TRUE/FALSE 1.One of the four functional areas of operation is Human Resources (HR).ANS:T2.

Historically, businesses have had organizational structures that separated the functional areas, but business schools have not been organized like that.ANS:F3.Information systems that are designed so functional areas share data are called integratedinformation systems.ANS:T4.The functional area of Supply Chain Management (SCM) sets prices.ANS:F5.Sales forecasts are historical records of sales.ANS:F6.Accounts receivable are recorded by the Human Resources department (HR).ANS:F7.The business function of government compliance falls under the Supply Chain Managementfunctional area of operation.ANS:F8.The business process of Cash Flow Management is handled under the Accounting and Financefunctional area of operation.ANS:T9.When manufacturing runs out of raw materials, its known as a stockout.ANS:T10.To avoid stockouts, manufacturers might carry extra raw materials. This excess is known assafety stock.ANS:T1.The complex hardware and software that goes into an ERP system was not available until the1970s.ANS:F 2.The capabilities of computer hardware doubling every 18 months is known as Gates Law.ANS:F3.Scalability refers to a piece of equipments capacity being exceeded and that capacity beingexpanded by adding new hardware.ANS:T4.The software that holds data in an organized fashion is known as a database management system,or a DBMS.ANS:T5.Materials requirements planning (MRP) software allows a plant manager to plan production andraw materials requirements by guess-timation.ANS:F6.The direct computer-to-computer exchange of standard business documents is known as EDI, or electronic data interchange.ANS:T7.The functional model of business and management was useful for decades and is still the currentschool of thought.ANS:F8.SAPs first software project involved developing a materials and logistics management systemfor ICI.ANS:T9.SAP expanded into international markets but kept the software in a single language, German, anda single currency, the Euro.ANS:F10.SAPs R/3 can only run on mainframe computers.ANS:F11.Old systems are known as legacy systems.ANS:T12.Open architecture is defined as allowing third-party software vendors to write software tointegrate with the main package, such as SAPs R/3.ANS:T 13.The Oracle corporation began selling ERP software; they recently acquired a firm known for itsdatabase management systems.ANS:F14.Defining the dollar limits on transactions in the SAP R/3 system is known as limiting thetolerance groups.ANS:T15.R/3s design incorporates best practices, which means the designers have chosen the best, mostefficient way in which a business process should be handled.ANS:T16.One benefit of ERP systems is the elimination of updating and repairing many separate computer systems.ANS:T17.A large company might spent $1 million on ERP implementation, which includes software andtraining.ANS:F18.Not every company is suited to ERP systems.ANS:T19.SAPs internal programming language is visual basic.ANS:F20.The return on investment (ROI) is an assessment of an investments projects value that iscalculated by dividing the value of the projects benefits by the value of the projects cost.ANS:T21.In the following figure, data is entered into the system once and then used throughout theorganization. ANS:T22.Individual information systems for each functional area in a company are known as silos.ANS:T23.Silos of information are also known as stovepipes.ANS:T24.The most current version of SAPs software is known as

