OMIS 3500 Study Guide

What does ERP stand for?

Enterprise Resource Planning

Function of an ERP system

Integrates core business processes (finance, HR, manufacturing, sales, supply chain) into one system with a shared database

Business value of ERP

Better efficiency, less duplicated data, real-time visibility across departments, and better decision making

How is AI used in ERP?

Predictive forecasting, automating routine tasks, anomaly and fraud detection, and chatbots or assistants for users

Best practices

Proven methods, techniques, and guidelines that are the most efficient and effective way to achieve a goal

What does SCM stand for?

Supply Chain Management

Function of an SCM system

Manages the flow of goods, information, and money from suppliers through production to customers

Upstream portion of the supply chain

Suppliers and the organizations that provide materials and components to the company

Internal portion of the supply chain

The company's own processes that turn inputs into finished goods (production, packaging, assembly, storage)

Downstream portion of the supply chain

Distribution and delivery of finished products to customers

Business value of SCM

Lower inventory and costs, faster delivery, better forecasting, and better coordination with suppliers

How is AI used in SCM?

Demand forecasting, route optimization, inventory management, and spotting supply chain risks or disruptions

Just-in-time strategy

A scheduling system that minimizes inventory by having components arrive exactly when needed and finished goods shipped as soon as they leave the assembly line

Safety stock

A buffer of inventory to deal with lack of flexibility and uncertainties in the supply chain

Bullwhip effect

A distortion of information about demand for a product as it passes from one entity to the next across the supply chain

Example of the bullwhip effect

A small change in consumer demand causes larger and larger swings in orders at each step further upstream

What does CRM stand for?

Customer Relationship Management

Function of a CRM system

Captures and integrates customer data from all touchpoints to manage and improve customer relationships

Three components of CRM

Marketing, sales, and customer service

Business value of CRM

Better customer retention and satisfaction, more targeted marketing, and higher sales

How is AI used in CRM?

Chatbots, personalized recommendations, predictive lead scoring, and predicting customer churn

Churn rate

The rate or number of customers who stop using or purchasing products or services from a company

The eight unique features of e-commerce

Ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, social technology

Ubiquity (e-commerce)

Available everywhere and at any time, so the market is not limited to a physical place

Global reach (e-commerce)

Commerce extends across national boundaries to a huge potential audience

Universal standards (e-commerce)

One set of technology standards (internet standards) shared by all nations

Richness (e-commerce)

Ability to deliver video, audio, and text in one message

Interactivity (e-commerce)

The technology allows two-way communication between merchant and consumer

Information density (e-commerce)

The technology increases the quantity and quality of information available to all market participants

Personalization/customization (e-commerce)

Messages and products can be tailored to individuals

Social technology (e-commerce)

Supports user-generated content and social networking

Marketspace vs. marketplace

A marketspace is virtual (online) while a marketplace is a physical location

Digital good

A good delivered over the internet and not shipped (e.g., streaming video, e-books, software downloads)

Menu costs

The cost to merchants of changing prices (reduced in digital markets)

Search costs

The effort and money it takes consumers to find products and compare prices (reduced in digital markets)

Information asymmetry

When one party in a transaction has more information than the other (reduced in digital markets)

Dynamic pricing

Prices that change in real time based on demand, customer, or market conditions (enabled by digital markets)

Disintermediation

Removing intermediaries (middlemen) from a transaction so customers benefit from lower prices

Business-to-consumer (B2C)

A business sells to individual consumers (e.g., Amazon selling to shoppers)

Business-to-business (B2B)

A business sells to other businesses (e.g., a supplier selling parts to a manufacturer)

Consumer-to-consumer (C2C)

Consumers sell to other consumers, often through a platform (e.g., eBay)

The six e-commerce revenue models

Advertising, sales, subscription, free/freemium, transaction fee, affiliate

Advertising revenue model

Revenue from fees for placing ads on a site (e.g., Google)

Sales revenue model

Revenue from selling goods, information, or services directly to customers (e.g., Amazon)

Subscription revenue model

Customers pay a recurring fee for ongoing access to content or services (e.g., Netflix)

Free/freemium revenue model

Basic services are free and premium features cost money (e.g., Spotify)

Transaction fee revenue model

Revenue from a fee for enabling or executing a transaction (e.g., PayPal, eBay)

Affiliate revenue model

Revenue from referring customers to other sites and getting a commission (e.g., Amazon Associates)

All of the following are unique features of e-commerce EXCEPT: A) Ubiquity B) Global reach C) Physical presence D) Interactivity

C) Physical presence

Which is NOT one of the eight unique features of e-commerce? A) Richness B) Information density C) Social technology D) Proprietary standards

D) Proprietary standards (e-commerce has UNIVERSAL standards)

All of the following are e-commerce business models EXCEPT: A) Business to consumer B) Business to business C) Consumer to consumer D) Employee to employee

D) Employee to employee

All of the following are e-commerce revenue models EXCEPT: A) Advertising B) Subscription C) Affiliate D) Shareholder dividends

D) Shareholder dividends

All of the following are effects of digital markets EXCEPT: A) Reduced search costs B) Reduced information asymmetry C) Dynamic pricing D) Increased menu costs

D) Increased menu costs (menu costs are reduced)

Which is NOT an example of a digital good? A) Streaming movie B) E-book C) Software download D) Printed textbook mailed to you

D) Printed textbook mailed to you (digital goods are delivered over the internet, not shipped)

Which is NOT one of the three components of CRM? A) Marketing B) Sales C) Customer service D) Manufacturing

D) Manufacturing

Which is NOT a portion of the supply chain? A) Upstream B) Internal C) Downstream D) Lateral

D) Lateral

Which is NOT an example of an upstream supply chain activity? A) Buying raw materials from suppliers B) Receiving components from a vendor C) Delivering finished goods to retailers D) Selecting suppliers

C) Delivering finished goods to retailers (that is downstream)

Which best describes just-in-time? A) Holding large inventory B) Components arrive exactly when needed C) Ordering extra as a buffer D) Producing before orders arrive

B) Components arrive exactly when needed

Which is an example of safety stock? A) Extra inventory held to protect against uncertainty B) Components arriving at the moment of assembly C) A forecast of demand D) A discount on slow items

A) Extra inventory held to protect against uncertainty

The bullwhip effect is best described as: A) Lower prices from disintermediation B) Distorted demand information as it moves up the supply chain C) Customers leaving a company D) A buffer of extra inventory

B) Distorted demand information as it moves up the supply chain

A high churn rate means: A) Customers are staying longer B) Many customers are leaving C) Sales are growing D) Inventory is too high

B) Many customers are leaving

Netflix charging a monthly fee is an example of which revenue model?

Subscription

Spotify offering a free tier and a paid premium tier is an example of which revenue model?

Free/freemium

Which of the following is an example of selling in a marketspace rather than a marketplace? A) A farmers market stall B) A mall storefront C) An online store D) A garage sale

C) An online store