invoices and make payments to one
another.
True

False

24-With letters of credit, credit risk is reduced because payment is accessed via the
creditworthiness of the issuing bank.
True

False

25-Research shows that state and local governments are losing more than $100 billion per
year in sales tax revenue on items purchased over the Internet.
True

False

26-Factors that come into play in determining whether a particular method of e-payment
achieves critical mass include all of the following EXCEPT:
the degree of
security of the
transfer.

interoperability with other


full traceability of hardware and software
enterprise systems and
independence.
the buyers.
applications

27-A card that draws the payment amount directly from the user's checking account is
called a(n):
e-payment card.

charge card

credit card.

debit card

28-A payment card that provides the holder with credit to make purchases up to a limit
fixed by the card company and charges relatively high interest rates on unpaid balances is
the:
e-payment card.

charge card.

debit card.

credit card.

29-The process of determining whether a card is active and whether the customer has
sufficient funds for the purchase is called:
settlement.

approval.

authorization.

procurement.

30-The transfer of money from the buyer's to the seller's account is called:
authorization.

approval.

procurement.

settlement.

31-________ offer Internet Merchant Accounts, which are special accounts for credit card
authorization and payment processing.
Payment processing services

Credit card associations

Issuing banks

Acquiring banks

32-________ are financial institutions that provides a customer with a payment card.
Acquiring banks

Payment processing services

Issuing banks

Credit card associations

33-________ provide connectivity among merchants, customers, and financial networks


enabling authorization and payments is called the:
Credit card associations

Payment processing services

Acquiring banks

34-________ are small online payments typically under US$10:

Issuing banks

E-smart payments

E-minipayments

E-micropayments

E-cash

35-An advantage of e-checks is that they:


operate outside the involve complex contain much more
fit current business
traditional banking internal processing information then
practices, and so require
industry.
systems.
traditional paper checks. little process reengineering.

36-The nationwide batch-oriented electronic funds transfer system that provides for
interbank clearing of electronic payments for participating financial institutions is called
the:
Automated
Clearinghouse
Network.

electronic bill presentment


and payment network.

Receiving Depository
Financial Institution

Federal
Reserve
System.

37-Each of the following are ways to pay bills over the Internet EXCEPT:
biller direct.

bill consolidator.

customer service provider.

online banking.

38-From the perspective of the billing firm, all of the following are advantages of e-billing
EXCEPT:
reduced processing
expense.

universal
availability.

opportunity for targeted


advertising.

improved customer
service.

39-From the perspective of the customer, all of the following are advantages of e-billing
EXCEPT:
greater security than other
types of payments.

simplifies and centralizes


payment processing.

makes record
keeping easier.

lower
costs.

40-Characteristics of B2B payments include all of the following EXCEPT:


They are more likely to
They are much
They are significantly
They require less
involve disputes that
larger than payments more complex than
rigor and security
require significant rework
payments by individuals.
than B2C payments. by individuals.
to resolve.

41-B2B payments are part of a much larger financial supply chain that includes all of the
following EXCEPT:
payment authorization.

contract administration.

procurement.

financial reporting.

42-In financial supply chain management, the goal is to optimize all of the following
EXCEPT:
accounts receivable

the physical supply chain

accounts payable

financial risks

43-Unlike the physical supply chain, ________ characterize the financial supply chains of
most companies.
greater accuracy

efficiencies

transparency

inefficiencies

44-The vast majority of B2B payments are:


electronic
payments.

made using electronic funds


transfer (EFT)

made with letters of still made by paper


credit.
check.

45-Barriers inhibiting B2B electronic payment include all of the following EXCEPT:
strict standard
formats for
remittance
information.

a lack of integration of inability of trading partners to send


a shortage
payment and
or receive electronic payments with
of IT staff.
accounting systems. sufficient remittance information.

46-The process by which companies present invoices and make payments to one another
through the Internet is known as:
enterprise invoice presentment online accounts
payable.
and payment.

electronic data
interchange.

online accounts
receivable.

47-For many firms, presentment and payment processes are all of the following EXCEPT:
costly.

time consuming.

error-prone.

secure.

48-According to a survey by Credit Research Foundation, the major reasons companies


turn to EIPP solutions are all of the following EXCEPT:
better customer service for
billing and remittance.

elimination of
billing disputes

improved data that can lower improved


invoice processing costs.
cash flow.

49-________ is an EIPP many-to-many model with a third party acting as an intermediary,


collecting or aggregating invoices from multiple sellers and payments from multiple buyers.
ACH network

Seller direct

Buyer direct

Consolidator

50-Among the forms of online B2B payments, ________ is second only to ACH in terms of
frequency of use.
letters of credit

purchasing cards

CTX

Fedwire, or wire transfer

51-All of the following are advantages of using purchase cards EXCEPT:


purchasing departments
report productivity gains.

bills are consolidated


into a single payment.

improved
control.

they are widely accepted in


international trade.

52-In global trade, a ________ is a written agreement by a bank to pay the seller, on
account of the buyer, a sum of money upon presentation of certain documents.
micropayment

letter of credit

bank check

trade card payment

53-All of the following are benefits of letters of credit (LCs) EXCEPT:


Payment is assured
if all the terms in the
LC are complied
with.

Credit risk is reduced because


payment is accessed via the
creditworthiness of the issuing
bank.

Political risk is reduced


LCs are cheap
if the LC is confirmed
and easy to
by a bank in the seller's
establish.
country.

54-The current Internet sales tax moratorium in the United States applies to:
all retail sales

all B2B

clothing, food, and

all sales made over the Internet if the

made over the


Internet.

sales
only.

pharmaceuticals only.

seller has no physical presence in the


state where the buyer lives.

55-Many B2C and B2B businesses rely on specialized third-party software and services to
calculate the taxes associated with a sale because:
of the
complexities.

they verify shipping


addresses.

tax laws rarely


change.

of government
regulations.

Chapter 13 Order Fulfillment


1-The implementation of most EC applications requires the use of support services.
True

False

2-Amazon.com initially operated as a totally virtual company, but had to add physical
warehouses with thousands of employees in order to expedite deliveries and reduce order
fulfillment costs.
True

False

3-Both EC and traditional retailing are based on the concept of "pull" operations that
begin with an order from a customer.
True

False

4-Order fulfillment involves activities such as providing customers with what they have
ordered, delivering orders on time, and providing all related customer services.
True

False

5-Front-office operations are the activities that support fulfillment of orders, such as
packing, delivery, accounting, and logistics.
True

False

6-Back-office operations are the operations involved in the efficient and effective flow and
storage of goods, services, and related information from point of origin to point of
consumption.
True

False

7-The EC order fulfillment process begins when an order is received and verified as being a
real order.
True

False

8-In B2C, customers usually validate that they will pay by prepaying using a credit card.
True

False

9-When a customer returns items that have been ordered, the series of activities involved in
that return are called return logistics.
True

False

10-The order fulfillment processes for B2B and B2C activities are similar.
True

False

11-The major difference between e-logistics and traditional logistics is that traditional
logistics deal with the movement of large amounts of materials to a few destinations. Elogistics shipments typically are small parcels sent to many customers' homes.
True

False

12-The inability to deliver products on time is a typical problem in both off-line and online
commerce.
True

False

13-The chance of supply chain problems, such as shipping the wrong items, is lower for EC
than for off-line commerce because of more advanced logistics support.

