Information Technology for Managers 2nd Edition By George Reynolds – Test Bank
To Purchase
this Complete Test Bank with Answers Click the link Below
If face any problem or
Further information contact us At tbzuiqe@gmail.com
Sample
Questions
CHAPTER 4—BUSINESS PROCESS AND IT OUTSOURCING
MULTIPLE CHOICE
1. _____
is an arrangement in which one company contracts with another organization to
provide services that could be provided by company employees.
2. Outsourcing
3. Scaling
4. Marketing
5. Manufacturing
ANS: A
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. When the people doing the work are located in another
country, the arrangement is called offshore outsourcing.
2. Which
of the following organizations outsources its work?
3. Lenc
Inc. is a chain of stores that sells home appliances and is spread across the
United States. Goods not available in one of its stores can be procured from
its other stores.
4. Zeta
Inc. supplies raw materials to Clips&Hangers, a soap and detergent
manufacturing organization.
5. Lusach
Dine entered into a two-year contract with Soy&Cream for procuring its
dairy products.
6. Ace
Healthcare entered into a five-year contract with Masters Inc. to take care of
Ace Healthcare’s recruiting process and insurance policies.
ANS: D
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. Ace Healthcare entered into a five-year contract with
Masters Inc. Masters Inc. takes care of the recruiting process and insurance
policies for Ace Healthcare. Therefore, Ace healthcare has outsourced its
insurance policy process and recruiting process to Masters Inc.
3. Bersk,
a brewing company, entered into a three-year contract with Seins Inc. According
to the contract, Seins Inc. will package and market the beverages produced by
Bersk. This is an example of _____.
4. liquidating
5. outsourcing
6. amalgamating
7. conglomerating
ANS: B
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. In this case, Bersk outsourced the packaging and
marketing of its beverages to Seins Inc.
4. When
the people of an organization doing the work for another organization are
located in another country, the arrangement is called _____.
5. horizontal
integration
6. business
unit sponsoring
7. offshore
outsourcing
8. functional
decomposition
ANS: C
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. When the people of an organization doing the work are
located in another country, the arrangement is called offshore outsourcing.
5. Many
organizations contract with service providers to handle their complete services
such as accounting and finance, customer services, human resources, and
research and development. This is known as _____.
6. vertical
integration
7. business
process outsourcing
8. outbound
telemarketing process
9. horizontal
integration
ANS: B
RATIONALE: Outsourcing takes many forms and is by no means
limited to information technology outsourcing (ITO). Many organizations
contract with service providers to handle complete business processes such as
accounting and finance, customer services, human resources, and even research
and development, in what is called business process outsourcing (BPO).
6. _____
provides valuable customer benefits, is hard for competitors to imitate, has a
direct impact on the organization’s customers, is a major cost driver, is
essential for providing services, and can be leveraged widely across many
products and markets.
7. Physical
capital
8. A
core business process
9. A
retail price index
10. Sequential
sampling
ANS: B
RATIONALE: A core business process is one that provides valuable
customer benefits, is hard for competitors to imitate, and can be leveraged
widely across many products and markets. It takes the unique knowledge and
skills of the organization’s workers to operate these processes effectively. Core
processes have a direct impact on the organization’s customers, are major cost
drivers, or are essential for providing services.
7. Which
of the following is true about a core business process?
8. It
requires an organization’s workers to possess unique knowledge and skills.
9. It
has a direct impact on the organization’s infrastructure.
10. It is
easy for competitors to imitate the process.
11. It
decelerates a product’s time to market.
ANS: A
RATIONALE: A core business process is one that provides valuable
customer benefits, is hard for competitors to imitate, and can be leveraged
widely across many products and markets. It requires an organization’s workers
to possess unique knowledge and skills to operate it effectively.
8. Which
of the following is true about outsourcing?
9. Organizations
outsource to reduce the money spent on tax and revenue.
10. Organizations
outsource to decelerate a product’s time to market.
11. Organizations
outsource to increase production cost.
12. Organizations
outsource to improve their focus on core operations.
ANS: D
RATIONALE: Organizations decide to outsource for many reasons.
