ISM 302 - FE EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
Enterprise Resource Planning (ERP) programs: - Answers Core software used by companies to
coordinate information in every area of business
- Help manage companywide business processes
- Use common database and shared management reporting tools
Business process - Answers Collection of activities that takes some input and creates an output that is
of value to the customer
Typical functions or departments found in a modern organization include - Answers purchasing,
operations, warehouse, sales and marketing, research and development, finance and accounting,
human resources, and information systems.
The Silo Effect - Answers People in the different functional areas came to perform their steps in the
process in isolation, without fully understanding which steps happen before and which steps happen
next.
A key point about the silo effect - Answers A key point here is that the silo nature of the functional
organizational structure and the cross-functional nature of processes are at odds with each other.
Enterprise System - Answers A company will manufacture its products in different countries, acquire
the materials to make these products from different locations, sell the products in many countries.
end-to-end process - Answers Systems that support end-to-end processes are called enterprise
systems (ES)
Functional Areas of Operation - Answers Marketing and Sales (M/S)
Supply Chain Management (SCM)
Accounting and Finance (A/F)
Human Resources (HR)
Purchasing
Production
Business functions: Activities specific to a functional area of operation
Information system (IS) - Answers Computers, people, procedures, and software that store, organize,
and deliver information
Business Processes - Answers Collection of activities that takes one or more kinds of input and creates
an output that is of value to customer
external customer vs internal customer - Answers Internal customer and external customer are
potential or current buyers. Internal customers are buyers who are associated with the organization
they are buying the product. External customers are buyers who are not affiliated with the company
they are purchasing the product or services.
The procurement process (buy) - Answers refers to all of the activities involved in buying or acquiring
the materials used by the organization, such as raw materials needed to make products.
The production process (make) - Answers involves the actual creation of the products within the
organization. Whereas the production process is concerned with acquiring needed materials
internally (by making them), the procurement process is concerned with obtaining needed materials
externally (by buying them)
The fulfillment process (sell) - Answers consists of all the steps involved in selling and delivering the
products to the organization's customers.
The material planning process (plan) - Answers uses historical data and sales forecasts to plan which
materials will be procured and produced and in what quantities.
The inventory and warehouse management (IWM) - Answers process (store) is used to store and track
the materials.
The asset management and customer service processes (service) - Answers are used to maintain
internal assets such as machinery and to deliver after-sales customer service such as repairs
Human capital management (HCM) processes (people) - Answers focus on the people within the
organization and include functions such as recruiting, hiring, training, and benefits management.
Project management processes (projects) - Answers are used to plan and execute large projects such
as the construction of a new factory or the production of complex products such as airplanes.
Financial accounting (FI) processes (track-external ) - Answers track the financial impacts of process
steps with the goal of meeting legal reporting requirements—for example, the Internal Revenue
Service (IRS) or the Securities and Exchange Commission ( SEC)
, Sharing data effectively and efficiently - Answers ______ between and within functional areas leads to
more efficient business processes
always consider customer's viewpoint - Answers Businesses must __________ in any transaction
Integrated information systems: - Answers Systems in which functional areas share data
An Enterprise Resource Planning (ERP) system can help integrate a company's operations - Answers -
Acts as a company-wide computing environment
-Includes a database that is shared by all functional areas
-Can deliver consistent data across all business functions in real time
Current ERP systems evolved as a result of: - Answers - Advancement of hardware and software
technology
- Development of a vision of integrated information systems
- Reengineering of companies to shift from a functional focus to a business process focus
Computer hardware and software developed rapidly - Answers ____in the 1960s and 1970s
First practical business computers were the mainframe computers - Answers ______of the 1960s
Moore's Law - Answers Number of transistors that could be built into a computer chip doubled every
18 months
relational database software developed - Answers 1970s
spreadsheet software became popular - Answers 1980s
