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Processes, Systems, and Information, 2e (McKinney/Kroenke)

Chapter 11 Business Intelligence and IS

1) A typical business intelligence database is large in volume.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 1
Course LO: Compare and contrast different business intelligence systems

2) BI systems are reducing their capacity to help businesses identify important patterns in data.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 1
Course LO: Compare and contrast different business intelligence systems

3) The objective of most business intelligence processes is to inform.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

4) The efficiency objective of business intelligence is to inform someone in the business.


Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

5) BI systems restrain from combining operational data with data from other sources before
storing them in the repository.
Answer: FALSE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

6) To use BI applications, businesses should avoid depending on traditional transactional


databases.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

1
Copyright © 2015 Pearson Education, Inc.
7) Typically in a BI system, analysis begins with a massive volume of data being scaled down to
a small set if the analysis looks promising.
Answer: FALSE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

8) A BI server is used by an analyst to analyze data and produce the output.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

9) When users do BI analysis by themselves, it is called self-service BI.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

10) A data warehouse is specially designed to sort and retrieve large volumes of data.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

11) Data mining is the first step of a BI activity supported by business intelligence information
systems.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

12) Operational data are often structured in a way that readily supports BI analysis.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

2
Copyright © 2015 Pearson Education, Inc.
13) The primary objective of a reporting process is predicting patterns and relationships in data.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

14) An RFM analysis considers how recently a customer has ordered and how much the
customer has spent.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

15) Data that is analyzed once using slicing and dicing cannot be reanalyzed.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

16) With an OLAP report, it is possible to drill down into data.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

17) The data mining process has the same activities as the reporting process.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

18) The data mining process can predict the likelihood of various outcomes of a particular event.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

3
Copyright © 2015 Pearson Education, Inc.
19) One of the applications of the data mining process is to predict products that tend to be
purchased together.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

20) Market basket analysis is a technique used to segment the customer base.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

21) Market basket analysis predicts cross-selling opportunities.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

22) With unsupervised data mining, analysts typically create a model or hypothesis before
running the analysis.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

23) Dashboards can be used to monitor business processes and indicate abnormal conditions with
clear signs.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

24) The decision-making process is one of the most frequently occurring processes in an
organization.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 5
Course LO: Compare and contrast different business intelligence systems

4
Copyright © 2015 Pearson Education, Inc.
25) Rules cannot be programmed into business intelligence applications.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 5
Course LO: Compare and contrast different business intelligence systems

26) With the advent of business intelligence, companies can more accurately predict the rate that
offers will be accepted.
Answer: TRUE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 5
Course LO: Compare and contrast different business intelligence systems

27) Big Data information systems are similar in data and software in comparison to routine-sized
databases.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

28) Traditional techniques cannot be used to process Big Data.


Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

29) Using the MapReduce techniques, pieces of data are integrated to form a huge chunk of
information.
Answer: FALSE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

30) MapReduce systems access the data stored in the secondary storage using SQL systems.
Answer: TRUE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

5
Copyright © 2015 Pearson Education, Inc.
31) For BI applications, a few missing data points is better than no data at all.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

32) Granularity refers to the inconsistencies and missing values that exist within data.
Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

33) Clickstream data is used to track everything the customer does at a Web site.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

34) Leaders can contribute to BI pushback by overselling the potential of a BI system.


Answer: TRUE
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

35) The operational data collected by SAP is known as business objects.


Answer: FALSE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 8
Course LO: Compare and contrast different business intelligence systems

36) Organizations implementing SAP can choose to write additional code to accomplish tasks
that SAP does not provide.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 8
Course LO: Compare and contrast different business intelligence systems

6
Copyright © 2015 Pearson Education, Inc.
37) Business intelligence will continue to expand as Big Data matures.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 9
Course LO: Compare and contrast different business intelligence systems

38) A credit card provider uses a software to determine the likelihood of customers defaulting on
their payments. The software assigns a credit score to each customer based on their past
transactional records. This software is an example of a ________ system.
A) project management
B) business intelligence
C) collaboration
D) budgeting
Answer: B
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 1
Course LO: Compare and contrast different business intelligence systems

39) Which of the following statements is true about business intelligence systems?
A) They help identify patterns in mountains of data.
B) Their use by private organizations is restricted by law.
C) They require highly trained analysts to uncover data patterns.
D) They are expensive to acquire due to the rising cost of data storage.
Answer: A
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 1
Course LO: Compare and contrast different business intelligence systems

40) Which of the following is an effectiveness objective of the BI process?


A) storing and retrieving data
B) assessing current conditions
C) working with budget constraints
D) staying within time limits
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

7
Copyright © 2015 Pearson Education, Inc.
41) Which of the following is an efficiency objective of the BI process?
A) informing business personnel
B) assessing current conditions
C) predicting future events
D) meeting time constraints
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

42) Which of the following statements is true of a BI system?