The most frequently cited reasons are to cut costs, improve the firm’s focus on
core operations, upgrade the firm’s capabilities and services, and accelerate
time to market.
9. Which
of the following is a true statement?
10. Organizations
that do not outsource probably have greater recruiting expenses than
outsourcing organizations.
11. Organizations
that do not outsource have lesser cost of production than outsourcing organizations.
12. Organizations
that do not outsource have lesser marketing and deployment expenses than
outsourcing organizations.
13. Organizations
that do not outsource pay more tax than outsourcing organizations.
ANS: A
RATIONALE: Organizations that do not outsource probably have
greater recruiting, training, research and development, marketing, and
deployment expenses. These costs must be passed along in the form of higher
prices to the customer, placing the firms at a competitive cost disadvantage.
10. A firm
in the United States hired experienced software engineers from Japan and Korea
for $20 per hour, whereas they hired software engineers from the United States
for $180 per hour.The engineers in Japan and Korea couldn’t discuss and share
their views with the project leaders as freely as the employees in the United
States. A project took four months longer than expected to complete. What could
be the most appropriate reason for the delay in the project?
11. Difficulty
in communication of goals and needs due to the language barrier
12. Difficulty
in transferring the payroll
13. Difficulty
in understanding machine language
14. Difficulty
in providing the same labor status as the engineers in the US to the engineers
from Japan and Korea
ANS: A
RATIONALE: Organizations outsourcing their work to different
nations often encounter difficulties in communicating their needs due to
language barriers. However, there are other benefits associated in outsourcing
work to different nations.
11. The
core business process of a locomotive firm is designing engines. It outsources
the production of automobile bodies and several of its parts to different
organizations in South Africa and South Asia. Which of the following could be
the most appropriate reason for the locomotive firm to outsource?
12. To
increase marketing expenses on the core operation
13. To
decelerate the product’s time to the market
14. To
increase the product’s deployment expenses
15. To
focus on the firm’s main operations
ANS: D
RATIONALE: A rationale for outsourcing is to enable an organization
to focus on its most important priorities. It is highly ineffective to divert
the time and energy of key company resources to do routine work that does not
require unique skills or intimate knowledge of the firm, its products, its
services, and its customers.
12. _____
frees up a large amount of resources and management effort that can be
redirected to other more strategic issues within an organization.
13. Advertising
14. Bootstrapping
15. Outsourcing
16. Liquidating
ANS: C
RATIONALE: An important rationale for outsourcing is to enable
an organization to focus on its most important priorities. It is highly
ineffective to divert the time and energy of key company resources to do
routine work that does not require unique skills or intimate knowledge of the
firm, its products, its services, and its customers. Outsourcing frees up a
large amount of resources and management effort that can be redirected to other
more strategic issues within an organization.
13. Heinsert
Inc. is a computer manufacturing firm. Its core business process is the
production of efficient processors and storage disks. It outsources the
manufacturing of its computer screen to a camera and lens manufacturing firm
called Zetax, which is highly efficient and has world-class capabilities.
Identify the most appropriate reason why Heinsert outsources its computer
screen production.
14. To
increase the marketing expenses on its core operation
15. To
upgrade its products’ capabilities and services
16. To
increase the revenue of its products
17. To
decelerate the products’ time to market
ANS: B
RATIONALE: An outsourcing service provider can perform a
business process better than its clients ever could. The outsourcing provider
might be highly efficient, with world-class capabilities and access to new
technology, methods, and expertise that would not be cost effective for its
clients to acquire and maintain. Thus, outsourcing a function can provide a
considerable upgrade in capabilities and service.
14. ScanX
is a digital media organization. One of the organization’s key business
strategies is to launch online courses for high schools. The organization works
to develop the platform for the online course on a time constraint. ScanX
decides to outsource the launch of the product to clients in various nations so
that it can meet the deadline. Which of the following would be the most
appropriate reason for ScanX to outsource?
