Sample Chapter

INSTANT DOWNLOAD COMPLETE TEST BANK WITH ANSWERS

Test Bank Of Concepts in Enterprise Resource Planning 4th Edition by Ellen Monk

 

SAMPLE QUESTIONS

 

Chapter 3: Marketing Information Systems and the Sales Order Process

 

TRUE/FALSE

 

  1. In SAP R/3, relatively permanent data about customers is kept in the Customer Master Data table.

 

ANS:  T                    PTS:   1                    REF:   61

 

  1. In SAP R/3, relatively permanent data about inventory is kept in the Material Master Data table.

 

ANS:  T                    PTS:   1                    REF:   61

 

  1. In SAP R/3, relatively permanent data in the Material Master Data table is available to only one module, the Materials Management module.

 

ANS:  F                    PTS:   1                    REF:   61

 

  1. In SAP R/3, relatively permanent data about customers in the Customer Master Data table is available to only the Sales and Distribution module.

 

ANS:  F                    PTS:   1                    REF:   61

 

  1. SAP R/3’s system allows one to group customers, which is commonly known as an “organizational structure”.

 

ANS:  T                    PTS:   1                    REF:   61

 

  1. In SAP R/3, the linked set of document numbers is called the “document flow”.

 

ANS:  T                    PTS:   1                    REF:   63

 

  1. In SAP R/3 the electronic evidence of a transaction is called a document.

 

ANS:  T                    PTS:   1                    REF:   56

 

  1. The first step in the SAP ERP sales and distribution process is the Sales Order Processing step.

 

ANS:  F                    PTS:   1                    REF:   56

 

  1. Pricing cannot be set or configured in the SAP ERP system.

 

ANS:  F                    PTS:   1                    REF:   56

 

  1. Pricing can be set using condition techniques.

 

ANS:  T                    PTS:   1                    REF:   64

 

  1. CRM software stands for Custom Resource Management.  This is a specialized type of ERP.

 

ANS:  F                    PTS:   1                    REF:   66

 

  1. Global ATP allows for searching of a particular product at multiple plants worldwide.

 

ANS:  T                    PTS:   1                    REF:   71

 

  1. Returned products to a company are processed more efficiently if the customer first calls for a RMA.

 

ANS:  T                    PTS:   1                    REF:   55

 

  1. An inquiry in the SAP ERP system occurs in the Delivery step of the Sales and Distribution cycle.

 

ANS:  F                    PTS:   1                    REF:   56

 

  1. 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:  T                    PTS:   1                    REF:   57

 

  1. The PO Number is a number assigned by a company to track orders in the SAP ERP system.

 

ANS:  F                    PTS:   1                    REF:   58

 

  1. With on-demand CRM, the software and computer equipment reside with the CRM provider; it is not installed in-house.

 

ANS:  T                    PTS:   1                    REF:   67

 

MULTIPLE CHOICE

 

  1. In SAP ERP the electronic evidence of a transaction is called a(n) ____.
a. trail d. audit number
b. marker e. document
c. tag

 

 

ANS:  E                    PTS:   1                    REF:   56

 

  1. A customer calls up to find out how much 1000 units of a product would cost. This is an example of ____ in the sales and distribution process.
a. presales activities d. delivery and billing
b. sales order processing e. payment
c. inventory sourcing

 

 

ANS:  A                    PTS:   1                    REF:   56

 

  1. A customer is granted a 10% price discount in a large order. This is an example of an activity in ____ in the sales and distribution process.
a. presales activities d. delivery and billing
b. sales order processing e. payment
c. inventory sourcing

 

 

ANS:  B                    PTS:   1                    REF:   56

 

  1. A customer’s order is checked to see if it can be produced and delivered by the requested date. This is an example of ____ in the sales and distribution process.
a. presales activities d. delivery and billing
b. sales order processing e. payment
c. inventory sourcing

 

 

ANS:  C                    PTS:   1                    REF:   57

 

  1. A customer’s documents are released to the warehouse so that the goods can be gathered, packed and boxed. This is an example of ____ in the sales and distribution process.
a. presales activities d. delivery and billing
b. sales order processing e. payment
c. inventory sourcing