True

False

14-Supply chain problems, such as errors in demand forecasting, jeopardize order


fulfillment.
True

False

15-Many problems along the EC supply chain stem from two sources: uncertainties in
forecasting demand and the need to coordinate several activities, internal units, and
business partners.
True

False

16-Uncertainties in delivery time are a major cause of order fulfillment problems. RFID
can help by locating shipments in real time to minimize delays and enhance customer
service.
True

False

17-The B2C order-taking process can be improved when it is done via EDI, EDI/Internet,
the Internet, or an extranet.
True

False

18-B2C fulfillment may be more complex than that of B2B because it has at least six
dimensions of complexity rather than only two.
True

False

19-High delivery costs are justified only if there is a high concentration of orders from
customers located in close proximity or if the value of the order is large enough.
True

False

20-Delivery-value density is a decision support tool that helps determine whether it is


economical to deliver goods to a neighborhood area in one trip. The lower the density value,
the better.

True

False

21-According to researchers, culture, top management commitment, and technology


infrastructure lead to CRM success.
True

False

22-The integration of ERP and CRM must include low-level data synchronization as well
as business process integration so that the integrity of business roles can be maintained
across systems and workflow tasks can pass between the systems.
True

False

23-Benefits of CRM analytics lead to better customer relations in terms of sales and service,
better marketing strategies, lower inventory, and faster delivery. To derive these benefits, it
is necessary to properly collect and analyze relevant customer data.
True

False

24-The primary customer-facing applications that support eCRM are self-tracking, FAQs,
and self-configuration.
True

False

25-Data mining is an important analytic activity that involves sifting through an immense
amount of data to discover previously unknown patterns that can guide improvements in
order-fulfillment and CRM efforts.
True

False

26-The implementation of most EC applications requires the use of all of the following
support services EXCEPT:
infrastructure and technology security manufacturing order fulfillment, delivery, and payment

27-Most EC applications are based on ________ that begin with an order, frequently a
________ order.

pull operations;
standard

push operations;
customized

push operations;
standard

pull operations;
customized

28-All services related to making sure a customer gets what he/she ordered within an
acceptable amount of time is called:
logistics.

front-office operations.

order fulfillment.

back-office operations.

29-Packing, delivery, accounting and logistics are examples of:


logistics.

back-office operations.

front-office operations.

order fulfillment.

30-Customer-facing activities or ________ are activities, such as advertising and order


taking, that are visible to customers.
back-office operations

order fulfillment

logistics

front-office operations

31-The Council of Supply Chain Management Professionals defines ________ as "the


process of planning, implementing, and controlling the efficient and effective flow and
storage of goods, services, and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements."
front-office operations

back-office operations

order fulfillment

logistics

32-A typical EC fulfillment process involves all of the following activities EXCEPT:
Checking for in-stock
availability.

Just-in-time inventory
management.

Making sure the


customer will pay.

Replenishment and
returns.

33-The administrative activities of order taking and fulfillment involve all of the following
activities EXCEPT:
sales quote.

shipment release.

order acknowledgment.

accounts payable.

34-The major difference between e-logistics and traditional logistics is:


e-logistics deals with the

traditional logistics deals

traditional logistics

e-logistics

movement of large
with movement of large
amounts of materials to a amounts of materials to a
few destinations.
few destinations.

applies only to
manufacturers.

outsources all
logistics
functions.

35-The inability to deliver products on time is a typical problem:


in both off-line unique to eand e-commerce. commerce.

in traditional logistics only


because the problem has been
solved in e-commerce.

in global operations, but it is


rarely a problem in domestic
operations.

36-________ are a major source of uncertainty in supply chains.


Internal manufacturing
schedules

Demand
forecasts

Inventory delivery
schedules

Foreign currency
exchange rates

37-________ helps locate shipments in real time to minimize delays and enhance customer
service.
3PL

RFID

ERP

CRM

38-Solutions to problems in the supply chain for EC companies are:


critical during start-up but
usually unique generic across both
usually become manageable and
for each EC
EC and traditional
insignificant as EC companies
company.
companies.
mature.

so complex that most


EC companies cannot
afford to implement
them.

39-Improvements in EC order-taking:
may come from within the
are accomplished
are accomplished
organization, from
solely through
solely through
improved links with
implementing linkages improvements within logistics, and through
with payment systems. the organization.
linkages with payment
systems.

are accomplished
solely through
improved links with
logistics.

40-________ are useful in reducing inventory and decreasing the incidence of out-of-stocks.
Such systems also are useful in maintaining an inventory of repair items so repairs can be
expedited.
ERP
systems

Warehouse management
systems

Replenishment
systems

Stockkeeping unit
systems

41-Automated warehouses for B2C companies are designed:


to facilitate the delivery
of small quantities of
product to a very large
number of customers.

to facilitate the delivery


of large quantities of
product to a small
number of customers.

to accommodate much
larger inventory levels
than traditional
warehouses.

to help transition
B2C companies
into B2B
companies.

42-________ are intermediaries that prepare goods for shipping on air carriers, trucks, or
other transport means.
Outsourcers

Forwarders

Expediters

Shippers

43-All of the following apply to global logistics systems EXCEPT:


An increase in
global trading
created a need for
an effective global
logistic system.

The number of partners in such


situations is larger, which
increases the need for
coordination, communication,
and collaboration.

These systems are


secure when the
Internet is the
centric technology
platform.

Order fulfillment
problems tend to be
even larger in longer
supply chains that
cross country borders.

44-The second most often cited reason for customers not buying on the Web is:
not being able to see or try
the lack of a good
on a product before buying
return mechanism.
it.

concern that ordered


concerns
products won't be delivered
about fraud.
on time.

45-________ is an innovative order fulfillment strategy in which components for a product


come from two or more physical locations.
Leveraged shipments

Merge-in-transit

Order postponement

Rolling warehouse

46-A decision support tool that helps determine whether it is economical to deliver goods to
a neighborhood area in one trip is:
CRM model.

ERP model.

SCM analysis.

delivery-value density.

47-________ recognizes that ________ are the core of a business and that a company's
success depends on effectively managing its relationships with them
Supplier relationship
Customer relationship Vendor relationship Partner relationship
management; customers management; vendor management; partners management; suppliers

48-Major limitations of CRM include all of the following EXCEPT:


it is difficult to
it is difficult to support
it is difficult to
justify the
mobile employees with
develop competitive
expense of
some CRM applications.
CRM applications.
CRM.

it requires integration with a


company's other information
systems, which may be
difficult and expensive.

49-Metrics in customer service and CRM include all of the following EXCEPT:
site availability.

on-time order fulfillment.

product quality.

response time.

50-Data analytics are a valuable tool because it can provide all of the following EXCEPT:
what-if scenarios. financial reporting customer segmentation groupings. profitability analysis.