15. To
accelerate the product’s time to market
16. To
increase product deployment expenses
17. To
increase marketing expenses on the core operation
18. To
reduce the revenues and tax expenses
ANS: A
RATIONALE: In today’s highly competitive global marketplace, any
delay in the introduction of a new product or service can negatively impact
customer satisfaction, brand image, and cash flow. The introduction of a new product
or service often requires a high level of expertise and/or significant
infrastructure not yet present within the organization. In such cases,
outsourcing can accelerate and smooth out the start-up.
15. Organizations
that outsource to other firms also lay off portions of their own staff as part
of outsourcing. People lose their jobs as their work has been outsourced to a
different firm at lower wages. The employees become bitter and nonproductive
after such layoffs. Identify the issue associated with outsourcing that affects
an organization’s positives in such cases.
16. Payroll
issues
17. Employee
morale
18. Legal
issues
19. Security
breach
ANS: B
RATIONALE: The use of outsourcing has always been controversial
because the end result is that some people lose their jobs while others gain
jobs, often at far lower wages. It often affects the morale of employees who
may become bitter and nonproductive.
16. Icarus
Inc. manufactures fighter planes for the government. It made a strategic
decision to outsource the production of wings and turbines to another firm for
the purpose of reducing production cost and development time by two years.
However, the outsourcing provider developed the planes’ wings and turbines
using low-grade material, which led to Icarus Inc. losing its contract with the
government. The loss of time and revenue was non-amendable and the company was
closed down eventually. Which of the following issues associated with
outsourcing best describes the cause of Icarus Inc. shutting down?
17. Security
breaches
18. Legal
issues
19. Quality
problems
20. Employee
morale
ANS: C
RATIONALE: Outsourcing part or all of a business process
introduces significant risks that the service provider will create quality
problems. For example, Boeing made a strategic decision to outsource development
of the 787 Dreamliner aircraft with a goal of reducing costs by $4 billion and
cutting development time by two years. However, the development effort spiraled
out of control and it led to severe quality challenges.
17. A(n)
_____ in an outsourcing agreement defines the conditions under which either
party may exit the outsourcing relationship.
18. termination
clause
19. balance
sheet
20. offer
document
21. defense
agreement
ANS: A
RATIONALE: Every outsourcing agreement between two or more
organizations contains a termination clause that defines the conditions under
which either party may exit the outsourcing relationship. Common termination
reasons include termination for convenience, termination for failure to meet
service and performance levels, termination for material breach of contract,
and termination for financial crises.
18. Identify
the termination clause that allows an organization to unilaterally terminate an
outsourcing contract at any time with or without giving a reason.
19. Termination
for failure to meet service and performance levels
20. Termination
for material breach of contract
21. Termination
for convenience
22. Termination
for financial crises
ANS: C
RATIONALE: Termination for convenience gives a party the right
to unilaterally terminate the contract at any time—with or without giving a
reason. The other party is generally entitled to a negotiated settlement for an
equitable recovery of costs and losses incurred.
19. Identify
the termination clause that breaks the outsourcing agreement irreparably and defeats
the purpose of making the contract in the first place.
20. Termination
for failure to meet service and performance levels
21. Termination
for material breach of contract
22. Termination
for convenience
23. Termination
for financial crises
ANS: B
RATIONALE: A material breach of contract is a failure to perform
that strikes so deeply at the heart of the contract that it renders the
agreement irreparably broken and defeats the purpose of making the contract in
the first place. If a material breach occurs, the other party can simply end
the agreement and go to court to try to collect damages caused by the breach.
20. Which
termination clause allows an organization to end the outsourcing agreement and
go to court to collect compensation for the damages caused?
21. Termination
for convenience
22. Termination
for financial crises
23. Termination
for failure to meet service and performance levels
24. Termination
for material breach of contract
ANS: D
RATIONALE: A material breach of contract is a failure to perform
that strikes so deeply at the heart of the contract that it renders the
agreement irreparably broken and defeats the purpose of making the contract in
the first place. If a material breach occurs, the other party can simply end
the agreement and go to court to try to collect damages caused by the breach.