 

 

ANS:  D                    PTS:   1                    REF:   57

 

  1. A customer’s remittance causes Cash to be debited and Accounts Receivable to be credited. This is an example of ____ in the sales and distribution process.
a. presales activities d. delivery and billing
b. sales order processing e. payment
c. inventory sourcing

 

 

ANS:  E                    PTS:   1                    REF:   57

 

  1. In SAP ERP, the history of a transaction (such as a sales order) can be researched by looking at its ____.
a. trail mix d. material master data
b. transaction index e. sales master data
c. document flow

 

 

ANS:  C                    PTS:   1                    REF:   63

 

  1. What kind of software can give top management an overview of a company’s complete relationship with a customer?
a. One to One Marketing Software
b. Open Relationship Software
c. Denouement Software
d. Customer Relationship Management Software
e. Supply Chain Management Software

 

 

ANS:  D                    PTS:   1                    REF:   67

 

  1. In the sales order process, there is a number used in the SAP ERP sales order that in a paper process would be pre-printed on the sales document, usually in sequential number order.  It’s assigned by the customer to the sales order.  What is this number?
a. Customer ID c. Material Number
b. Purchase Order Number d. Billing Code

 

 

ANS:  B                    PTS:   1                    REF:   58

 

  1. Setting prices for customers can be very complex.  SAP helps by offering a control mechanism, called ____, to determine how much to charge a given customer for a given product.
a. pricing variance c. condition technique
b. price fixing d. fluctuation

 

 

ANS:  C                    PTS:   1                    REF:   64

 

  1. The ____ system communicates with SAP ERP, BW, and APO systems in developing and executing its plans.
a. PPO c. CRM
b. SSA d. GUp

 

 

ANS:  C                    PTS:   1                    REF:   69

 

  1. What software can automatically route customers who contact the company to a sales representative? Companies can use this software to forecast customer needs.
a. Marketing encyclopedias c. One-to-one marketing
b. Sales campaign management d. Sales force automation

 

 

ANS:  D                    PTS:   1                    REF:   67

 

  1. The SAP ERP system allows users to define various ways to group customers and salespeople.  These groups are called ____.
a. organizational structures c. document flows
b. master data d. audit trails

 

 

ANS:  A                    PTS:   1                    REF:   61

 

  1. In ____ CRM, the software and equipment reside with the CRM provider; it is not installed in-house.
a. walk-up c. Internet
b. on-demand d. ERP

 

 

ANS:  B                    PTS:   1                    REF:   67

 

  1. Which of the following are benefits to CRM?
a. Lower costs
b. Higher revenue
c. Improved strategy and performance measurement
d. All of the above

 

 

ANS:  D                    PTS:   1                    REF:   72

 

COMPLETION

 

  1. The goal of ____________________ software is to provide a “single face to the customer.”

 

ANS:

customer relationship management

CRM

customer relationship management (CRM)

CRM (customer relationship management)

 

PTS:   1                    REF:   67

 

  1. With global____________________, the R/3 system automatically checks all facilities and determines the most cost-efficient facility to use to meet the customer’s request in terms of ordering and delivering goods.

 

ANS:

ATP

Available-To-Promise

available to promise

 

PTS:   1                    REF:   71

 

SHORT ANSWER

 

  1. Briefly describe four kinds of decisions made by Marketing managers.

 

ANS:

What products should we produce?

How much of each product should we produce?

How are our products best promoted and advertised?

How should our products be distributed for maximum customer satisfaction?

What price should we charge for our products?

 

PTS:   1                    REF:   50

 

  1. In SAP ERP a sales order is entered only once, by the sales people. It need not be entered a second time, in Accounting, to keep the books. Briefly explain why that second entry is not needed in SAP R/3.

 

ANS:

By contrast, ERP systems integrate Accounting with all business processes, so that when a sales order is recorded, the related accounting data is updated automatically.

 

PTS:   1                    REF:   65

 

  1. Briefly describe two CRM activities.

 

ANS:

One-to-one marketing: Once a customer is categorized, the company can tailor products, promotions, and pricing accordingly.

Sales force automation: Occurrences of customer contacts are logged in the company’s database.