telecommunications developments allowed users to share data and peripherals on local networks
Client-server architecture - Answers By the mid-1980s
the hardware needed to support development of ERP systems was in place - Answers By the end of
the 1980s
database management system (DBMS) required to manage development of complex ERP software
existed - Answers By the mid-1980s
Manufacturing software developed - Answers during the 1960s and 1970s
Evolved from simple inventory-tracking systems to _________ software - Answers material
requirements planning (MRP)
Electronic data interchange (EDI) - Answers - Direct computer-to-computer exchange of standard
business documents
- Allowed companies to handle the purchasing process electronically
five former IBM systems analysts in Mannheim, Germany formed Systemanalyse und
Programmentwicklung (Systems Analysis and Program Development, or SAP) - Answers 1972
SAP's goals: - Answers - Develop a standard software product that could be configured to meet the
needs of each company
- Data available in real time
- Users working on computer screens, rather than with voluminous printed output
SAP Begins Developing Software Modules - Answers During their work for German chemical company
ICI, Plattner and Hopp had developed the idea of modular software development
SAP released its R/2 mainframe ERP software package - Answers 1982
sales grew rapidly; SAP extended its software's capabilities and expanded into international markets -
Answers 1980s
SAP had established subsidiaries in numerous foreign countries - Answers By 1988
first version of SAP R/3 released - Answers 1992:
Open architecture: - Answers third-party software companies encouraged to develop add-on software
products that can be integrated with existing software
Year 2000 (or Y2K) problem motivated many companies to move to ERP systems - Answers Late 1990s
SAP AG had 22,000 employees in 50 countries and 10 million users at 30,000 installations around the
world - Answers By 2000
By 2000, SAP's competition in the ERP market: - Answers - Oracle
- PeopleSoft
Oracle succeeded in its bid to take over PeopleSoft - Answers Late 2004
Current SAP ERP system: SAP ECC 6.0 (Enterprise Central Component 6.0) - Answers - Sales and
Distribution (SD) module
- Materials Management (MM) module
- Production Planning (PP) module
- Quality Management (QM) module
- Plant Maintenance (PM) module
Enterprise Resource Planning (ERP) programs: - Answers Core software used by companies to
coordinate information in every area of business
- Help manage companywide business processes
- Use common database and shared management reporting tools
Business process - Answers Collection of activities that takes some input and creates an output that is
of value to the customer
Typical functions or departments found in a modern organization include - Answers purchasing,
operations, warehouse, sales and marketing, research and development, finance and accounting,
human resources, and information systems.
The Silo Effect - Answers People in the different functional areas came to perform their steps in the
process in isolation, without fully understanding which steps happen before and which steps happen
next.
A key point about the silo effect - Answers A key point here is that the silo nature of the functional
organizational structure and the cross-functional nature of processes are at odds with each other.
Enterprise System - Answers A company will manufacture its products in different countries, acquire
the materials to make these products from different locations, sell the products in many countries.
end-to-end process - Answers Systems that support end-to-end processes are called enterprise
systems (ES)
Functional Areas of Operation - Answers Marketing and Sales (M/S)
Supply Chain Management (SCM)
Accounting and Finance (A/F)
Human Resources (HR)
Purchasing
Production
Business functions: Activities specific to a functional area of operation
Information system (IS) - Answers Computers, people, procedures, and software that store, organize,
and deliver information
Business Processes - Answers Collection of activities that takes one or more kinds of input and creates
an output that is of value to customer
external customer vs internal customer - Answers Internal customer and external customer are
potential or current buyers. Internal customers are buyers who are associated with the organization
they are buying the product. External customers are buyers who are not affiliated with the company
they are purchasing the product or services.
The procurement process (buy) - Answers refers to all of the activities involved in buying or acquiring
the materials used by the organization, such as raw materials needed to make products.
The production process (make) - Answers involves the actual creation of the products within the
organization. Whereas the production process is concerned with acquiring needed materials
internally (by making them), the procurement process is concerned with obtaining needed materials
externally (by buying them)
The fulfillment process (sell) - Answers consists of all the steps involved in selling and delivering the
products to the organization's customers.