21. Xsis
Inc. is an information technology (IT) and services company. It used to
outsource its technical support calls to a company located in a Southeast Asian
country. Xsis Inc. started receiving a lot of complaints from customers on
language difficulties and delays in reaching senior technicians when speaking
to support personnel. The reduction in the volume of calls for its services led
Xsis Inc. to terminate its outsourcing contract. Identify the appropriate issue
related to outsourcing that led Xsis Inc. to terminate its contract with the
company in Southeast Asia.
22. Employee
morale
23. Technical
and legal issues
24. Negative
impact on customer relationships and satisfaction
25. Data
security and integrity issues
ANS: C
RATIONALE: Outsourcing can greatly reduce the amount of direct
communication between a company and its customers. This prevents a company from
building solid relationships with its customers, and often leads to
dissatisfaction on one or both sides.
22. City-mart,
a supermarket chain, used to outsource its logistics service. Over a period of
time, the company discovered an irregularity in the amount of products
delivered and the payments collected for those products. It was found that the
systems for payment acceptance and logistics were breached by a foreign agent
in the firm, which led to the termination of the outsourcing contract by
City-mart. Which of the following would be the most appropriate issue related
to outsourcing in this scenario?
23. Negative
impact on customer relationships and satisfaction
24. Data
security and integrity issues
25. Vertical
integration
26. Horizontal
integration
ANS: B
RATIONALE: A key outsourcing issue is concern over maintaining
data security and integrity to safeguard against data security lapses. Indeed,
a study by computer security firm Trustwave found that in nearly two-thirds of
450 data breaches examined, an outsourcing firm responsible for IT system
support, development, or maintenance had introduced security flaws that were
easily exploited by hackers.
23. A
firm in the United States outsources its technical support to a firm in South
Asia. The technical support firm collects customers’ personal data and submits
them to the service provider. However, a customer would not want information
about him or her to be available to others without his or her approval.
Identify the issue associated with offshore outsourcing that would arise if the
service provider is not particularly careful to ensure it has control over who
has access to their data.
24. Diminishing
cost advantages
25. Tax
evasion
26. Data
privacy
27. Jurisdiction
ANS: C
RATIONALE: Most offshore outsourcing agreements specify that the
customer retains ownership of all data it submits to the service provider and
that the data is to be kept strictly confidential. Companies choosing to
outsource offshore must be particularly careful to ensure they have control
over who has access to their data.
24. A
healthcare organization in Canada outsources its insurance work to a service
provider in South Asia. The employees in South Asia used to receive less than
half the salary that the employees in Canada received. But in recent years,
there has been a rapid increase in employees’ salaries in South Asia. Slowly,
the healthcare organization is reducing the level of outsourcing and is
employing people in Canada. Which of the issues associated with offshore
outsourcing describes the above scenario?
25. Diminishing
cost advantages
26. Important
technology issues
27. Frictional
unemployment issues
28. Data
privacy and integrity issues
ANS: A
RATIONALE: Salaries in developing countries such as China,
India, Latin America, and the Philippines are increasing rapidly. And the cost
advantage to outsource to such countries is being reduced.
25. _____
allows a service provider organization to own and manage the infrastructure
(including computing, networking, and storage devices) with tenant
organizations by accessing slices of shared hardware resources via the
Internet.
26. Voluntary
liquidation
27. Public
cloud computing
28. Vertical
market integration
29. Service
portfolio
ANS: B
RATIONALE: Public cloud computing allows a service provider
organization to own and manage the infrastructure (including computing,
networking, and storage devices) with cloud user organizations (called tenants)
by accessing slices of shared hardware resources via the Internet. The service
provider can deliver increasing amounts of computing, network, and storage
capacity on demand and without requiring any capital investment on the part of
the cloud users.
26. Which
of the following would be the most appropriate solution for organizations whose
computing needs vary greatly depending on changes in demand?
27. Vertical
market integration
28. Private
cloud computing
29. Public
cloud computing
30. Horizontal
market integration
ANS: C
RATIONALE: With public cloud computing, a service provider
organization owns and manages the infrastructure (including computing,
networking, and storage devices) with cloud user organizations (called tenants)
accessing slices of shared hardware resources via the Internet. Public cloud
computing is a great solution for organizations whose computing needs vary
greatly depending on changes in demand. Amazon, Cisco Systems, IBM, Microsoft,
Rackspace, Verizon Communications Inc., and VMW are among the largest cloud
computing service providers.