51-Medium and large corporations organize and store data in a central repository called
a(n) ________ so that it will be easy to analyze later on, when needed.
knowledge system

data base

expert system

data warehouse

52-Automating inquiry routing and answering queries requires ________ which can be
generated from historical data and from human expertise and stored for use whenever
needed.
knowledge

forecasts

analytics

information

53-To overcome the problem of finding buyers or sellers online, a company may use
________ such as B2Business.net or Yahoo! Small Business.
intelligent agents

search engines

directory services

industry-focused newsletters

54-TRUSTe, BBBOnline, and Ernst & Young's trust service are used both in B2C and B2B
for all of the following reasons EXCEPT:
One cannot touch the
seller's products.

Trust is critical Companies must outsource Buyers may not be


for EC.
known to sellers.
trust services.

55-The major reasons why many companies prefer to outsource some of the support
services include all of the following EXCEPT:
Lack of experience or
The desire to
resources needed for many of concentrate on the
the support services.
core business.

For a sustainable
competitive
advantage.

The need to have


services up and
running rapidly.

Chapter 14 E-Commerce Strategy and


Global EC
1-Strategies are based on performance indexes that are used as targets and measures of
success.
True

False

2-An organizational strategy is a detailed plan for how a business is going to accomplish its
mission, what its goals should be, and what plans and policies it will need to accomplish
these goals.
True

False

3-Any contemporary strategy-setting process must include the Internet.


True

False

4-In Porter's view, the majority of the Internet's impacts on the five competitive forces
have been positive.
True

False

5-Researchers have suggested that more extensive strategic information systems planning
in an uncertain environment produces greater planning success.
True

False

6-No matter how large or how small the organization, the strategic planning process forces
corporate executives, a company's general manager, or a small business owner to assess the
current position of the firm, where it should be, and how to get from here to there.
True

False

7-In the strategy initiation phase, the organization examines itself, its environment, and the
potential contribution that the Internet and other emerging technologies can make to the
business.
True

False

8-A value proposition is actually a financial statement that summarizes the annual revenue
and profit targets.
True

False

9-The two major and successful Internet-based businesses Google and eBay have similar
core competencies.
True

False

10-SWOT analysis is one method for scanning the business environment to collect and
interpret relevant information about direct competitors, indirect competitors, and potential
competitors.
True

False

11-In the strategy implementation phase, general long-term plans are developed for
carrying out the projects that had been agreed on in the strategy formulation phase.
True

False

12-Resource allocation refers to the processes of making the selected applications and
projects a reality, such as hiring staff; purchasing equipment; licensing, purchasing, or
writing software; and contracting vendors.
True

False

13-Strategy assessment is the continuous evaluation of progress toward the organization's


strategic goals, resulting in corrective action and, if necessary, strategy reformulation.
True

False

14-The basic method in scenario planning is that a group of analysts generates simulation
games for policy makers. The games combine projected factors about the future, such as
demographics, geography, and industrial information with plausible alternative social,
technical, economic, and political trends.
True

False

15-A business plan is a tool that is an alternative to narrowly focused financial assessments
by measuring organizational performance in four areas: finance, customers' assessments,
internal business processes, and learning and growth.
True

False

16-The primary reasons for writing a business plan are to acquire funding and
nonfinancial resources, to recruit senior management, and to force the business owner to
think ahead, set achievable goals, seek out and analyze competitors.
True

False

17-Entrepreneurs in start-up companies use business plans to get funding from investors,
such as a venture capitalist or a bank.

True

False

18-The information systems strategy is set primarily by determining what information and
associated information systems are required to carry out the business strategy.
True

False

19-In e-commerce, evidence shows that there is always a real advantage to being the first
mover in an industry or market segment.
True

False

20-The disadvantages a brick-and-mortar company faces by creating an independent


division are that it may be very costly, risky, or both.
True

False

21-Disposing of excess equipment was the motivation behind the implementation of


forward e-auctions at General Motors. This is an example of a technology-driven strategy
because GM had a specific problem that an EC application could solve.
True

False

22-In a click-and-mortar business, the allocation of resources between off-line and online
activities can create difficulties, especially in sell-side projects because the two activities
could be competitors.
True

False

23-Having a strong project champion on an e-commerce project is seldom important to the


success of the project because of inter-personal conflicts caused by a powerful champion.
True

False

24-The purpose of GlobalNetXchange, which was founded by major retailers such as Sears,
was to reduce procurement costs and product prices for its members while making the
purchase process more efficient.

False

True

25-At the implementation stage, firms may need to dramatically change business processes
to accommodate the changes an EC strategy brings. In those instances, business process
reengineering (BPR) is usually necessary.
False

True

26-For ________ companies, it may be even more important to change strategies quickly.
service

retail

traditional

pure play

27-Capabilities of the Internet that have made it more difficult for companies to capture
profits include all of the following EXCEPT:
The Internet reduces the
The Internet makes The Internet makes
difficulty of purchasing,
information widely it easier to make
marketing, and
available.
secure payments.
distribution.

The Internet allows buyers


and sellers to find and
transact business with one
another more easily.

28-Projections of the business technological, political, economic, and other environments


are called:
competitive intelligence

value propositions

SWOT analysis

forecasts.

29-The unique combination of resources, experiences, and expertise within a particular


firm is called their:
corporate strategy.

competitive advantage.

functional strategy.

core competencies.

30-All of the following are elements of a company's strategy EXCEPT:


forecasts.

day-to-day operations.

competitor analysis.

company analysis.

31-All of the following about the strategic planning process are true EXCEPT:
The process of

The strategic

The strategic planning process

The strategic

developing a
strategy maybe
even more
important than the
strategy.

planning process forces corporate executives, a


is cyclical and
company's general manager, or a
continuous.
small business owner to assess the
current position of the firm, where it
should be, and how to achieve
objectives.

planning process
begins with
strategy
formulation.

32-A specific outcome of the strategy initiation phase is the ________, which includes the
vision, mission, value proposition, goals, capabilities, constraints, strengths, and
weaknesses of the company
functional strategy

core competency

company analysis

value proposition

33-A specific outcome of the strategy initiation phase is a clear statement of the company's
________, which summarizes the customer segment, competitor target, and the core
differentiation of one's product from the offerings of competitors.
functional strategy

core competency

value proposition

company analysis

34-Google's ________ is its expertise in information search technology.


company analysis

core competency

functional strategy

value proposition

35-Many of the outcomes from the first two phases of the strategic planning process, such
as a determination of goals, competitor analysis, strategic opportunities, and risk analysis
come together in a ________.
SWOT plan

technology audit

value proposition

business plan

36-________ is the process of making the selected applications and projects a reality by
hiring staff; purchasing equipment; licensing, purchasing, or writing software; and
contracting vendors.
Strategy assessment

Project management

Resource allocation

Project planning

37-An analytical tool in which a company looks for points of differentiation between
competitors and itself is called:

strategy assessment

competitor analysis grid

scenario planning

SWOT analysis

38-________ is the continuous evaluation of progress toward the organization's strategic


goals, resulting in corrective action and, if necessary, strategy reformulation.
Strategy assessment

Competitor analysis grid

Scenario planning

SWOT analysis

39-A management tool that assesses organizational progress toward strategic goals by
measuring performance in a number of different area is:
SWOT analysis.

balanced scorecard.

Web analytics.

BCG growth-share matrix.