Sales campaign management: This software lets a company organize a marketing campaign and compile its results.

Marketing Encyclopedias: This software serves as a database of promotional literature about products.

Call center automation: When customers call a company to get assistance with a company’s products, representatives can query a knowledge management database containing information about the product.

 

PTS:   1                    REF:   67-68

 

  1. What does the term Delivery mean in the SAP R/3 system?

 

ANS:

In the SAP R/3 system, the word delivery means releasing the documents that the warehouse uses to pick, pack, and ship orders, rather than the traditional use of the term to describe the transferal of goods.

 

PTS:   1                    REF:   57

 

  1. What are the three benefits of CRM?

 

ANS:

Lower costs

Higher revenue

Improved strategy and performance measurement

 

PTS:   1                    REF:   72

 

 

Figure 3-1  The sales process at Fitter Snacker

 

  1. Describe the problems with the Fitter Snacker sales orders and quotations, as illustrated in the accompanying figure.

 

ANS:

Salesperson might make arithmetic error in quote.

Fax to home office may arrive be illegible

Fax to home office might not arrive before customer has called in order

Therefore, in-office clerk has no knowledge of order, terms of order.

 

PTS:   1                    REF:   52

 

  1. Describe the problems with the Fitter Snacker Credit Check, as illustrated in the accompanying figure.

 

ANS:

Because the credit report is sent infrequently to the sales department, the credit report might be very out-of-date.  This would then result in either granting credit to a customer who has exceeded their credit limit, or denying credit to a customer who is below their credit limit.

 

PTS:   1                    REF:   52

 

  1. In the Fitter Snacker sales system, as illustrated in the accompanying figure, ideally, how should returns be handled?

 

ANS:

Returns should be marked with an RMA – return material authorization, before being shipped back to Fitter Snacker.  This is to ensure proper credit on the customer’s account and order.

 

PTS:   1                    REF:   52

 

 

  1. In the accompanying diagram, “Taking an Order in SAP ERP,” what is A?

 

ANS:

Sold-to party: where the customer’s identification number is entered.

 

PTS:   1                    REF:   58

 

  1. In the accompanying diagram, “Taking an Order in SAP ERP,” what is B?

 

ANS:

PO Number: The number assigned by the customer to this sales order.

 

PTS:   1                    REF:   58

 

  1. In the accompanying diagram, “Taking an Order in SAP ERP,” what is C?

 

ANS:

Required Delivery Date: The date when the customer would like to receive the order.

 

PTS:   1                    REF:   58

 

  1. In the accompanying diagram, “Taking an Order in SAP ERP,” what is D?

 

ANS:

Material and Order quantity: What the customer is ordering.

 

PTS:   1                    REF:   58

 

  1. What is one-to-one marketing?

 

ANS:

Once a customer is categorized, the company can tailor products, promotions, and pricing accordingly.  Customers can be offered products related to what they are now buying (cross-selling) or higher-margin products in the same line (up-selling).

 

PTS:   1                    REF:   67

 

ESSAY

 

  1. Describe the problems with Fitter Snacker’s sales quotations and orders.

 

ANS:

Giving a customer a price quotation and then taking the customer’s order should be a straightforward process, but at Fitter it is not. For a new customer, the sales process begins with a sales call, which might be over the telephone or in person. At the end of the sales call, the salesperson prepares a handwritten quotation on a form that generates two copies. The original quotation goes to the customer, and the middle copy is first faxed and then mailed to the sales office; the salesperson keeps the bottom copy for his or her records. On the quotation form is a toll-free number that the customer can call to place an order.

A number of problems can occur with this process, including the following:

  • The salesperson might make an error in the sales quotation. For example, a salesperson in the Direct Sales Division might offer both a quantity discount and a discretionary discount. If the salesperson is not careful, the two discounts combined might be so deep that the company makes little or no profit on the order.
  • Salespeople fax a copy of their sales quotations to the sales office, but sometimes a customer calls to place an order before the fax is transmitted. In such cases, the sales clerk has no knowledge of the terms of the sale (which are outlined on the quotation) and must ask the customer to repeat the information. On the other hand, even if the quotation has been faxed, the data might not have been entered into the customer database, so the customer might still need to repeat the order information. This situation can also lead to a duplicate order.
  • The fax received by the sales office is a copy of a handwritten form, and might not be legible.

