ISM 302 EXAM QUESTIONS WITH COMPLETE ANSWERS LATEST UPDATE 2026
t or f: One of the four functional areas of operation is Human Resources (HR). - Answers t
t or f: Historically, businesses have had organizational structures that separated the functional areas,
but business schools have not been organized like that. - Answers f
t or f: Information systems that are designed so functional areas share data are called integrated
information system. - Answers t
t or f: Sales forecast are historical records of sales. - Answers f
t or f: The business process of Cash Flow Management in handled under the Accounting and Finance. -
Answers t
t or f: The functional are of Supply Chain Management (SCM) sets prices. - Answers f
t or f: When manufacturing runs out of raw materials, it's known as a stockout. - Answers t
t or f: To avoid stockout, manufactures might carry extra raw materials. This excess is known as safety
stock. - Answers t
t or f: Accounts receivable are recorded by Human Resources department (HR). - Answers f
t or f: The business function of government compliance falls under the Supply Chain Management
Functional area of operation. - Answers f
Which of the following is a functional area of operation?
a. packaging
b. supply chain management
c. shipping
d. baking - Answers b
Which business function is performed by accounting and finance?
a. cost allocation and control
b. taking sales orders
c. benefits
d. plant maintenance - Answers a
What are the computers, people, procedures, and software that store, organize, and deliver
information in an organization?
a. The CPU
b. The process system
c. Information system
d. Personnel systems - Answers c
Today's managers are begging to think in terms of business process. A business process cuts across
which functional areas of operation?
a. marketing and sales
b. supply chain management
c. accounting and finance
d. human resources
e. all the above - Answers e
Information systems that can be designed so that functional areas of operation share data are called:
a. integrated information systems
b. complete information system
c. non-middleware information system
d. linked information system - Answers a
Estimates of future product demands, which are the amount of a product that customer will want to
buy, are called:
a. sales forecasting
b. sales divining
c. sales diving
d. sales deriving - Answers a
Which of the following is an input to the Marketing and Sales functional area?
a. production plans
b. raw materials orders
c. per-unit cost
d. accounts payable - Answers c
,When purchasing a computer, the functional area responsible for handling the financial help for
purchasing the computer is:
a. marketing and sales
b. accounting and finance
c. supply chain management
d. human resources - Answers b
Successful business managers view their business operations from the perspective of a(n):
a. satisfied customer
b. positive cash flow
c. profitable sale
d. accurate sales forecast - Answers a
When manufacturing runs out of raw materials, it is know as a(n):
a. shortfall
b. empty shelf
c. depletion
d. stockout - Answers d
_______ can result in management overestimating in inventory.
a. bulging raw materials
b. stockup
c. safety stock
d. excess baggage - Answers c
Which of the following outputs would emerge from the Accounting and Finance functional ares?
a. packaging orders
b. sales strategy
c. regulation compliance
d. financial reports - Answers d
Which of the following is an input to HR?
a. personnel forecast
b. sales data
c. layoff and recall company policy
d. travel expense company policy - Answers a
_____________ programs are core software used by companies to coordinate information in every
area of the business. - Answers enterprise resources planning
A collection of activities that takes one or more kinds of input and creates an output that is of value to
the customer is called a(n) ________________. - Answers business process
The business functions of financial accounting, cost allocation and control, planning and budgeting,
and cash-flow management take place in the __________ functional area of operation. - Answers
accounting and finance
One example of the business function that happen in the human resources area of operation would
be __________. - Answers recruiting and hiring
A(n) ____________ includes the computer, people procedures, and software that store, organize, and
deliver information. - Answers information system
Information system designed so that functional area share data are called ________. - Answers
integrated information system
A shortfall of raw materials is know as a(n) ____________. - Answers stockout
To avoid stockout manufactures might carry extra raw materials known as _____________. - Answers
safety stock
t or f: Individual information systems for each functional area in a company are know as silos. -
Answers t
t or f:Silos of information are also know as stovepipes. - Answers t
t of f: The complex hardware and software that goes into an ERP system was not available until the
1970's. - Answers f
t of f: The capabilities of computer hardware doubling every 18 months is known as Gates Law. -
Answers f
t of f: Scalability means that the capacity of a piece of equipment can be increased by adding new
hardware. - Answers t
, t or f: The software that holds data in an organized function is known as a database management
system, or a DBMS. - Answers t
t or f: Materials requirement prediction (MRP) software allows a plant manager to plan production
and raw materials requirement by guess- timation. - Answers f
t or f: The direct computer-to-computer exchange of standard business document is known as EDI, or
electronic data interchange. - Answers t
t or f: The functional model of business and management was useful for decades and is still the
current school of thought. - Answers f
t or f: SAP expanded into international markets but kept the software in a single language, German,
and a single currency, the Euro. - Answers f
t of f: SAP's R/3 can only run on mainframe computers. - Answers f
SAP's goal was to develop a standard software production that could be configured to meet the need
of each company. - Answers t
t or f: Old system are know as legacy system. - Answers t
t or f: Open architecture encourages software companies are encouraged to develop add-on-
software. - Answers t
t or f: In the accompanying figure, data is entered into the system once and then used throughout the
organization.
