e business chapter 4 turban

Electronic Commerce 2012, 7e (Turban)Chapter 4 B2B E-Commerce

4.1 True/False

1) B2B e-commerce refers to transactions between businesses that are conducted electronically over the public Internet only. Answer: FALSEDiff: 1 Page Ref: 147

2) The availability of a secure broadband Internet platform is one of the key drivers of B2B EC.Answer: TRUEDiff: 1 Page Ref: 147

3) B2B EC marketplaces that involve one seller selling to many buyers is called an exchange. Answer: FALSEDiff: 1 Page Ref: 147

4) In one-to-many and many-to-one marketplaces, if all selling is done by one company, it is a buy-side market. Answer: FALSEDiff: 2 Page Ref: 147

5) In company-centric marketplaces, the individual company has very little control over who participates in selling or buying transactions.Answer: FALSEDiff: 2 Page Ref: 147

6) E-marketplace exchanges are usually owned and run by a third party or by a consortium. Answer: TRUEDiff: 2 Page Ref: 147

7) Market forecasters estimate that by 2012 the global B2B market, both online and offline, could reach $1 trillion.Answer: FALSEDiff: 2 Page Ref: 148

8) Businesses deal with other businesses for purposes beyond just selling or buying. One example is that of collaborative commerce, which includes communication, design, planning, and information sharing among business partners.Answer: TRUEDiff: 2 Page Ref: 148

9) Intermediaries in B2B commerce that broker transactions between buyers and sellers are third-parties that are either virtual or brick-and-mortar. Answer: TRUEDiff: 2 Page Ref: 149

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10) Spot buying refers to the purchasing of goods and services according to a schedule, usually at prevailing market prices that are determined by supply and demand.Answer: FALSEDiff: 2 Page Ref: 149

11) Stock exchanges and commodity exchanges (such as oil and sugar) are examples of spot buying.Answer: TRUEDiff: 1 Page Ref: 149

12) Strategic sourcing refers to purchasing involving long-term contracts that usually are based on private negotiations between sellers and buyers.Answer: TRUEDiff: 2 Page Ref: 149

13) Computers and communication devices are two examples of direct materials for a food processing company. Answer: FALSEDiff: 2 Page Ref: 150

14) MRO, which stands for "maintenance, repair, and operation," refers to the indirect materials used in activities that support production.Answer: TRUEDiff: 2 Page Ref: 150

15) Horizontal marketplaces are markets that concentrate on a service, material, or a product that is used in all types of industries.Answer: TRUEDiff: 2 Page Ref: 150

16) Maverick buying refers to the planning, organizing, and coordinating of all the activities pertaining to the purchasing of the goods and services necessary to accomplish the mission of an enterprise.Answer: FALSEDiff: 2 Page Ref: 162

17) Reverse auctions are one method of electronic procurement that is very popular with public organizations where tendering is usually mandatory.Answer: TRUEDiff: 3 Page Ref: 167

18) Aggregating the catalogs of all approved suppliers and combining them into a single electronic catalog is an effective solution for internal procurement because it minimizes maverick buying.Answer: TRUEDiff: 3 Page Ref: 169


19) Caltex, a multinational oil company, reduced the number of its suppliers from over 3,000 to 800 by implementing a central catalog for internal purchasing, lowering the per unit prices.Answer: TRUEDiff: 3 Page Ref: 169

20) Exchanges can be vertical or horizontal.Answer: TRUEDiff: 1 Page Ref: 172

21) By law, exchanges cannot be owned by a consortium.Answer: FALSEDiff: 3 Page Ref: 174

22) Anonymity is a key ingredient of dynamic pricing.Answer: TRUEDiff: 2 Page Ref: 175

23) A vertical portal is an exchange formed and operated by a group of major companies in an industry to provide industry-wide transaction services.Answer: FALSEDiff: 3 Page Ref: 175

24) Dynamic pricing is the rapid movement of prices over time and possibly across customers, as a result of supply and demand matching.Answer: TRUEDiff: 1 Page Ref: 175

25) Loss of customer service quality is a potential risk for buyers in B2B exchanges.Answer: TRUEDiff: 2 Page Ref: 176

26) Potential gains for sellers in B2B exchanges include less maverick buying.Answer: FALSEDiff: 3 Page Ref: 176

27) Corporate portals are major gateways through which employees, business partners, and the public can enter a corporate website.Answer: TRUEDiff: 2 Page Ref: 177

28) Executive and supervisor portals are used for training, dissemination of company news, information, and discussion groups.Answer: FALSEDiff: 3 Page Ref: 179


