EC15 TB chapter 12 - Test Bank PDF

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E-commerce 2019: business. technology. society., 15e (Laudon/Traver) Chapter 12 B2B E-commerce: Supply Chain Management and Collaborative Commerce 1) Analysts predict that B2B e-commerce in the United States will grow to approximately ________ by 2022. A) $7.3 billion B) $73 billion C) $730 billion D) $7.3 trillion Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 2) In 2018, B2B e-commerce accounted for approximately ___% of all B2B commerce. A) 12 B) 42 C) 46 D) 54 Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 3) Which of the following was the first step in the development of B2B e-commerce? A) Electronic Data Interchange (EDI) B) automated order entry systems C) computerized inventory databases D) digital invoices Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 4) Which of the following terms refers to the links that connect business firms with one another to coordinate production? A) supply chain B) B2B e-commerce C) vertical market D) horizontal market Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its 1 Copyright © 2020 Pearson Education, Inc.

potential benefits and challenges. 5) Automated order entry systems: A) show goods from a single seller. B) increased the costs of inventory replenishment. C) are typically owned by the purchasing firm. D) no longer play an important role in B2B commerce. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 6) Which of the following statements about EDI systems is true? A) They typically serve vertical markets. B) They are seller-side solutions. C) They evolved from private trading exchanges. D) They still play an important role in B2C commerce. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 7) B2B e-commerce websites: A) are a predecessor of industry consortia. B) tend to serve horizontal markets. C) are buyer-side solutions. D) are considered a type of EDI system. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 8) Which of the following is another name for a private industrial network? A) industry consortia B) EDI system C) PTX D) net marketplace Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 9) In 2018, which of the following accounted for the smallest amount of B2B commerce? A) EDI 2 Copyright © 2020 Pearson Education, Inc.

B) private industrial networks C) Net marketplaces D) traditional B2B Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 10) All of the following are potential benefits of B2B e-commerce except: A) lower administrative costs. B) lower search costs. C) lower price transparency. D) lower transaction costs. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 11) EDI began as a(n) ________ system. A) document automation B) document exchange C) invoice generation D) MRP Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 12) All of the following are potential benefits of B2B e-commerce except: A) increased production flexibility. B) increased product cycle time. C) increased opportunities to collaborate with suppliers and distributors. D) increased visibility and real-time information sharing among all participants in the supply chain network. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 13) All of the following have led to the development of outsourcing of manufacturing around the world except: A) technology. B) globalization of trade. C) environmental concerns. 3 Copyright © 2020 Pearson Education, Inc.

D) high levels of wage disparity between the developed and undeveloped worlds. Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 14) Which of the following statements about B2B marketing is not true? A) Mobile B2B marketing consumes less than 20% of B2B digital marketing budgets. B) Only 10% of B2B marketers use mobile marketing technologies. C) Content marketing is one of the primary and most effective marketing tools in B2B marketing. D) The disparity between the amount spent on B2B marketing compared to B2C e-commerce reflects the different nature of much of B2B e-commerce when compared to B2C e-commerce. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 15) Supply chain ________ refers to differentiating a firm's products or prices on the basis of superior supply chain management. A) management B) simplification C) competition D) collaboration Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 16) A(n) ________ market is one that provides expertise and products for a specific industry (i.e., automobiles). A) vertical B) horizontal C) indirect D) buyer-biased Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 17) The essential characteristic of ________ is that they bring hundreds to thousands of suppliers into a single Internet-based environment to conduct trade. A) industry consortia B) exchanges 4 Copyright © 2020 Pearson Education, Inc.

C) Net marketplaces D) horizontal markets Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 18) B2B e-commerce websites tend to serve horizontal markets. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 19) Few large firms today have Electronic Data Interchange (EDI) systems. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 20) Why is B2B e-commerce seen as a potential revenue source for B2B firms? Answer: B2B e-commerce shows promise because purchasing supplies for a firm is a costly process. For example, firms estimate that each corporate purchase order costs at least $100 in overhead. Using B2B e-commerce to automate B2B purchasing could save, overall, trillions of dollars. In turn, this could enable lower prices, increased productivity, and even greater wealth for a nation. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication; Analytical thinking Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 21) Define and discuss the terms B2B commerce, B2B e-commerce, and supply chains in the context of the history and significance of B2B e-commerce. Answer: Before the Internet, business-to-business transactions were referred to simply as trade or the procurement process. The term B2B commerce refers to all types of inter-firm trade to exchange value across organizational boundaries. B2B commerce includes the following business processes: customer relationship management, demand management, order fulfillment, manufacturing management, procurement, product development, returns, logistics/transportation, and inventory management. The term B2B e-commerce (or B2B digital commerce) refers to that portion of B2B commerce that is enabled by the Internet (including mobile apps) to assist firms in buying and selling a variety of goods to each other. The links that connect business firms in the production of goods and services are referred to as the supply chain. Supply chains are a complex system of organizations, people, business processes, technology, 5 Copyright © 2020 Pearson Education, Inc.