27. Which
of the following can be a faster, cheaper, and more agile approach to build and
manage an information technology (IT) infrastructure?
28. Public
cloud computing
29. Service
portfolio management
30. Fixed
term contract
31. Enterprise
application integration
ANS: A
RATIONALE: Public cloud computing allows a service provider
organization to own and manage the infrastructure (including computing,
networking, and storage devices) with cloud user organizations (called tenants)
accessing parts of shared hardware resources via the Internet. It can be a
faster, cheaper, and more agile approach to building and managing an IT
infrastructure.
28. Which
of the following is true about public cloud computing?
29. It is
expensive.
30. It is
less secure.
31. It is
relatively slow.
32. It is
less agile.
ANS: B
RATIONALE: Since cloud users use someone else’s data center,
public cloud computing has potential issues with service levels, loss of
control, disaster recovery, and data security. Data security in particular is a
key concern because when using a public cloud computing service, you are
relying on someone else to safeguard your data.
29. _____
is a software delivery approach in which an organization outsources the
equipment used to support its data processing operations, including servers,
storage devices, and networking components.
30. Infrastructure
as a service
31. Software
as a service
32. Service
portfolio management
33. Enterprise
application management
ANS: A
RATIONALE: Infrastructure as a service (IaaS) is a software
delivery approach in which an organization outsources the equipment used to
support its data processing operations, including servers, storage devices, and
networking components. The service provider owns the equipment and is
responsible for housing, running, and maintaining it.
30. Quake
Inc., a software giant, outsources its customer relationship management amenity
to Zeins Inc. The contract between the two firms requires Zeins Inc. to
exclusively use tools supplied by Quake Inc. and also makes Zeins responsible
for the maintenance of the tools. Identify the type of service in the above
scenario.
31. Platform
as a service
32. Vertical
integration
33. Infrastructure
as a service
34. Horizontal
integration
ANS: C
RATIONALE: Infrastructure as a service (IaaS) is a software
delivery approach in which an organization outsources the equipment used to
support its data processing operations, including servers, storage devices, and
networking components. The service provider owns the equipment and is
responsible for housing, running, and maintaining it.
31. Which
of the following software delivery approaches provides users remote access to
software as a Web-based service?
32. Application
deployment approach
33. Software
deployment approach
34. Software
as a service
35. Platform
as a service
ANS: C
RATIONALE: Software as a service (SaaS) is a software delivery
approach that provides users with access to software remotely as a Web-based
service. SaaS pricing is based on a monthly fee per user and typically results
in lower costs than a licensed application.
32. Serios
is a software development firm in Canada. It creates an application to guide
the development of Maglev trains in Mexico City and outsources the design and
maintenance of the application to Ieinsta Inc. in Mexico City. The contract
between the firms requires Ieinsta Inc. to use only the software provided by
Serios. Ieinsta Inc. has to access the software remotely as a Web-based
service. Identify the type of service provided by Serios in this scenario.
33. Infrastructure
as a service
34. Software
deployment service
35. Platform
as a service
36. Software
as a service
ANS: D
RATIONALE: Software as a service (SaaS) is a software delivery
approach that provides users with access to software remotely as a Web-based
service. SaaS pricing is based on a monthly fee per user and typically results
in lower costs than a licensed application.
33. Identify
an advantage of the software as a service (SaaS) approach in public cloud
computing.
34. The
user can create an application using tools and libraries from the provider.
35. The
user handles software maintenance and upgrading features.
36. The
user controls software deployment and configuration settings.
37. The
user does not need to purchase and install additional hardware to provide
increased capacity.
ANS: D
RATIONALE: SaaS is a software delivery approach that provides
users with access to software remotely as a Web-based service. SaaS pricing is
based on a monthly fee per user and typically results in lower costs than a
licensed application. As the software is hosted remotely, users do not need to
purchase and install additional hardware to provide increased capacity.
34. _____
is a public cloud computing approach that provides users with a computing
platform, which includes an operating system, a programming language execution
environment, database services, and a Web server.