29) Mobile portals are accessible via mobile devices.Answer: TRUEDiff: 1 Page Ref: 179

30) Alibaba.com requires buyers to pay for sourcing.Answer: FALSEDiff: 3 Page Ref: 181

31) Creating brand awareness is an advantage of B2B social networking.Answer: TRUEDiff: 2 Page Ref: 182-183

32) Social networks are used extensively in the B2B marketplace.Answer: FALSEDiff: 3 Page Ref: 183

33) Google's OpenSocial is a programming standard that lets developers create applications that can run on a wide range of social networking platforms, which may increase B2B social networking.Answer: TRUEDiff: 2 Page Ref: 185

34) The marketing and advertising processes used for B2B and B2C are remarkably similar.Answer: FALSEDiff: 2 Page Ref: 186

35) Affiliate programs, infomediaries, and online data and text mining services are three popular B2B marketing and advertising methods.Answer: TRUEDiff: 1 Page Ref: 187


4.2 Multiple Choice

1) Key business drivers for B2B include each of the following exceptA) the availability of a secure broadband Internet platform.B) the ability to reduce delays.C) the willingness of companies to incur higher costs to improve collaboration.D) the need for collaborations between suppliers and buyers.Answer: CDiff: 1 Page Ref: 147AACSB: Use of information technology

2) E-commerce that focuses on a single company's buying needs or selling needs best definesA) computer exchange.B) business-to-business e-commerce.C) private marketplace.D) company-centric EC.Answer: DDiff: 2 Page Ref: 147

3) Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other best describesA) exchanges.B) public market.C) company-centric EC.D) spot purchases.Answer: ADiff: 1 Page Ref: 147

4) B2B transactions that involve communication, design, planning, information sharing, and activities beyond financial transactions among business partners definesA) exchanges.B) collaborative commerce.C) trading communities.D) public marketplaces.Answer: BDiff: 3 Page Ref: 148AACSB: Use of information technology

5) An online third party that brokers a transaction online between a buyer and a seller best describesA) strategic source.B) horizontal marketplace.C) vertical marketplace.D) online intermediary.Answer: DDiff: 2 Page Ref: 149AACSB: Use of information technology


6) Types of B2B transactions includeA) strategic sourcing.B) randomized buying.C) intermediation.D) reverse purchasing.Answer: ADiff: 2 Page Ref: 149

7) The purchase of goods and services as they are needed, usually at prevailing market prices, best definesA) direct materials.B) consolidation.C) spot buying.D) strategic sourcing.Answer: CDiff: 2 Page Ref: 149AACSB: Use of information technology

8) Purchases of goods and services based on long-term contracts best definesA) direct materials.B) consolidation.C) spot buying.D) strategic sourcing.Answer: DDiff: 2 Page Ref: 149AACSB: Use of information technology

9) Which of the following can be supported more effectively and efficiently through direct buyer-seller negotiations?A) strategic sourcingB) spot buyingC) B2C e-commerceD) MROAnswer: ADiff: 2 Page Ref: 150AACSB: Use of information technology

10) Materials used in the production of a product best definesA) indirect materials.B) direct materials.C) MRO materials.D) production materials.Answer: BDiff: 2 Page Ref: 150


11) Two types of materials and supplies that are traded in B2B areA) digital and physical.B) direct and indirect.C) horizontal and vertical.D) commodities and nonproduction.Answer: BDiff: 1 Page Ref: 150AACSB: Use of information technology

12) Materials used to support production are calledA) indirect materials.B) operational materials.C) direct materials.D) virtual materials.Answer: ADiff: 2 Page Ref: 150AACSB: Use of information technology

13) The major B2B service industries include each of the following exceptA) travel and hospitality services.B) financial services.C) banking and online financing.D) retail.Answer: DDiff: 2 Page Ref: 151-152AACSB: Use of information technology

14) Which of the following is not one of the major benefits of B2B for both buyers and sellers?A) expedites processing and reduces cycle timeB) reduces procurement costsC) enables customized online catalogs with different prices for different customersD) increases opportunities for collaborationAnswer: BDiff: 3 Page Ref: 153AACSB: Use of information technology

15) A business strategy that focuses on providing comprehensive quality service to business partners best definesA) customer relationship management.B) supplier relationship management.C) partner relationship management.D) supply chain management.Answer: CDiff: 3 Page Ref: 153


16) A comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services it uses best definesA) customer relationship management.B) supply chain management.C) partnership relationship management.D) supplier relationship management.Answer: DDiff: 3 Page Ref: 153