40-After four years in business, a magazine publisher decides to add the online distribution
of its magazine to its existing traditional publishing business. The company would need to
develop a:
business case.

business strategy.

business plan.

business metric.

41-All of the following are situations when a business plan should be done EXCEPT:
When an existing
company is planning
to create a separate
division.

When an existing
business is
deploying a CRM
system.

When an existing
company is planning to
launch the company in a
new direction.

When a new business


is seeking start-up
funds and other
resources.

42-Which of the following about business plans and business cases is NOT correct?
One difference is that the business
plan concentrates on the viability of a
company, whereas a business case
assesses both viability of the project
and the fit of the initiative with the
firm's mission and goals.

The audiences are


the same senior
management and the
board or directors.

The content of
a business case
is similar to
that of a
business plan.

The purposes are


the same to
justify a specific
investment of
funds.

43-The risks of being a first mover include all of the following EXCEPT:
the risk that the high cost of
pioneering EC
the move

over the long run first


movers are substantially

the chance that a second wave of


competitors will eliminate a first

will be too
late.

initiatives.

less profitable than


followers.

mover's lead through lower cost


and innovation.

44-Factors that determine whether a first mover succeeds or fails in the EC marketplace
include all of the following EXCEPT:
the nature of the
product.

whether the company can be the


best in the market.

the size of the


opportunity.

the speed of
market entry.

45-The most efficient way to expand an organization's scope is:


by expanding the
firm's appeal to a
new set of
customers.

to introduce new products or


by increasing the
services into new or existing
size or scale of
markets without increasing
the business.
production facilities or staff.

to buy a company with


complementary
products or services.

46-Separating a company's online operations into a new company makes sense in each of
the following situations EXCEPT:
when the subsidiary can
be created without
dependence on current
operations and legacy
systems.

when the company is


unable to form new
alliances, attract new
talent, or raise
additional funding.

when a new business


model needs to be
when the volume
developed apart from the of anticipated econstraints of current
business is large.
operation.

47-Rite Aid, a click-and mortar firm, enhanced its EC future by:


Creating a separate
company.

Creating an online Forming a joint


brand.
venture.

Buying an equity stake in a


existing EC company.

48-Incorrect approaches to EC strategy selection include all of the following EXCEPT:


indiscriminately funding many "trend-surfing," or following betting it all in a using a lateprojects and hoping for a few the crowd to the newest and single, high-stakes mover
winners.
most fashionable idea.
initiative.
strategy.

49-The most dangerous risk to a company engaged in e-commerce is:

customer and business partner


risk.

threat posed by hackers. negligent loss of data. business risk.

50-All of the following determine the degree of collaboration between off-line and online
activities in a business EXCEPT:
the pricing
strategy.

the use of innovative processes


that support collaboration.

the ability of top management to corporate


introduce change properly.
culture.

51-The ________ pricing strategy means adding up all the costs involved, such as material,
labor, rent, overhead, and so forth, and adding a percentage mark-up as profit.
cost-plus

revenue markup

price percentage

competitor model

52-Internet technologies can provide consumers with easier access to pricing information,
which increases their bargaining power. To remain competitive and profitable, sellers need
smarter pricing strategies, which include all of the following strategies EXCEPT:
greater precision in more adaptability in
setting prices.
changing prices.

reducing
prices.

new ways of customer segmentation


for differentiated pricing.

53-Implementing EC often requires significant investments in infrastructure. Therefore, a


good way to start is to undertake ________.
a multi-divisional EC a large, non-trivial EC one or a few small EC
project
project
pilot projects

a single division EC
project

54-A ________ is a form of business alliance composed of several business partners that
share the costs and resources for the development or production of a product or service.
supply chain

temporary corporation

co-opetition

virtual corporation

55-The most important objectives of strategic assessment are all of the following EXCEPT:
Determine if the EC
strategy and projects are
still viable in the current
environment.

Measure the extent to


which the EC strategy and
ensuing projects are
delivering what they were

Reassess the initial


strategy in order to
learn from mistakes
and improve future

Identify what
competitors are
doing to avoid headon competition.

supposed to deliver.

planning

Chapter 15
1-From 1995 through 2000, many EC projects and start-up companies were funded with
little analysis of their business viability or finances.
True

False

2-The result of the rush to invest in EC projects and start-up companies was the 2001
2003 "dot-com bust," when hundreds of EC startups went out of business and the stock
market crashed.
True

False

3-After the dot-com bust, most IT executives acquired the knowledge and tools to do ROI
calculations on proposed EC investments.
True

False

4-One reason why EC justification is needed is that companies now realize that EC is not
necessarily the solution to all problems.
True

False

5-According to a CIO Insight report, EC justification decreases the credibility of EC


projects.
True

False

6-One basic way to categorize different EC investments is to distinguish between


investment in infrastructure and investment in specific EC applications.
True

False

7-Infrastructure investments are made for the short-term because of frequent technological
changes.
True

False

8-Cost-benefit analysis is frequently assessed by return on investment (ROI), which is also


the name of a specific method for evaluating investments.
True

False

9-All EC investments need to be formally justified to insure that they align with the
company's competitive strategy.
True

False

10-Metrics are used to describe costs, benefits, or the ratio between them and need to be
defined properly with a clear way to measure them.
True

False

11-Key performance indicators (KPI) are used to qualitatively track critical metrics or
success factors.
True

False

12-A major difficulty in justifying EC projects is that many costs and benefits are
intangible and therefore very difficult to measure.
True

False

13-Creating a competitive advantage, providing a benefit to society, and improving the


company's image are examples of tangible benefits that might be realized from an EC
project.
True

False

14-Cannibalization occurs when a new EC initiative produces substantial online sales, but
traditional sales fall such that no increase in total revenue occurs.
True

False

15-The results of any investment justification in eCRM depend on the time frame used to
measure changes in productivity.
True

False

16-Because many EC investments in eCRM take five to six years to show significant
positive results, real productivity gains often do not get measured correctly.
True

False

17-In preparing the business case for EC investment, managers should examine the
potential additional revenues that are expressed in the revenue models, such as increased
revenues via products or services from a larger global market because of more effective
product marketing on the Web.
True

False

18-The ROI method uses a formula that divides net revenues by the initial cost. The result
is a ratio that measures the ROI for each year or for an entire period.
True

False

19-In an NPV analysis, analysts convert future values of benefits to their present-value
equivalents by discounting future cash flows at the risk-free rate set by the Federal Reserve
Bank.
True

False

20-Given the diversity of activities involved in e-procurement, the metrics used to measure
the value of e-procurement must reflect how well each process is accomplished; and take
into consideration whether the company is a buyer or seller.
True

False

21-According to recent surveys of eCRM applications, there are been mixed payoffs, but a
majority of companies have demonstrated a significantly positive ROI for their eCRM
investments.
True

False

22-Large companies often have several integrated intranet and other information systems
that determine the success of a Web portal. Thus, the justification for a Web portal must
focus on both business ROI and technology ROI.
False

True

23-To comply with the Sarbanes-Oxley Act, public companies must document every
internal process and external effect that will have an impact on their financial health,
which provide a robust foundation from which to develop a budget.
True

False

24-Critical elements that can affect the value of EC across cultures are perceived trust,
consumer loyalty, regulation, political influences, and even the content of online ads.
False

True

25-Developing economies often face power blackouts, unreliable telecommunications


infrastructure, undependable delivery mechanisms, and a relatively few customers who
own computers and credit cards. These limitations can be overcome when predicting EC
investment payoffs by using a combination of break-even analysis and NPV.
True

False

26-CIOs need to effectively communicate the value of proposed EC projects in order to


gain approval for all of the following reasons EXCEPT:
Some large companies,
and many public
organizations, mandate a
formal evaluation of

Companies now
realize that EC is
not necessarily the
solution to all

Demand for expanding


or initiating e-business
projects is no longer
strong so there are

The success of EC
projects may be
assessed in order to
pay bonuses to those

requests for funding.

problems.

involved with the


project.

fewer requests for


funding.