35. Software
as a service
36. Platform
as a service
37. Security
as a service
38. Backend
as a service
ANS: B
RATIONALE: Platform as a service (PaaS) provides users with a
computing platform, typically including operating system, programming language
execution environment, database services, and Web server. The user can create
an application or service using tools and/or libraries from the provider.
35. Valley
Inc. is a Texas-based firm that develops applications for heavy machinery. The
major part of coding and development is outsourced to Rousc Inc., in North
Korea. As per the contract, Valley Inc. provides Rousc Inc. with the
programming language execution environment, database services, and a Web server.
Rousc Inc. also gets to control the application’s deployment and configuration
settings. Which type of service does Valley Inc. provide?
36. Forward
market integration service
37. Software
as a service
38. Platform
as a service
39. Reverse
market integration service
ANS: C
RATIONALE: Platform as a service (PaaS) provides users with a
computing platform, typically including operating system, programming language
execution environment, database services, and Web server. The user can create
an application or service using tools and/or libraries from the provider. The
user also controls software deployment and configuration settings.
36. Which
public cloud computing approach allows the user to create an application or
service using tools and/or libraries from the provider and control software
deployment and configuration settings?
37. Platform
as a service
38. Software
as a service
39. Autonomic
computing
40. Service
portfolio management
ANS: A
RATIONALE: Platform as a service (PaaS) provides users with a
computing platform, typically including operating system, programming language
execution environment, database services, and Web server. Users can create an
application or service using tools and/or libraries from the provider.
37. _____
enables application developers to develop, test, and run their software
solutions on a cloud platform without the cost and complexity of buying and
managing the underlying hardware and software.
38. Autonomic
computing
39. Service
portfolio management
40. Platform
as a service
41. Security
as a service
ANS: C
RATIONALE: Platform as a service (PaaS) provides users with a
computing platform, typically including operating system, programming language
execution environment, database services, and Web server. It enables
application developers to develop, test, and run their software solutions on a
cloud platform without the cost and complexity of buying and managing the
underlying hardware and software.
38. Which
of the following is a component used by a cloud user in a cloud computing
environment?
39. A
storage device
40. A web
server
41. An
operating system
42. A
smartphone
ANS: D
RATIONALE: Smartphones, tablets, laptops, and desktops are the
components used by a cloud user in a cloud computing environment. These
components are used to gain full advantage of cloud computing.
39. Identify
a component of infrastructure as a service (IaaS) cloud computing.
40. A
network device
41. A
laptop
42. A
smartphone
43. A
database
ANS: A
RATIONALE: Infrastructure as a service (IaaS) is a software
delivery approach in which an organization outsources the equipment used to
support its data processing operations, including servers, storage devices, and
networking components. Virtual machines, servers, storage devices, and network
devices are the components of IaaS cloud computing.
40. Identify
a component of platform as a service (PaaS) in a cloud computing environment.
41. A
virtual machine
42. Bluetooth
43. A
network device
44. An
operating system
ANS: D
RATIONALE: Operating system, programming language, database, and
Web server are the components of platform as a service (PaaS) in a cloud
computing environment. The user can create an application or service using
tools and/or libraries from the provider.
41. Which
of the following challenges is faced by organizations that are moving toward
the cloud computing environment?
42. Hidden
costs
43. Flexible
user support
44. Less
than expected downtime
45. Invisible
system complexity
ANS: A
RATIONALE: Organizations moving toward the cloud computing
environment face issues such as complex pricing arrangements and hidden costs
that reduce expected cost savings, performance issues that cause wide
variations in performance over time, poor user support, and greater than
expected downtime.
42. Which
of the following cloud computing technologies separates a physical computing
device into one or more devices, each of which can be easily used and managed
to perform computing tasks?
43. Personalization
44. Visualization
45. Virtualization
46. Polymerization
ANS: C
RATIONALE: Virtualization is the main enabling technology for
cloud computing. It separates a physical computing device into one or more
“virtual” devices (e.g., server or storage device), each of which can be easily
used and managed to perform computing tasks.
Comments
Post a Comment