17) All are benefits of B2B except A) creates new sales or purchase opportunities.B) eliminates paper and reduces administrative costs.C) increases channel conflict.D) lowers search costs and time for buyers to find products and vendors.Answer: CDiff: 1 Page Ref: 153AACSB: Use of information technology

18) A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet, describesA) sell-side e-commerce.B) single-side e-commerce.C) buy-side e-commerce.D) reflective e-commerce.Answer: ADiff: 1 Page Ref: 154AACSB: Use of information technology

19) Several benefits of Microsoft's ________ are that distributors can check inventory, make transactions, and look up the status of their orders, significantly reducing the number of phone calls, e-mails, and incorrect product shipments.A) extranet-based order-entry toolB) electronic data interchangeC) customized catalogD) auto-responderAnswer: ADiff: 3 Page Ref: 155AACSB: Use of information technology


20) High-quality bicycle manufacturer Gregg's Cycles does not sell its products online, nor do they allow their bicycles to be sold online by others. By not selling online, Gregg's Cycles avoids ________ with its dealers and the independent bike shops that sell its bikes.A) pricing conflictB) channel conflictC) multichannel distributionD) disintermediationAnswer: BDiff: 2 Page Ref: 155AACSB: Use of information technology

21) Benefits of using a third-party hosting company for conducting B2B auctions instead of developing an auction site in-house include all of the following exceptA) no hiring costs.B) no redeployment of corporate resources.C) time-to-market of several weeks.D) no need for additional resources such as hardware, bandwidth, or IT personnel.Answer: CDiff: 3 Page Ref: 160AACSB: Use of information technology

22) Companies use ________ to sell their unneeded assets for quick disposal or to dispose of excess, obsolete, and returned products.A) private auctionsB) liquidationC) reverse auctionsD) forward auctionsAnswer: DDiff: 2 Page Ref: 160AACSB: Use of information technology

23) A characteristic that describes customer loyalty to a site that eventually results in higher revenue best definesA) retention.B) acquisition.C) stickiness.D) attachment.Answer: CDiff: 2 Page Ref: 160


24) A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method best definesA) desktop procurement method.B) buy-side e-marketplace.C) intermediary.D) aggregated catalog.Answer: BDiff: 3 Page Ref: 162AACSB: Use of information technology

25) The planning, organizing, and coordinating of all the activities relating to purchasing goods and services needed to accomplish the organization's mission best definesA) buy-side e-marketplace.B) supply chain management.C) procurement management.D) customer relationship management.Answer: CDiff: 2 Page Ref: 162

26) Unplanned purchases of items needed quickly, often at non-prenegotiated higher prices, best definesA) impulse purchases.B) free market.C) MRO purchasing.D) maverick buying.Answer: DDiff: 2 Page Ref: 162

27) Major procurement methods includeA) buying at an exchange or industrial mall.B) buying at private or public auction sites in which the organization participates as one of the buyers.C) buying directly from manufacturers, wholesalers, or retailers from their catalogs, and possibly by negotiation.D) all of the above.Answer: DDiff: 1 Page Ref: 163

28) The electronic acquisition of goods and services for organizations via the Internet or private network best definesA) e-procurement.B) spot buying.C) resource acquisition.D) MRO planning.Answer: ADiff: 1 Page Ref: 163


29) Using Internet technology to buy goods and services from a number of known or unknown suppliers best definesA) e-reverse auctioning.B) e-tendering.C) e-sourcing.D) e-informing.Answer: ADiff: 2 Page Ref: 165

30) Types of e-procurement includeA) E-MRO.B) E-market sites.C) E-informing.D) all of the above.Answer: DDiff: 1 Page Ref: 165-166

31) Gathering and distributing purchasing information both from and to internal and external parties using Internet technology best definesA) e-tendering.B) e-informing.C) e-sourcing.D) e-MRO.Answer: BDiff: 2 Page Ref: 166

32) E-procurement benefits include each of the following exceptA) reducing the number of suppliers.B) ensuring delivery on time, every time.C) ease of internal and external integration.D) improving information flow and management.Answer: CDiff: 3 Page Ref: 166

33) E-procurement limitations and challenges include each of the following exceptA) the technology needs to be updated frequently.B) the system may be too complex.C) the cost may be too high.D) the ease of getting suppliers to cooperate electronically.Answer: DDiff: 3 Page Ref: 167


34) Which of the following is the unplanned, emergency-type buying where buyers usually pay more?A) maverick buyingB) spot buyingC) impulse purchasingD) extreme purchasingAnswer: ADiff: 2 Page Ref: 169