27-One basic way to categorize different EC investments is to distinguish between


investments in infrastructure and investment in specific EC applications because benefits
from infrastructure investments:
have a low
return.

are made for the longterm.

depend on the EC
applications.

are very
complex.

28-The basic reasons that companies invest in IT and EC are all of the following EXCEPT:
to increase customer
satisfaction and retention.

to improve business to reduce timeprocesses.


to-market.

to justify new marketing


campaigns.

29-Not all EC investments need to be formally justified. All of the following are cases where
formal evaluation may not be needed EXCEPT:
When the value of the
investment is relatively
small for the
organization.

When the EC project is


mandated and must be
done regardless of the
costs and benefits.

When the relevant data


When competitors
are not available, are
have made that
inaccurate, or are too
type of investment.
volatile.

30-Metrics are used to describe all of the following EXCEPT:


standards.

the ratio of costs to benefits.

costs.

benefits.

31-Productivity benefits from using EC are difficult to measure because:


EC gains in certain areas of the
there is no time qualitative benefits
company may be offset by losses in
lag in EC gains. do not count.
other areas.

the payoffs are


too short.

32-The relationship between EC investment and organizational performance is:


shared with other investments.

direct.

not measurable.

indirect.

33-EC costs and benefits can be classified into two broad categories:
short-term and capital. tangible and intangible. direct and routine. operational and strategic.

34-The New York Metropolitan Transit Authority (MTA) did not need to open another
airport for almost two decades, even though air traffic had tripled because of productivity
gains derived from improved IT systems. IT systems added by the MTA played critical
roles in ticket reservations, passenger and luggage check-in, crew assignment and
scheduling, runway maintenance and management, and gate assignments. This case
illustrates that:
Tangible benefits can Tangible costs can be Intangible benefits
be complex, yet
high, yet payoffs can be can be complex, yet
substantial.
achieved quickly.
substantial.

Intangible costs can be


high, yet payoffs can be
achieved quickly.

35-An important category of intangible benefits is ________ factors that include comfort to
employees, impact on the physical environment, changes to the power distribution in an
organization, and preventing invasion of the privacy of employees and customers.
ecosystem

transactional

social subsystem

net-enhanced

36-In B2C, an example of a tangible EC metric from the buyer's perspective is:
ease of use of EC. profit per customer. cost/price of the product. convenience in purchasing

37-For Governments, an example of an intangible EC metric is:


lower tax
rates.

increase in participation in government


programs.

risk
reduction.

reelection of
candidates.

38-The major steps in the process of justifying large-scale EC and IT projects include all of
the following EXCEPT:
Lay an appropriate
foundation for analysis
with your vendor, and
then conduct your ROI.

Be careful not to overDocument and verify all


estimate cost and underfigures used in the
estimate benefits (a
calculation. Clarify all
tendency of many
assumptions.
managers).

Do not leave out


strategic benefits,
including longterm ones.

39-Types of costs and cost issues that need to be considered in justifying EC investments
include all of the following EXCEPT:
initial upfront costs. the allocation of indirect costs. opportunity costs. system operating costs.

40-Traditional methods for evaluating EC investments include all of the following


EXCEPT:
Discount rate

ROI

NPV

Break-even or payback period

41-Dan Welch, who owns three World Cup Coffee shops in Portland, Oregon, estimates
that his free Wi-Fi network has added 10 percent to his overall revenue. Welch credits WiFi consumers with spending three times as much on food compared with the average
consumer. This is an example of:
technology ROI.

business ROI.

technology IRR.

business NPV.

42-Pouilly's Poodle Shop wants to produce monthly cash flows from its Internet DoggieCam investment. The most appropriate method for assessing this investment is:
Break-even analysis.

Total cost of ownership.

Internal rate of return (IRR).

Payoff.

43-By calculating the difference between TCO and TBO, one can compute the ________ of
an IT investment.
Internal rate of return (IRR)

Total cost of ownership

Payoff Break-even analysis

44-The disadvantage of the NPV method for evaluating EC and IT is:


it may be difficult to
the true benefits
classify outlays as expenses are difficult to
or investments.
measure.

it is difficult to compare it assumes


projects of unequal lifes reinvestment at the
same rate.
pans or sizes

45-The following direct metrics indicate progress in e-procurement EXCEPT:


increased order
fulfillment rate.

decreased number of rejects


received from suppliers.

increased on-time
deliveries.

reduced
inventory costs.

46-Justifying information security projects:


should focus on
defending against
external threats such
as hackers and
malware.

is not needed because it is wellknown that preventing network


security problems is less labor
intensive than cleaning up virus
infections.

is not done
should be done
because ROI
because employee
calculators are not security training is
available.
usually poorly done.

47-The average-cost curve (AVC) of physical products and digital products:


are different because the AVC of
digital products declines as quantity are both are both
Uincreases forming a L-shape, while Lthe AVC of physical products is U- shaped. shaped.
shaped.

are different because the AVC of


physical products declines as
quantity increases forming a Lshape, while the AVC of digital
products is U-shaped.

48-When computing agency cost, companies should consider:


only production-related ignore productionrelated costs and
costs and ignore
transaction costs.
transaction costs.

only transaction costs both productionand ignore production- related costs and
related costs.
transaction costs.

49-Transaction costs include all of the following EXCEPT:


Search costs
incurred by buyers
and sellers in
locating each other
and specific
products and
services.

Negotiation costs result from


Production
meetings, communicationcosts incurred
related expenses, exchanges of
for labor and
technical data or brochures,
overhead.
entertainment, and legal costs.

Monitoring costs incurred


when buyers and sellers
make sure that the
exchange proceeds
according to the terms
under which the sale was
made.

50-McAfee allows users of its VirusScan virus-detection software to automatically update


the latest security patches online. This is an example of ________ to attract customers who
value this automatic update.
product or service differentiation.

core competency.

competitive advantage.

agility.

51-A Web-based seller of CDs carefully monitors the prices charged by its competitors for
identical products. This company has the ability to change a given price within three
minutes in response to changes by competitors. This is an example of EC:
competitive advantage.

agility. core competency.

product or service differentiation.

52-All of the following are critical success factors (CSFs) of the Old Economy EXCEPT:
Create new partnerships, stay
with core competency.

Deliver highvalue products.

Build market share to get Compete to sell


economies of scale.
product.