and information, all of which need to work together to produce products efficiently. The process of conducting trade among businesses consumes many business resources. Across the economy this amounts to trillions of dollars spent annually on procurement processes. If a significant portion of this inter-firm trade could be automated and parts of the procurement process assisted by the Internet, millions or even trillions of dollars could be freed up for other uses resulting in increased productivity and increased national economic wealth. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 22) Identify and describe the major stages in the development of B2B commerce. Answer: B2B commerce has evolved over a 45-year period through several technology-driven stages. The major stages in this evolution were the development of automated order entry systems, electronic data interchange (EDI), digital storefronts, private industrial networks, and Net marketplaces. Automated order entry systems began in the mid-1970s with the use of telephone modems to send digital orders to health care products companies. Modems were eventually replaced by personal computers using private networks in the late 1980s, and by Internet workstations accessing electronic online catalogs in the late 1990s. By the late 1970s, a new form of computer-to-computer communication called electronic data interchange (EDI) emerged. EDI is a communications standard for sharing business documents such as invoices, purchase orders, shipping bills, product stocking numbers (SKUs), and settlement information among a small number of firms. Virtually all large firms have EDI systems, and most industry groups have industry standards for defining documents in that industry. B2B e-commerce websites emerged in the mid-1990s along with the commercialization of the Internet. These storefronts are online catalogs of products made available to the public marketplace by a single supplier. Net marketplaces emerged in the late 1990s as a natural extension and scaling up of the electronic storefronts. These marketplaces bring hundreds to thousands of suppliers — each with electronic catalogs and potentially thousands of purchasing firms — into a single Internet-based environment to conduct trade. Private industrial networks also emerged in the late 1990s as natural extensions of EDI systems and the existing close relationships that developed between large industrial firms and their suppliers. Private industrial networks (also referred to as private trading exchanges, or PTXs) are Internet-based communication environments that extend far beyond procurement to encompass truly collaborative commerce. Private industrial networks permit buyer firms and their principal suppliers to share product design and development, marketing, inventory, production scheduling, and unstructured communications. These networks are the most prevalent form of Internet-based B2B commerce, and this will continue into the foreseeable future. Difficulty: Moderate 6 Copyright © 2020 Pearson Education, Inc.

AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 23) What is the first step in the procurement process? A) negotiate price B) qualify the seller and its products C) issue a purchase order D) search for suppliers Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 24) The last step in the procurement process is: A) sending a remittance payment. B) sending the invoice. C) shipping the goods. D) delivering the goods. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 25) Office supplies are an example of: A) direct goods. B) indirect goods. C) MRO goods. D) distributed goods. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 26) The majority of inter-firm trade involves: A) spot purchasing of direct goods. B) contract purchasing of indirect goods. C) contract purchasing of direct goods. D) spot purchasing of indirect goods. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 7 Copyright © 2020 Pearson Education, Inc.

27) All of the following are examples of direct goods in the auto industry except: A) sheet steel. B) shatter-resistant glass. C) rubber molding. D) desktop computers. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 28) An example of an indirect good in the fast-food industry is: A) mustard. B) paper napkins. C) beef. D) sugar. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 29) An ________ is an independently owned, online marketplace that connects hundreds to potentially thousands of suppliers and buyers in a dynamic, real-time environment. A) exchange B) e-distributor C) e-procurement company D) industry consortium Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 30) An ________ primarily serves businesses that primarily buy direct goods on a spot purchasing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 31) The liquidity of a market is measured by all of the following except: A) price transparency. 8 Copyright © 2020 Pearson Education, Inc.

B) number of buyers and sellers in market. C) volume of transactions. D) size of transactions. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 32) ________ purchasing involves the purchase of goods based on immediate needs in larger marketplaces that involve many suppliers. A) Spot B) Indirect C) Vertical D) Bulk Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 33) MRO goods are also known as direct goods. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 34) Purchasing managers are key players in the procurement process. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 35) What does the term supply chain visibility refer to and what benefits does it bring? Answer: The term supply chain visibility refers to the ability of a firm to monitor the output of its first and second tier suppliers, track and manage supplier orders, and manage transportation and logistics suppliers who are moving the products. When a supply chain is visible, you know when suppliers' products will arrive, and you have accurate tracking of your goods. The benefit of a visible supply chain is that the firm can produce accurate production schedules and develop more accurate financial forecasts. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 36) Define the procurement process. What are the seven basic steps in the procurement process? 9 Copyright © 2020 Pearson Education, Inc.

Answer: The procurement process refers to the way business firms purchase the goods they need to produce the goods they will ultimately sell to consumers. Firms purchase goods from a set of suppliers that in turn purchase their inputs from another set of suppliers. These firms are linked in a series of connected transactions. The supply chain refers to this series of transactions, which links sets of firms that do business with each other. It includes not only the firms themselves but also the relationships between them and the processes that connect them. There are seven steps in the procurement process: searching for suppliers for specific products; qualifying the sellers and the products they sell; negotiating prices; credit terms, escrow requirements, quality, and scheduling delivery; issuing purchase orders; sending invoices; goods are shipped; and the buyer sends a payment. Each step is composed of separate substeps that must be recorded in the information systems of the buyer, seller, and shipper. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B ecommerce. 37) All of the following are major trends in B2B e-commerce in 2018-2019, except: A) a movement toward implementing highly centralized supply chains to reduce risk. B) a growing emphasis on the use of business analytics software (business intelligence) to understand very large data sets. C) a growing emphasis on rapid-response and adaptive supply chains rather than lowest-cost supply chains. D) an increase in regional manufacturing and supply chains to attempt to combat the risks of farflung global networks. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 38) All of the following are weaknesses of EDI except: A) EDI is not well suited for electronic marketplaces. B) EDI lacks universal standards. C) EDI does not provide a real-time communication environment. D) EDI does not scale easily. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 39) Which of the following is a method of inventory cost management that seeks to eliminate excess inventory? A) lean production B) sustainable production C) just-in-time production D) supply chain simplification 10 Copyright © 2020 Pearson Education, Inc.

Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 40) Which of the following state...