35) Advantages of using internal catalogs includeA) decreasing the number of suppliers.B) easy financial controls.C) using search engines to look through internal catalogs.D) all of the above.Answer: DDiff: 1 Page Ref: 169

36) The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog definesA) bartering exchange.B) buy-side e-marketplace.C) sell-side e-marketplace.D) internal procurement marketplace.Answer: DDiff: 3 Page Ref: 169AACSB: Use of information technology

37) An example of a successful aggregation of suppliers' catalogs is that of ________, which aggregates more than 10,000 items from the catalogs of approved suppliers into an internal electronic catalog.A) MasterCard InternationalB) Amazon.comC) GoogleD) Priceline.comAnswer: ADiff: 2 Page Ref: 169AACSB: Use of information technology

38) Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department best definesA) spot buying.B) desktop purchasing.C) maverick buying.D) renegade purchasing.Answer: BDiff: 2 Page Ref: 170


39) With a bartering exchange, a company submits its surplus to the exchange and receivesA) points of credit, which the company can then use to buy items that it needs.B) an equivalent amount of products or services.C) interest payments until it buys something from the exchange.D) cash minus a small commission for services.Answer: ADiff: 2 Page Ref: 171AACSB: Use of information technology

40) B2B portals that focus on a single industry or industry segment best describesA) local portals.B) information portals.C) vortals.D) collaborative portals.Answer: CDiff: 3 Page Ref: 176

41) Portals that store data and enable users to navigate and query these data areA) collaborative portals.B) information portals.C) mobile portals.D) MRO portals.Answer: BDiff: 2 Page Ref: 179

42) The main uses of social networks includeA) reducing the number of suppliers.B) encouraging maverick purchases.C) learning useful business intelligence.D) driving traffic to online Web properties.Answer: CDiff: 2 Page Ref: 184

43) Which of the following companies uses viral videos to promote renewals of Care Pack Service agreements?A) Reed Business InformationB) Cisco SystemsC) Arketi GroupD) Hewlett-PackardAnswer: DDiff: 2 Page Ref: 184


44) Marketing by manufacturers and wholesalers along the sell-side of the supply chain best definesA) B2C marketing.B) B2B marketing.C) M2W marketing.D) M2B purchasing.Answer: BDiff: 2 Page Ref: 185

45) Denver Boards, a B2B manufacturer of snowboard equipment, can reach and target new retail customers in order to grow its online business byA) hiring an affiliation service to drive traffic to its Web site.B) reviewing POS data.C) mining data.D) advertising in traditional media.Answer: ADiff: 3 Page Ref: 187

4.3 Essay

1) List and briefly describe the four basic types of B2B transactions and activities. Answer: The four basic types of B2B transactions and activities are sell-side, buy-side, exchanges, and supply chain improvements and collaborative commerce. While sell-side refers to one seller to many buyers, buy-side refers to one buyer from many sellers. Exchanges involve many sellers to many buyers. Supply chain improvements and collaborative commerce refers to activities, other than buying or selling, among business partners, such as supply chain improvements, communication, collaboration, and information sharing for joint design and planning.Diff: 1 Page Ref: 147-148

2) List five major benefits of B2B for buyers or sellers or both.Answer: Major benefits of B2B for buyers, sellers, or both include (1) creating new sales or purchase opportunities; (2) eliminating paper and reducing administrative costs; (3) expediting processing and reducing cycle time; (4) lowering search costs and time for buyers to find products and vendors; (5) increasing productivity of employees dealing with buying and/or selling; (6) reducing errors and improving quality of services; (7) making product configuration easier; (8) reducing marketing and sales costs for sellers; (9) reducing inventory levels and costs; (10) enabling customized online catalogs with different prices for different customers; (11) increasing production flexibility, permitting just-in-time delivery; (12) reducing procurement costs for buyers; (13) facilitating customization via configuration; (14) providing for efficient customer service; and (15) increasing opportunities for collaboration.Diff: 2 Page Ref: 153


3) Identify five of the seven types of e-procurement.Answer: E-sourcing, e-tendering, e-reverse auctioning, e-informing, web-based ERP, e-market sites, and e-MRO are seven types of e-procurement.Diff: 2 Page Ref: 165-166

4) What are the three major functions of exchanges? Answer: The three major functions of exchanges are matching buyers and sellers, facilitating transactions, and maintaining exchange policies and infrastructure.Diff: 1 Page Ref: 173

5) List five generic types of portals.Answer: The five generic types of portals are portals for suppliers and other partners, customer portals, employee portals, executive and supervisor portals, and mobile portals.Diff: 1 Page Ref: 178-179


e business chapter 4 turban

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