53-As a company moves to incorporate an online presence with its traditional brick-andmortar operation, it adds the costs related to training for all personnel in the capabilities of
the EC system and a new advertising campaign to announce its new site to the costs directly
associated with building the new Web presence. In this case, training and advertising are
examples of:
direct costs.

transaction costs.

indirect costs.

complementary investments.

54-One of the strengths of EC is the ease with which its adopters can reach a global
population of consumers. However, EC-driven businesses must consider the critical
elements affecting the value of EC across cultures. Those elements include all of the
following EXCEPT:
perceived trust.

delivery delays.

political influences.

consumer loyalty.

55-All of the following apply to EC in developing economies EXCEPT:


The potential volume of
transactions in developed
countries can make EC
investments more attractive
for established firms than
new firms because
established firms have
already recovered the costs
of their IT infrastructures.

Developing
economies struggle
with various issues
that create too
many business and
technology risks to
justify investment
in those economies
at this time.

Developing economies
often face power
blackouts and unreliable
infrastructure and
delivery mechanisms
creating limitations that
make it difficult for firms
to predict whether EC
investments will pay off,
and when.

Developing
economies, such as
China and India,
represent a
significant
opportunity for EC
to connect
businesses to
customers, as well
as other businesses.

Chpater 16
1-Unlike the brick-and-mortar marketplace, the failure rate for online companies is low.
True

False

2-Online businesses may be pure play companies or click-and-mortar companies that add
online projects, such as e-procurement or selling online, as additional marketing channels.
True

False

3-To create successful entrepreneurial ventures in EC, Maier suggests that starting small
with many founders is the best option.
True

False

4-The first step is creating a new company is to identify a consumer or business need in the
marketplace and an innovation to address that need.
True

False

5-Many good ideas and realistic initiatives have failed because of poor execution due to the
lack of sufficient business skills by the owners or principals of the business.
True

False

6-As a general guideline, although virtually anything is available for sale on the Internet,
the degree of sales success is somewhat dependent on the type of item or service being
offered for sale and how it can be delivered.
True

False

7-Medium and large businesses, or those seeking external funding, must have an informal
business plan.
True

False

8-The primary reason an entrepreneur writes a business plan is to acquire funding from a
bank, an angel investor, a venture capitalist, or the financial markets.
True

False

9-Some entrepreneur may simply invest personal funds from savings, personal lines of
credit, or a house mortgage since these sources of "bootstrap funding" are typically enough.
True

False

10-When the entrepreneur's personal funds are insufficient, the entrepreneur will go to
friends, family members, or to financial institutions.
True

False

11-An important source of financial support or direct funding, for pre-VC firms is an
incubator.
True

False

12-Venture capitalists tend to invest in companies that have identified what seems to be an
outstanding business opportunity, have taken some action to make the opportunity happen,
such as written a new software application or secured a patent , and need an infusion of
funds and management expertise to expand and launch the business.
True

False

13-There is a serious downside for start-up businesses that acquire venture capital because
they lose control over the business.
True

False

14-Once the company is well known and successful, it can go to a stock exchange to raise
money via an initial public offer or IPO.
True

False

15-Organizational transformation is a comprehensive concept that implies not only a major


change, but also a sharp break from the past.
True

False

16-Business process management (BPM) systems monitor the execution of the business
processes so that managers can analyze and change processes in response to data, rather
than on just a hunch.
True

False

17-Transforming an existing business to an e-business means a manager must change


business processes, but not the way people work or communicate.
True

False

18-An informational Web site provides opportunities for the customers and the business to
communicate and share information.
True

False

19-Selecting a domain name is an important marketing and branding consideration for a


business because it will be the business's online address and create an identity for the
business.
True

False

20-Up-to-the-minute dynamic content is what attracts new and returning customers


("eyeballs") and makes them stay longer ("stickiness"), which builds customer loyalty.
True

False

21-Because podcasts are audio-based media files, it enables companies to deliver audiospecific content, including music, speeches, radio-style presentations, and more.
True

False

22-Amazon.com offers personalize content by tracking visitors' behavior via cookies, which
is used to generate dynamic Web pages that recommend products based on previous
purchases and recently viewed items. Amazon.com offers this personalized content because
it is very inexpensive and does not impact performance.
True

False

23-Web designers execute successful site navigation through consistency and through
navigation aids such as a navigation bar, a navigation column, a site map, and search tools.
False

True

24-Web site usability means that people who use the Web site can do so quickly and easily
to accomplish their tasks and may also consider such factors as cost-effectiveness and
usefulness.
False

True

25-Card-not-present (CNP) transactions increase the risk and uncertainty of online


transactions, which increases transaction fees to offset the increased risks.
False

True

26-When creating a new business, the first step is to:


acquire financing needed
to make the business
successful.

investigate all
existing
opportunities.

identify a consumer or
business need that isn't
presently being met.

write a
business case
or plan.

27-The principle reason for writing a business plan is to:


provide strategic
direction to
employees.

acquire
external
funding.

provide an operational
framework for the
business.

help the founders remember


what they are trying to
accomplish.

28-The key difference between an e-business plan and a traditional business plan is that the
entrepreneur must:

develop a
ten-year
plan.

understand all aspects of


understand that traditional
the technology required to rules do not apply when doing
implement the plan.
business on the Internet.

understand that the


Internet is a unique
sales channel.

29-The difference between a business plan and a business case is:


all new businesses should have a
a business case
business plan, but only existing
is a part of
businesses planning a major EC
every business
or IT initiative should develop a
plan.
business case.

business cases are


all businesses need a
brief and general,
business case, but only
while business plans
new businesses need a
are long and
business plan.
detailed.

30-A(n) ________ is a wealthy individual who contributes personal funds and possibly
expertise at the earliest stage of business development.
incubator

venture capitalist

angel

entrepreneur

31-A(n) ________ is a company, university, or nonprofit organization that supports


promising businesses in their initial stages of development.
incubator

angel

entrepreneur

venture capitalist

32-________ is money invested in a business by an individual or a group of individuals in


exchange for equity in the business.
start-up funding

operating capital

venture capital

advance funding

33-The greatest difficulty in dealing with venture capital is:


finding the money a
venture capitalist will
require.

finding a willing
venture capitalist.

the loss of control a


venture capitalist
demands.

relocating the
business to an
incubator.

34-The relationship between stock price and when an investor invests is:
the entrepreneur will pay the venture capitalist
IPO investors will
will pay the highest
pay the highest price the highest price per
share
price per share.
per share.

the angel investor will


pay the highest price
per share

35-Chaplin's Pet Store has been in business for many years. Chaplin, the present owner,
decides to open an online sales channel where he can advertise and sell the same gourmet
pet food. This is an example of adding:
a portal.

e-procurement.

a storefront.

a reverse auction

36-Reprise Electronics, a conglomerate that manufactures and sells all kinds of electronic
goods under several brand names, currently has separate Web sites for each of its brands.
The company decides to bring all of the Web sites together through a single site that, in
addition to providing links to the brand pages, will also provide general information about
how to select electronic merchandise and informational pages about the Reprise company
today and its management team. This is an example of adding:
a reverse auction.

e-procurement.

a portal.

a storefront.