The material planning process (plan) - Answers uses historical data and sales forecasts to plan which
materials will be procured and produced and in what quantities.
The inventory and warehouse management (IWM) - Answers process (store) is used to store and track
the materials.
The asset management and customer service processes (service) - Answers are used to maintain
internal assets such as machinery and to deliver after-sales customer service such as repairs
Human capital management (HCM) processes (people) - Answers focus on the people within the
organization and include functions such as recruiting, hiring, training, and benefits management.
Project management processes (projects) - Answers are used to plan and execute large projects such
as the construction of a new factory or the production of complex products such as airplanes.
Financial accounting (FI) processes (track-external ) - Answers track the financial impacts of process
steps with the goal of meeting legal reporting requirements—for example, the Internal Revenue
Service (IRS) or the Securities and Exchange Commission ( SEC)
, Sharing data effectively and efficiently - Answers ______ between and within functional areas leads to
more efficient business processes
always consider customer's viewpoint - Answers Businesses must __________ in any transaction
Integrated information systems: - Answers Systems in which functional areas share data
An Enterprise Resource Planning (ERP) system can help integrate a company's operations - Answers -
Acts as a company-wide computing environment
-Includes a database that is shared by all functional areas
-Can deliver consistent data across all business functions in real time
Current ERP systems evolved as a result of: - Answers - Advancement of hardware and software
technology
- Development of a vision of integrated information systems
- Reengineering of companies to shift from a functional focus to a business process focus
Computer hardware and software developed rapidly - Answers ____in the 1960s and 1970s
First practical business computers were the mainframe computers - Answers ______of the 1960s
Moore's Law - Answers Number of transistors that could be built into a computer chip doubled every
18 months
relational database software developed - Answers 1970s
spreadsheet software became popular - Answers 1980s
telecommunications developments allowed users to share data and peripherals on local networks
Client-server architecture - Answers By the mid-1980s
the hardware needed to support development of ERP systems was in place - Answers By the end of
the 1980s
database management system (DBMS) required to manage development of complex ERP software
existed - Answers By the mid-1980s
Manufacturing software developed - Answers during the 1960s and 1970s
Evolved from simple inventory-tracking systems to _________ software - Answers material
requirements planning (MRP)
Electronic data interchange (EDI) - Answers - Direct computer-to-computer exchange of standard
business documents
- Allowed companies to handle the purchasing process electronically
five former IBM systems analysts in Mannheim, Germany formed Systemanalyse und
Programmentwicklung (Systems Analysis and Program Development, or SAP) - Answers 1972
SAP's goals: - Answers - Develop a standard software product that could be configured to meet the
needs of each company
- Data available in real time
- Users working on computer screens, rather than with voluminous printed output
SAP Begins Developing Software Modules - Answers During their work for German chemical company
ICI, Plattner and Hopp had developed the idea of modular software development
SAP released its R/2 mainframe ERP software package - Answers 1982
sales grew rapidly; SAP extended its software's capabilities and expanded into international markets -
Answers 1980s
SAP had established subsidiaries in numerous foreign countries - Answers By 1988
first version of SAP R/3 released - Answers 1992:
Open architecture: - Answers third-party software companies encouraged to develop add-on software
products that can be integrated with existing software
Year 2000 (or Y2K) problem motivated many companies to move to ERP systems - Answers Late 1990s
SAP AG had 22,000 employees in 50 countries and 10 million users at 30,000 installations around the
world - Answers By 2000
By 2000, SAP's competition in the ERP market: - Answers - Oracle
- PeopleSoft
Oracle succeeded in its bid to take over PeopleSoft - Answers Late 2004
Current SAP ERP system: SAP ECC 6.0 (Enterprise Central Component 6.0) - Answers - Sales and
Distribution (SD) module
- Materials Management (MM) module
- Production Planning (PP) module
- Quality Management (QM) module
- Plant Maintenance (PM) module