When customers place an order, they usually inquire about the delivery date. To get a shipping date, the sales clerk must contact the warehouse supervisor and ask whether the customer’s order can be immediately shipped from inventory, or whether shipping will be delayed until a future production run is delivered to the warehouse. However, because the warehouse supervisor is generally too busy to get an updated inventory count, total all the orders waiting to be filled, and find out how many other orders are in process in the sales office, she can only estimate the shipping date.

Once the sales clerk has the warehouse supervisor’s estimated shipping date, she determines the shipping method and how long delivery will take. Next, the clerk checks the customer’s credit status. For new customers, the clerk fills out a paper credit-check form that includes basic customer data and the amount of the order. The form goes to Accounting, where accountants perform the credit check and then return the credit-check form showing the customer’s credit limit. If the order is from an existing customer, the clerk checks a paper report from Accounting that shows the customer’s current balance, credit limit, and available balance. However, because the report is generated weekly, it might not reflect a customer’s most recent payments or orders. If a customer’s available credit is less than the amount of the current order, assuming there are no other orders outstanding, the clerk calls the customer to determine what action the customer wants to take (reduce the amount of the order, prepay, or dispute the amount of credit granted).

Once the order details have been finalized, the sales clerk enters the order into the order-entry system. The computer program performs four important tasks. First, it stores the customer’s order data, which are used later to analyze sales performance at the division level. Second, it prints out a packing list and shipping labels for the warehouse to use to pick, pack, and ship the customer’s order. Third, it produces a data file of all current transactions for the Accounting Department to use for preparing invoices (this file is also used for financial, tax, and managerial accounting, which is discussed in Chapter 5). And fourth, the data file is copied to a USB key each evening for uploading into the company’s PC-based accounting system.

 

PTS:   1                    REF:   53

 

  1. Describe the problems with Fitter Snacker’s order filling.

 

ANS:

Fitter’s process for filling an order is no more efficient than its sales order process. Packing lists and shipping labels are printed in the sales department twice a day—at noon and at the end of the day. These are carried by hand to the warehouse, where they are manually sorted into small orders and large orders.

The Production Department produces and wraps the snack bars and packs them in display boxes, 24 bars to a box. The display boxes have promotional printing and are designed to serve as a display case. Fitter packs 12 display boxes together to form a standard shipping case. The warehouse stores both individual display boxes and shipping cases, organized by label type (Fitter brand and store brand), so depending on the inventory levels Marketing Information Systems and the Sales Order Process in the warehouse, Production personnel might transfer individual display boxes directly to the warehouse, or they might first pack the display boxes into shipping cases.

For small orders (less than a full shipping case), the order picker goes to the warehouse with a handcart and pulls the number of display boxes listed on the packing list. If there are not enough individual display boxes in the warehouse to fill the order, the picker might break open a shipping case to get the required number of display boxes. If he does this, he is supposed to advise the warehouse supervisor so she can update the inventory records—but sometimes this step is overlooked.

The picker then brings the display boxes back to the small-order packing area, where they are packed into a labeled box—with the packing list enclosed—and prepared for shipping by a small package shipper.

For large orders (one or more shipping cases), the picker uses a forklift to move the appropriate number of shipping cases to the large-order packing area. Workers label them for shipping, load them on a pallet, and attach them to the pallet with shrink-wrap plastic for protection. These pallets are shipped either by one of Fitter’s two delivery trucks or by a less-than-truckload (LTL) common carrier.

Fitter uses a PC database program to manage inventory levels in the warehouse. The program adjusts inventory level figures on a daily basis, using data from production records (showing what has been added to the warehouse), packing lists (showing what has been shipped from the warehouse), and any additional sources of data (such as shipping cases that have been opened to pull display boxes). Each month the warehouse staff conducts a physical inventory count to compare the actual inventory on hand with what the inventory records in the database show. Fitter’s monthly inventory counts show that inventory records are more than 95 percent accurate. Although 95 percent accuracy may not sound too bad, having 5 percent errors means that Fitter regularly has problems filling orders.

