Chapter 1: Business Functions and Business Processes
TRUE/FALSE
1. One of the four functional areas of operation is Human Resources (HR).
ANS: T PTS: 1 REF: 2
2. Historically, businesses have had organizational structures that separated the functional areas, but
business schools have not been organized like that.
ANS: F PTS: 1 REF: 3
3. Information systems that are designed so functional areas share data are called integrated
information systems.
ANS: T PTS: 1 REF: 4
4. Sales forecasts are historical records of sales.
ANS: F PTS: 1 REF: 7
5. The business process of Cash Flow Management is handled under the Accounting and Finance
functional area of operation.
ANS: T PTS: 1 REF: 2 | 7
6. The functional area of Supply Chain Management (SCM) sets prices.
, ANS: F PTS: 1 REF: 7 | 9
7. When manufacturing runs out of raw materials, it’s known as a stockout.
ANS: T PTS: 1 REF: 11
8. To avoid stockouts, manufacturers might carry extra raw materials. This excess is known as
safety stock.
ANS: T PTS: 1 REF: 11
9. Accounts receivable are recorded by the Human Resources department (HR).
ANS: F PTS: 1 REF: 12
10. The business function of government compliance falls under the Supply Chain Management
functional area of operation.
ANS: F PTS: 1 REF: 2 | 14
MULTIPLE CHOICE
1. Which of the following is a functional area of operation?
a. Packaging c. Shipping
b. Supply Chain Management d. Baking
ANS: B PTS: 1 REF: 2
2. Which business function is performed by Accounting and Finance?
, a. Cost allocation and control c. Benefits
b. Taking sales orders d. Plant maintenance
ANS: A PTS: 1 REF: 2
3. What are the computers, people, procedures, and software that store, organize, and deliver
information in an organization?
a. The CPU c. Information systems
b. The Process System d. Personnel systems
ANS: C PTS: 1 REF: 3
4. Today’s managers are beginning to think in terms of business process. A business process cuts
across which functional areas of operation?
a. Marketing and Sales d. Human Resources
b. Supply Chain Management e. All of the above
c. Accounting and Finance
ANS: E PTS: 1 REF: 3
5. Information systems that can be designed so that functional areas of operation share data are
called:
a. integrated information systems c. non-middleware information systems
b. complete information systems d. linked information systems
ANS: A PTS: 1 REF: 4
6. Estimates of future product demand, which are the amount of a product that customers will want
to buy, are called:
, a. sales forecasts c. sales diving
b. sales divining d. sales deriving
ANS: A PTS: 1 REF: 7
7. Which of the following is an input to the Marketing and Sales functional area?
a. Production plans c. Per-unit cost
b. Raw material orders d. Accounts payable data
ANS: C PTS: 1 REF: 10
8. When purchasing a computer, the functional area responsible for handling the financial help for
purchasing that computer is:
a. Marketing and Sales c. Supply Chain Management
b. Accounting and Finance d. Human Resources
ANS: B PTS: 1 REF: 3
9. Successful business managers view their business operations from the perspective of a(n):
a. satisfied customer c. profitable sale
b. positive cash flow d. accurate sales forecast
ANS: A PTS: 1 REF: 4
10. When manufacturing runs out of raw material, it is known as a(n):
a. shortfall c. depletion
b. empty shelf d. stockout
TRUE/FALSE
1. One of the four functional areas of operation is Human Resources (HR).
ANS: T PTS: 1 REF: 2
2. Historically, businesses have had organizational structures that separated the functional areas, but
business schools have not been organized like that.
ANS: F PTS: 1 REF: 3
3. Information systems that are designed so functional areas share data are called integrated
information systems.
ANS: T PTS: 1 REF: 4
4. Sales forecasts are historical records of sales.
ANS: F PTS: 1 REF: 7
5. The business process of Cash Flow Management is handled under the Accounting and Finance
functional area of operation.
ANS: T PTS: 1 REF: 2 | 7
6. The functional area of Supply Chain Management (SCM) sets prices.
, ANS: F PTS: 1 REF: 7 | 9
7. When manufacturing runs out of raw materials, it’s known as a stockout.
ANS: T PTS: 1 REF: 11
8. To avoid stockouts, manufacturers might carry extra raw materials. This excess is known as
safety stock.
ANS: T PTS: 1 REF: 11
9. Accounts receivable are recorded by the Human Resources department (HR).
ANS: F PTS: 1 REF: 12
10. The business function of government compliance falls under the Supply Chain Management
functional area of operation.
ANS: F PTS: 1 REF: 2 | 14
MULTIPLE CHOICE
1. Which of the following is a functional area of operation?
a. Packaging c. Shipping
b. Supply Chain Management d. Baking
ANS: B PTS: 1 REF: 2
2. Which business function is performed by Accounting and Finance?
, a. Cost allocation and control c. Benefits
b. Taking sales orders d. Plant maintenance
ANS: A PTS: 1 REF: 2
3. What are the computers, people, procedures, and software that store, organize, and deliver
information in an organization?
a. The CPU c. Information systems
b. The Process System d. Personnel systems
ANS: C PTS: 1 REF: 3
4. Today’s managers are beginning to think in terms of business process. A business process cuts
across which functional areas of operation?
a. Marketing and Sales d. Human Resources
b. Supply Chain Management e. All of the above
c. Accounting and Finance
ANS: E PTS: 1 REF: 3
5. Information systems that can be designed so that functional areas of operation share data are
called:
a. integrated information systems c. non-middleware information systems
b. complete information systems d. linked information systems
ANS: A PTS: 1 REF: 4
6. Estimates of future product demand, which are the amount of a product that customers will want
to buy, are called:
, a. sales forecasts c. sales diving
b. sales divining d. sales deriving
ANS: A PTS: 1 REF: 7
7. Which of the following is an input to the Marketing and Sales functional area?
a. Production plans c. Per-unit cost
b. Raw material orders d. Accounts payable data
ANS: C PTS: 1 REF: 10
8. When purchasing a computer, the functional area responsible for handling the financial help for
purchasing that computer is:
a. Marketing and Sales c. Supply Chain Management
b. Accounting and Finance d. Human Resources
ANS: B PTS: 1 REF: 3
9. Successful business managers view their business operations from the perspective of a(n):
a. satisfied customer c. profitable sale
b. positive cash flow d. accurate sales forecast
ANS: A PTS: 1 REF: 4
10. When manufacturing runs out of raw material, it is known as a(n):
a. shortfall c. depletion
b. empty shelf d. stockout