37-In an organizational transformation:


there is a change in
the change may affect
outlook, but rarely a
only one or a few of
change in procedures or
the functional areas
investment in
of the business.
infrastructure.

there is always a sharp


there are incremental
break with the past and
changes to the ways
every aspect of the
things have always
business will probably
been done.
change.

38-A(n) ________ Web site does little more than provide information about the business
and its products.
dynamic

informational

transactional

interactive

39-A major entertaining company has four studios that have been in the same location for
more than ten years. The company includes a page on its Web site with addresses, phone
numbers, and general e-mail addresses for each of these studios. None of this information
has changed since the Web site was developed. This is an example of ________ content.
dynamic

organizational

functional

40-Secondary content that offers a coupon, rebate, or special service is called:

static

cross-selling.

up selling.

comment.

promotion.

41-Reviews, testimonials, expert advice, or further explanation about the product are
called:
comment.

promotion.

up selling.

cross-selling.

42-The ________ is how Web pages are organized, labeled, and navigated to support
browsing and searching.
Web design

Web site map

information architecture

Web layout

43-Creating content that offers upgraded or more expensive versions of the product is
called:
comment.

promotion.

cross-selling.

up selling.

44-One of the first decisions to be made in building a Web site is:


whether to provide personalized who will
content
host it.

the domain
name

how to protect the Web site from


hackers

45-A(n) ________ is an exact duplicate of the original Web site physically located on a Web
server on another continent.
backup site

a download site

mirror site

a hot site

46-The Web hosting option under which the business acquires the hardware, software,
staff, and dedicated telecommunications services needed to host a Web site is called:
mirror hosting

self-hosting.

using a storebuilder.

ISP hosting.

47-The ________ is the name-based address that identifies an Internet-connected server.


URL name

host name

domain name

IP address

48-Content not available anywhere else on the Web is called:


restricted content.

reserved content.

commodity content.

premium content.

49-The concept of consistency in Web site design includes:


making sure the
messages sent to
customers who contact
the company are
consistent.

making sure customers


are treated consistently
when they contact
customer service.

making sure Web


pages look the same
no matter which
browser a customer is
using.

making sure all


visitors consistently
find what they are
looking for.

50-All of the following are advantages of building Web sites internally EXCEPT:
it allows the
company to use inhouse expertise.

it provides the
fastest speed to
market.

it allows the company to it allows the company to exert


protect proprietary
greater control on the process
technology.
and the resulting site.

51-Banks are more selective about who gets an account for accepting credit cards online
because
online transactions do
not produce much
revenue for banks

dot com failures have made


banks less willing to work
with online companies.

fees are higher


for online
processing

CNP transactions
are less secure and
riskier.

52-In addition to providing an easy mechanism for buying books, the Amazon.com Web
site is easily searchable by book title and author. It also has book reviews and suggests titles
based on previous purchase activity. These enhancements make the Amazon site a favorite
for readers. This is an example of:
internal Web site promotion

search engine optimization

using a meta tag.

53-________ offers one of the most popular storefront packages at with three levels of
merchant solutions: starter, standard, and professional.
Google

eBay

Yahoo!

Amazon.com

54-Options for acquiring storefronts include all of the following EXCEPT:

CNP

Build from
scratch.

Build them from


components

Build from templates or


storebuilders.

Join a
mall.

55-Before choosing the appropriate Web site development option, you need to consider all
of the following issues in order to generate a list of requirements and capabilities EXCEPT:
Can customers
What might be the
place orders
reaction of competitors?
online?

What kinds of products or


Who are the target
services will the business sell
customers?
online?

Chapter 17
1-For many e-businesses, a majority of their customer online traffic comes from search
engines.
True

False

2-All marketing methods used to increase the ranking of a company's Web site in the
search results are ethical.
True

False

3-Companies use search engine marketing (SEM) methods to increase their chance of
"getting found" among competing Web sites.
True

False

4-The volume of e-mail spam has decreased because of the widespread use and
effectiveness of antispam software and ISP spam filters.
True

False

5-Spam sent to blogs, cellular phones, or other types of messaging media to promote
products or services is called media spam.
True

False

6-Web pages that have been created to trick search engines into offering poor-quality
results are referred to as search engine spam.
True

False

7-Acts or activities that are unethical are also illegal.


True

False

8-Creations of the mind, such as inventions, literary and artistic works, and symbols,
names, images, and designs, used in commerce are known as private property.
True

False

9-Questions or disputes about the legality of spam can be resolved easily by referring to
relevant laws.
True

False

10-Legal precedents are decisions by judges that may be used as standards in similar legal
cases that follow.
True

False

11-Political spam, regardless of its content, is legal in the United States because it is a form
of speech protected by the Constitution.
True

False

12-Significant changes in the nature of business or crimes lead to new laws because laws
must remain responsive to new threats or abuses.
True

False

13-Due process is a legal claim that others not interfere with a protected interest, such as
privacy, intellectual property, or free speech.

True

False

14-Because of intellectual property law, the recording industry can file lawsuits for
copyright infringement against YouTube or MySpace if it profits from the recording
industry's property without authorization and compensation.
True

False

15-A company can be sued for libel if its EC site contains a defamatory or untrue statement
that causes damage to a person or another company.
True

False

16-A corporate code of ethics should specify whether the company allows employees to set
up their own Web pages on the company intranet and the rules for private e-mail usage
during working hours.
True

False

17-EC web site content needs to be reviewed by attorneys with cyber law expertise to
ensure that there nothing is unethical or illegal and that all required statements and
disclaimers are properly included.
True

False

18-Ethical principles that apply to the collection and use of personal information, such as
notifying customers of information practices before collecting it, do not apply to
information collected in e-commerce.
True

False

19-As a defense against abusive trackback tactics by profit-motivated spammers,


trackback spam filters are implemented in blog publishing systems.
True

False

20-Blocking tools cannot stop adware or software that gets bundled with other popular
applications, such as Kazaa, from delivering pop-up ads because they originate from the
desktop, and not the browser.
False

True

21-Unlike hate sites that can cause problems for corporations or lead to lawsuits, fan sites
are beneficial and welcomed by the entertainment industry.
True

False

22-Online merchants reject about 10 percent of incoming orders because of suspicions of


fraud; and about 3% of accepted orders turn out to be fraudulent.
True

False

23-Electronic signatures improve EC by helping to distinguish between legitimate and


fraud transactions and build trust and predictability needed by parties doing business
online.
False

True

24-Several public organizations and private companies attempt to protect consumers and
build users' trust and confidence in the Internet through a seal of quality, such as
Trustmark and BBBOnline.
False

True

25-Online sellers can better protect themselves against fraud by requiring customers whose
billing address is different from the shipping address to call their bank and have the
alternate address added to their bank account.
False

True

26-Approximately what percent of Internet shoppers use search engines to find products
and services?
75%

50%

10%

25%

27-Sending spam that disguises a sales pitch to look like a personal e-mail so that it will
bypass e-mail spam filters violates the:
Controlling the Assault of
NonSolicited Pornography and
Marketing (CAN-SPAM) Act.