Because snack bars are somewhat perishable, Fitter keeps inventory levels fairly low. Inventory levels change rapidly during the day, and Fitter’s current system does not provide a good method for checking inventory availability. As a result, a picker might go to the shelves to pick an order and discover that there are not enough snack bars to fill the order. In this case, there are several possible outcomes:

  • There might be more of that type of bar in the production area—ready to be transferred to the warehouse—in which case the picker could wait until the inventory is received into the warehouse to finish picking the order.
  • For an important customer that purchases store-branded snack bars, production might change the wrappers and display box labels currently on the production line to the customer’s brand to produce enough bars to complete the order.
  • In other situations, the customer may be willing to take a partial shipment consisting of whatever is on hand, with the rest shipped when it becomes available—which is known as a backorder.
  • Or, the customer might prefer to take the goods on hand, cancel the balance of the order, and place a new order later.
  • If the customer’s company has enough inventory on hand, the customer may prefer to wait until the whole order can be shipped, thus saving on delivery charges.

To determine what to do in this situation, the order picker might have conversations with the warehouse supervisor, production supervisor, and sales clerks. Whatever the final decision, the warehouse supervisor has to contact the sales clerk so she can notify the customer (which does not always happen when things are busy) and the Accounting Department so they can change the invoice.

 

PTS:   1                    REF:   53-54

 

  1. Describe the problems with Fitter Snacker’s accounting and invoicing.

 

ANS:

Invoicing the customer is problematic as well. First, the data from the current order-entry system is only loaded into the accounting system at the end of each day, so the Accounting Department does not have information on new sales orders until the following day. In addition, clerks must manually make adjustments in both the order-entry system and the accounting system for partial shipments and for any other changes that have occurred during the order-fulfillment process. Many times these corrections are not made in both systems, causing discrepancies that must be corrected at the end of the month, at which point it is more difficult for the parties involved to remember what happened. Delayed order corrections also sometimes result in late or inaccurate invoices. If the completed invoice is waiting to be mailed when the warehouse notifies Accounting of a partial shipment, then a new invoice must be prepared. In any case, an invoice is eventually sent to the customer, separate from the shipment.

 

PTS:   1                    REF:   54

 

  1. Describe the problems with Fitter Snacker’s payment and returns.

 

ANS:

Fitter’s procedure for processing payments often yields frustrating results for customers. Almost all customers pay the invoice within 10 days to receive the 2 percent discount. If any errors have occurred in the sales or order-fulfillment process—from the original quotation to entering the order into the sales order program to filling the order in the warehouse—the customer will receive an incorrect invoice. Even though Fitter provides customers with two invoice copies, many customers do not return a copy of the invoice with their payment, as instructed. Errors sometimes result in the incorrect customer’s account being credited.

Fitter’s returns processing is also flawed. Because Fitter’s snack bars contain no preservatives, they have a relatively short shelf life. Thus, the company has a policy of crediting customer accounts for returned snack bars that have exceeded their “sell by” date (this is a generous policy, because it is impossible to know who—Fitter or the customer—is responsible for the bars not selling before they expire). Fitter also gives credit for damaged or defective cases returned by customers. Customers are supposed to call Fitter to get a returned material authorization (RMA) number to simplify the crediting process. When cases are returned to Fitter, the Receiving Department completes a handwritten returned material sheet, listing the returning customer’s name, the materials returned, and the RMA number. However, many customers do not call for the RMA number, or fail to include it with their returned material, which makes it more difficult for the Accounting Department to credit the appropriate account. Poor penmanship on the returned material sheet also creates problems for Accounting.

When an account becomes past due, Fitter sends a dunning letter, which is the term for a letter notifying a customer that their account is past due and requesting payment if payment has not already been sent. As the account gets more delinquent, the dunning letters usually get more direct and threatening. If a customer’s account has not been properly credited, however, the customer may receive a dunning letter in error, or may receive a call about exceeding their credit limit after placing a new order. Such situations damage goodwill with both new and repeat customers.

 

PTS:   1                    REF:   55