In figure 2-4 data flows within an integration information system. - Answers t
t or f: An ERP system allows data to be entered once, and then used throughout the organization. -
Answers t
t or f: An ERP module is a module that automates a specific business function. - Answers f
t or f: A company's level of data integration is highest when the company uses one vendor to supply
all of its ERP modules. - Answers t
t or f:An important consideration in minimizing the risk of fraud and abuse is defining limits on the
dollar value of business transactions that certain employees can process. - Answers t
t or f: A best practice is the best, most efficient way of handling a certain business process. - Answers t
t or f: One benefit of ERP systems is that ERP integrates people and data while eliminating the need to
update and repair many separate computer systems. - Answers t
t or f: A large company will likely spent $1 million on ERP implementation, which includes software
and training. - Answers f
t or f: Not every company is a good match with the constraints inherent in ERP. - Answers t
t or f: SAP's internal programming language is Visual Basic. - Answers f
t or f: A return on investment (ROI) is an assessment of an investment project's value, calculated by
dividing the value of the project's benefits by the project's cost. - Answers t
Individual information systems for each functional area in a company are known as:
a. silos
b. bagpipes
c. tubers
d. separated systems. - Answers a
The complex software and hardware required for ERP systems was not available until the:
a. 1960's
b. 1970's
c. 1980's
d. 1990's - Answers d
The observation that the number of transistors built onto a computer chip doubles every 18 months is
known as:
a. moore's law
b. gates prophesy
c. doubletake
d. acceleration - Answers a
When a piece of equipment's capacity is exceeded, its capacity can be increased by adding new
hardware. This is commonly known as:
a. adaptability
b. middleware
c. scalability
d. computability - Answers c
t or f: One of the four functional areas of operation is Human Resources (HR). - Answers t
t or f: Historically, businesses have had organizational structures that separated the functional areas,
but business schools have not been organized like that. - Answers f
t or f: Information systems that are designed so functional areas share data are called integrated
information system. - Answers t
t or f: Sales forecast are historical records of sales. - Answers f
t or f: The business process of Cash Flow Management in handled under the Accounting and Finance. -
Answers t
t or f: The functional are of Supply Chain Management (SCM) sets prices. - Answers f
t or f: When manufacturing runs out of raw materials, it's known as a stockout. - Answers t
t or f: To avoid stockout, manufactures might carry extra raw materials. This excess is known as safety
stock. - Answers t
t or f: Accounts receivable are recorded by Human Resources department (HR). - Answers f
t or f: The business function of government compliance falls under the Supply Chain Management
Functional area of operation. - Answers f
Which of the following is a functional area of operation?
a. packaging
b. supply chain management
c. shipping
d. baking - Answers b
Which business function is performed by accounting and finance?
a. cost allocation and control
b. taking sales orders
c. benefits
d. plant maintenance - Answers a
What are the computers, people, procedures, and software that store, organize, and deliver
information in an organization?
a. The CPU
b. The process system
c. Information system
d. Personnel systems - Answers c
Today's managers are begging to think in terms of business process. A business process cuts across
which functional areas of operation?
a. marketing and sales
b. supply chain management
c. accounting and finance
d. human resources
e. all the above - Answers e
Information systems that can be designed so that functional areas of operation share data are called:
a. integrated information systems
b. complete information system
c. non-middleware information system
d. linked information system - Answers a
Estimates of future product demands, which are the amount of a product that customer will want to
buy, are called:
a. sales forecasting
b. sales divining
c. sales diving
d. sales deriving - Answers a
Which of the following is an input to the Marketing and Sales functional area?