R/3.ANS:F25.The most current version of SAPs software is known as SAP ERP.ANS:T1.In SAP R/3, relatively permanent data about customers is kept in the Customer Master Data table.ANS:T2.In SAP R/3, relatively permanent data about inventory is kept in the Material Master Data table.ANS:T3.In SAP R/3, relatively permanent data in the Material Master Data table is available to only onemodule, the Materials Management module.ANS:F4.In SAP R/3, relatively permanent data about customers in the Customer Master Data table isavailable to only the Sales a ANS:F5.SAP R/3s system allows one to group customers, which is commonly known as an"organizational structure".ANS:T6.In SAP R/3, the linked set of document numbers is called the "document flow".ANS:T7.In SAP R/3 the electronic evidence of a transaction is called a document.ANS:T8.The first step in the SAP ERP sales and distribution process is the Sales Order Processing step.ANS:F9.Pricing cannot be set or configured in the SAP ERP system.ANS:F10.Pricing can be set using condition techniques.ANS:T11.CRM software stands for Custom Resource Management. This is a specialized type of ERP.ANS:F12.Global ATP allows for searching of a particular product at multiple plants worldwide.ANS:T13.Returned products to a company are processed more efficiently if the customer first calls for aRMA.ANS:T14.An inquiry in the SAP ERP system occurs in the Delivery step of the Sales and Distributioncycle.ANS:F15.In the SAP ERP system, delivery means releasing the documents that the warehouse uses to pick, pack, and ship orders, rather than the traditional definition of transferring goods.ANS:T16.The PO Number is a number assigned by Fitter Snacker to track orders in the SAP ERP system. ANS:F17.With on-demand CRM, the software and computer equipment reside with the CRM provider; it isnot installed in-house. ANS:F17.With on-demand CRM, the software and computer equipment reside with the CRM provider; it isnot installed in-house.ANS:T1.Good production decisions can be made knowing only the current level of finished goodsinventory.ANS:F2.Production planners aggregate products into product groups to make forecasts and plans moreaccurate.ANS:F3.The Sales and Operations Planning process is used to combine the sales forecast with capacityinformation to determine a production plan for finished goods.ANS:T4.Demand Management in the SAP R/3 system is the process where sales forecasts are adjusted toincorporate the impact of marketing initiatives.ANS:F5.The MRP process determines the schedule of finished goods production.ANS:F6.Supply Chain Management is as much an approach to doing business with suppliers as it is atechnology.ANS:T7.In a traditional supply chain, demand information is transmitted rapidly to all members of thesupply chain.ANS:F8.ERP systems are necessary to implement good supply chain management.ANS:F9.The percentage of the order that the supplier provides in the first shipment is known as the first-rate.ANS:F10.Make to order items are produced to fill customers requests.ANS:T 11.The cost it normally takes to manufacture a product, which is usually derived from historical dataand any changes that have occurred since then, is known as a structured cost.ANS:F12.Rough-cut planning is a common term in manufacturing for aggregate planning.ANS:T13.The production plan for all finished goods is known as the MPS, or the master productionschedule.ANS:T14.Another term for the recipe of a product is the bill of materials.ANS:T15.Lead times and lot sizing help a company determine the transfer of goods to the customer.ANS:F16.Because Fitter Snacker uses large quantities of oats, the most cost-effective way to purchase oatsis to buy a farm and grown

them.ANS:F17.Because Fitter Snacker uses large quantities of oats, the most cost-effective way to puchase oatsis in bulk hopper-truck quantities, which means that the material must be ordered in 44,000 poundquantities.ANS:T18.The percentage of the order that the supplier provided in the first shipment is known as the initialorder lead time.ANS:F19.The initial fill rate measures the time needed for the supplier to fill the order.ANS:F1.An income statement shows a company's profit or loss in a period.ANS:T2.When a company has an ERP system it no longer needs a general ledger.ANS:F3.When a company has an ERP system the general ledger is maintained by the ERP system.ANS:T 4.The SAP ERP system has a module called Accounting and Finance.ANS:F5.In SAP ERP access to general ledger accounts is spread over many modules.ANS:T6.In a manufactured item, the cost of heating the plant would be considered part of the item's rawmaterials.ANS:F7.In a manufactured item, the cost of heating the plant would be considered part of the item'soverhead.ANS:T8.Using standard costs to accumulate manufacturing costs means that the company does not have tokeep track of actual manufacturing costs.ANS:F9.Activity based costing is a way of treating overhead costs more like direct costs.ANS:T10.Activity based costing means keeping track of instances of activities as well as their costs.ANS:T11.Having ERP will let a company use more cost allocation bases.ANS:T12.Having ERP will require a company to restrict the number of cost allocation bases.ANS:F13.In an ERP system, data does not flow from one module to another.ANS:T14.In SAP ERP an event's "document flow" can be accessed from any SAP ERP screen.ANS:T15.SAP ERP's management reporting tools use data in data warehouses.ANS:T 16.The capability of viewing summary information and then being able to look at details behind thesummary is known as data mining.ANS:F17.The US Congress passed the Sarbanes-Oxley Act of 2002 in response to the fraud and abuse inthe Enron collapse.ANS:T18.An ERP system could have prevented all fraud at Enron.ANS:F19.Its very easy to delete items in the ERP system.ANS:F20.User authorizations help prevent fraud and abuse by employees paying fictitious vendors.ANS:T21.Tolerance groups allow for limiting the authority of employees over certain amounts of transactions.ANS:T22.The following is an example of Fitter Snackers Balance Sheet.