Computer Fraud
and Abuse Act
(CFAA)

Children's Internet
Protection Act
(CIPA)

First
Amendment

28-To defend against unethical and illegal business tactics that exploit EC operations,
Google, MSN Search, and Yahoo have turned to all of the following aggressive measures
except:
Banned
violators'
sites.

Built algorithms that check for and


penalize deceptive rank-boosting
practices.

Implemented spam site Implemented


reporting systems.
honeypots.

29-Having control over the collection, storage, and dissemination of personal information is
included in the category of:
duties

rights

property

privacy

30-A decision by a judge that may be used as a standard in similar cases that follow is
referred to as:
legal precedent

common law

intellectual property

tort

31-Critics of political spam are against its use because they believe that:
it increases candidates'
all spam is a nuisance, clogs mail
dependence on wealthy
servers, and creates security risks
fundraisers,

it is
illegal

it leads to political
favoritism

32-Due process is
a legal obligation not
to interfere with a
protected interest

a guarantee of basic
fairness and fair
procedures in legal
action.

a legal claim that others a set of enforceable


not interfere with a
rules and
protected interest.
regulations.

33-A duty is
a guarantee of basic
a legal obligation not to a legal claim that others
fairness and fair
not interfere with a
interfere with a
procedures in legal
protected interest.
protected interest
action.

a set of enforceable
rules and
regulations.

34-Property rights relevant to e-commerce include all of the following EXCEPT:


The right to benefit,
The right to bring
criminal charges against a transfer, or sell the
property.
violator.

The right to exclude


others from the
property.

Control of the use


of the property.

35-A music company can file a ________ against YouTube and MySpace for any
interference with the ability to profit from its IP or for profiting from the recording
industry's property without authorization and compensation
lawsuit or civil charge

nuisance charge

negligence charge

criminal charge

36-________ enable an organization that has suffered a loss due to spammers to bring a
lawsuit against spammers responsible for the loss.
Civil laws

CFAA

Common laws

Criminal laws

37-Intellectual property law is the area of law that is associated with each of the following
EXCEPT:
visual and
performing arts.

electronic databases,
advertising, and video
games.

patent law, copyright law,


trademark law, and trade secret
law.

business
contracts

38-Which of the following is true about copyrights?


The entertainment
industry, led primarily by
the Motion Picture
Association of America

The Recording Industry


Association of America
(RIAA) uses lawsuits
against universities, but

In the United States,


after work is created
and in a tangible
form such as through

Copyright
protection on
artistic property
such as a movie or

(MPAA) and RIAA, is


trying technical solutions
via the legal system to
protect its interests.

not students, to stamp


out rampant music
piracy on university
campuses.

writing or recording,
the author can apply
for a federal
copyright.

music lasts forever,


even after the
death of the author
or creator.

39-Each of the following statements about digital rights management (DRM) is true
EXCEPT:
DRM are
technologybased protection
measures.

DRM is an umbrella term for


DRM technologies
any arrangement that allows a
were developed with
vendor of content in electronic
strict regard for
form to control the material and
privacy protection.
restrict its usage.

Typically, the content


is a copyrighted
digital work to which
the vendor holds right.

40-Fair use means


that a copyright
holder has
exclusive rights to
the invention for a
fixed number of
years.

that copyrighted material


can be used for
noncommercial purposes
without paying royalties or
getting permission.

that the author or creator


that copyrighted of a book, movie, or
material can be
musical composition can
digitally protected use their creations for an
against misuse.
unlimited number of
years.

41-Which of the following is true about the scope of business ethics?


The scope of
business ethics
has not changed
even though laws
have expanded.

The scope of business ethics has


expanded to encompass the nature
and quality of the relationships
with shareholders, customers,
business partners, suppliers, the
community, environment, and
future generations.

The scope of
business ethics
has not changed
because laws
have not
changed.

The scope of business


ethics has been limited
to company's actions
with regard to how it
treats employees and
obeys laws.

42-An Internet acceptable use policy (AUP) is an important safeguard because:


without a formal AUP, it is much more
difficult to enforce acceptable behaviors
and eliminate unacceptable behaviors,
and punish violators.

employees may be using


it includes a
it required
company e-mail to
corporate code by the
advertise their own
of ethics.
FTC.
businesses.

43-Section 5 of the FTC Act does each of the following EXCEPT:


prohibits unfair
or deceptive EC
practices.

requires
protects
monitoring of
privacy.
employees' e-mail.

gives the FTC authority to take action against


companies whose lax security practices could
expose customers' financial information to
theft or loss,

44-Companies can improve their responsibility as custodians of customers' personal data


by implementing:
AUP. E-mail monitoring.

Firewalls.

Opt in and opt out information practices.

45-Which of the following statements about the rights to privacy and free speech is not
correct?
As with all rights,
the right of free
speech is not
unlimited.

Those rights have an


The Internet has
increasingly important role
destroyed the
in an information society
right to privacy.
and to EC.

Defamation laws put


restrictions on what may
be freely said or
published.

46-All of the following are ways to use the Internet to find information about an individual
EXCEPT:
Using cookies,
Reading an individual's espyware or keystroke mail, IM, blogs, or text
loggers.
messages.

Stealing the
Wiretapping
individual's
communication lines.
computer.

47-Private online communities that are only open to those who belong to them are called:
splogs

darknets

RFIDs

blogs

48-A domain name is:


intangible property
protected by law

tangible property
protected by law

intangible property that is tangible property that is


not protected by law
not protected by law

49-The ________ give law enforcement agencies broader range in their efforts to protect
the public.

Electronic Freedom
Foundation (EFF)

American Civil Liberties


Union (ACLU)

U.S. Department of
Justice (DOJ)

USA PATRIOT
Act

50-________ work on the principle that once Web surfers arrive at their site, a few of them
will click on one of the linked advertisements and earn them a few cents for each click.
Spammers

Phishers

Trackbacks

Sploggers

51-The least effective method to protect against pop-up ads and their risk is:
Pop-up blocking
software on users'
computers.

Mozilla and Firefox Web ISPs using tools that


browsers preventing pop- stop pop-ups from
ups.
appearing.

Minimizing the
pop-up window.

52-All of the following statements apply to hate Web sites EXCEPT:


Web sites that contain legitimate
complaints that aren't defamatory,
sponsored by competitors, or
infringe upon trademark rights by
confusing consumers are usually
protected by the First Amendment.

Cyberbashing is the
registration of a
domain name that
criticizes an
organization or person.

The intent of
most hate
Web sites is
to commit
fraud.

Many hate sites are


directed against large
corporations such as
Wal-Mart, Microsoft,
and Nike.

53-A legally binding contract requires a few basic elements. Which of the following is not
one of those elements?
an offer

acceptance

consideration

agreement

54-Examples of electronic signatures to help distinguish between legitimate and fraud


transactions include all of the following EXCEPT:
a name typed at the
a Web site
end of an e-mail
development
message by the sender agreement

a digitized image of a
a secret code or PIN
handwritten signature
to identify the sender
attached to an electronic
to the recipient
document

55-EC sellers need to protect against fraud and each of the following EXCEPT:

Customers who give false credit card or bad


Public
check information in payment for products
keys.
and services provided.

Use of their name Customers who deny


by imposter
that they placed an
sellers.
order.

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