a. production plans
b. raw materials orders
c. per-unit cost
d. accounts payable - Answers c
,When purchasing a computer, the functional area responsible for handling the financial help for
purchasing the computer is:
a. marketing and sales
b. accounting and finance
c. supply chain management
d. human resources - Answers b
Successful business managers view their business operations from the perspective of a(n):
a. satisfied customer
b. positive cash flow
c. profitable sale
d. accurate sales forecast - Answers a
When manufacturing runs out of raw materials, it is know as a(n):
a. shortfall
b. empty shelf
c. depletion
d. stockout - Answers d
_______ can result in management overestimating in inventory.
a. bulging raw materials
b. stockup
c. safety stock
d. excess baggage - Answers c
Which of the following outputs would emerge from the Accounting and Finance functional ares?
a. packaging orders
b. sales strategy
c. regulation compliance
d. financial reports - Answers d
Which of the following is an input to HR?
a. personnel forecast
b. sales data
c. layoff and recall company policy
d. travel expense company policy - Answers a
_____________ programs are core software used by companies to coordinate information in every
area of the business. - Answers enterprise resources planning
A collection of activities that takes one or more kinds of input and creates an output that is of value to
the customer is called a(n) ________________. - Answers business process
The business functions of financial accounting, cost allocation and control, planning and budgeting,
and cash-flow management take place in the __________ functional area of operation. - Answers
accounting and finance
One example of the business function that happen in the human resources area of operation would
be __________. - Answers recruiting and hiring
A(n) ____________ includes the computer, people procedures, and software that store, organize, and
deliver information. - Answers information system
Information system designed so that functional area share data are called ________. - Answers
integrated information system
A shortfall of raw materials is know as a(n) ____________. - Answers stockout
To avoid stockout manufactures might carry extra raw materials known as _____________. - Answers
safety stock
t or f: Individual information systems for each functional area in a company are know as silos. -
Answers t
t or f:Silos of information are also know as stovepipes. - Answers t
t of f: The complex hardware and software that goes into an ERP system was not available until the
1970's. - Answers f
t of f: The capabilities of computer hardware doubling every 18 months is known as Gates Law. -
Answers f
t of f: Scalability means that the capacity of a piece of equipment can be increased by adding new
hardware. - Answers t
, t or f: The software that holds data in an organized function is known as a database management
system, or a DBMS. - Answers t
t or f: Materials requirement prediction (MRP) software allows a plant manager to plan production
and raw materials requirement by guess- timation. - Answers f
t or f: The direct computer-to-computer exchange of standard business document is known as EDI, or
electronic data interchange. - Answers t
t or f: The functional model of business and management was useful for decades and is still the
current school of thought. - Answers f
t or f: SAP expanded into international markets but kept the software in a single language, German,
and a single currency, the Euro. - Answers f
t of f: SAP's R/3 can only run on mainframe computers. - Answers f
SAP's goal was to develop a standard software production that could be configured to meet the need
of each company. - Answers t
t or f: Old system are know as legacy system. - Answers t
t or f: Open architecture encourages software companies are encouraged to develop add-on-
software. - Answers t
t or f: In the accompanying figure, data is entered into the system once and then used throughout the
organization.
In figure 2-4 data flows within an integration information system. - Answers t
t or f: An ERP system allows data to be entered once, and then used throughout the organization. -
Answers t
t or f: An ERP module is a module that automates a specific business function. - Answers f
t or f: A company's level of data integration is highest when the company uses one vendor to supply
all of its ERP modules. - Answers t
t or f:An important consideration in minimizing the risk of fraud and abuse is defining limits on the
dollar value of business transactions that certain employees can process. - Answers t
t or f: A best practice is the best, most efficient way of handling a certain business process. - Answers t
t or f: One benefit of ERP systems is that ERP integrates people and data while eliminating the need to
update and repair many separate computer systems. - Answers t
t or f: A large company will likely spent $1 million on ERP implementation, which includes software
and training. - Answers f
t or f: Not every company is a good match with the constraints inherent in ERP. - Answers t
t or f: SAP's internal programming language is Visual Basic. - Answers f
t or f: A return on investment (ROI) is an assessment of an investment project's value, calculated by
dividing the value of the project's benefits by the project's cost. - Answers t
Individual information systems for each functional area in a company are known as:
a. silos
b. bagpipes
c. tubers
d. separated systems. - Answers a
The complex software and hardware required for ERP systems was not available until the:
a. 1960's
b. 1970's
c. 1980's
d. 1990's - Answers d
The observation that the number of transistors built onto a computer chip doubles every 18 months is
known as:
a. moore's law
b. gates prophesy
c. doubletake
d. acceleration - Answers a
When a piece of equipment's capacity is exceeded, its capacity can be increased by adding new
hardware. This is commonly known as:
a. adaptability
b. middleware
c. scalability
d. computability - Answers c