A) A BI server is capable of delivering output in a variety of formats.
B) Operational databases are incompatible for use with BI systems.
C) Data collected for BI systems are unsuitable for storage in data warehouses.
D) General-purpose BI software is used irrespective of the analysis method employed.
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

43) The special repository for business intelligence applications is called a ________.
A) data warehouse
B) data matrix
C) data array
D) data set
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

44) In BI terms, operational databases are often referred to as ________.


A) data warehouses
B) online transactional processing systems
C) data matrices
D) online analytical processing systems
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

8
Copyright © 2015 Pearson Education, Inc.
45) Which of the following is referred to as an online analytical processing system?
A) the data set
B) the traditional database
C) the operational database
D) the data warehouse
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

46) Which of the following statements is true of the reporting process?


A) It applies simple operations to reveal patterns in data.
B) It creates unstructured reports and delivers them to users.
C) It involves the use of sophisticated statistical techniques.
D) Its objective is better prediction.
Answer: A
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

47) Which of the following types of analyses is used in the reporting process?
A) market basket analysis
B) RFM analysis
C) cluster analysis
D) regression analysis
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

48) A digital dashboard is a(n) ________.


A) electronic input device used in business intelligence systems
B) information system that is used to enter data into databases
C) visualization that is customized for a particular user
D) digital device in the central processing unit of a BI system
Answer: C
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

9
Copyright © 2015 Pearson Education, Inc.
49) A(n) ________ analysis is used to analyze and rank customers according to their purchasing
patterns.
A) regression
B) cluster
C) RFM
D) market basket
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

50) Which of the following statements is true about RFM analysis?


A) It ranks customers based on their purchasing power.
B) It uses more than a single attribute to sort the customers.
C) It uses unsorted data to produce an RFM score.
D) It identifies groups of entities that have similar characteristics.
Answer: B
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

51) The supermarket from which Robert purchases groceries gives him an RFM score of 115
(R=1; F=1; M=5, on a scale of 1 to 5). Based on this information, which of the following is a
valid conclusion?
A) Robert recently made a big purchase at the supermarket.
B) Robert does not shop frequently at the supermarket.
C) Robert has not purchased anything from the supermarket recently.
D) Robert frequently purchases inexpensive items from the supermarket.
Answer: D
Difficulty: Moderate
AACSB: Information Technology; Analytical Thinking
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

52) An RFM score of 555 (R=5; F=5; M=5, on a scale of 1 to 5) assigned to a customer indicates
that the customer ________.
A) buys expensive items frequently
B) has not purchased anything recently but buys frequently
C) has not purchased anything recently
D) buys inexpensive items frequently
Answer: C
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems
10
Copyright © 2015 Pearson Education, Inc.
53) In an RFM analysis, what will be the M score of a customer who spends the least amount of
money, when rated on a scale of 1 to 5?
A) 5
B) 1
C) 0
D) 2
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

54) ________ provides the ability to analyze data using basic operations such as sorting,
grouping, filtering, and calculating but, the operation is typically repeated.
A) OLAP
B) PERT
C) Market basket analysis
D) Regression analysis
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

55) Drilling down into data means ________.


A) changing the format of stored data
B) grouping data into clusters
C) dividing the data into more detail
D) downsizing a database by deleting files
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

56) An OLAP measure is a(n) ________.


A) characteristic of an OLAP report
B) data item to be processed in an OLAP report
C) attribute of an OLAP report
D) RMF score for an OLAP report
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

11
Copyright © 2015 Pearson Education, Inc.
57) An OLAP ________ is a characteristic or attribute of an info cube.
A) cube
B) dimension
C) dashboard
D) cluster
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

58) An OLAP report that displays information using three dimensions is called a(n) ________.
A) warehouse
B) dashboard
C) cluster
D) info cube
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

59) An organization uses a business intelligence system to predict products that tend to be
purchased together. This is an example of a(n) ________ process.
A) reporting
B) information extracting
C) evaluating
D) data mining
Answer: D
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

60) Which of the following statements is true regarding the data mining process?
A) It consolidates data into multiple data warehouses.
B) Its activities are entirely different from those in the reporting process.
C) It uses simple statistical techniques for data analysis.
D) Its objective is better prediction of various outcomes.
Answer: D
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

12
Copyright © 2015 Pearson Education, Inc.
61) Regression analysis is an example of a ________ analysis process.
A) data mining
B) market basket
C) reporting
D) visualization
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

62) ________ analysis is a type of data mining analysis which measures the impact of a set of
variables on another variable.
A) Market basket
B) RFM
C) Cluster
D) Regression
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

63) Regression analysis is used to ________.


A) rank customers according to their purchasing patterns
B) predict future performance
C) identify groups of entities that have similar characteristics
D) perform basic operations
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

64) Which of the following is used to predict cross-selling opportunities?


A) RFM analysis
B) cluster analysis
C) regression analysis
D) market basket analysis
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

13
Copyright © 2015 Pearson Education, Inc.
65) A retail store wants to identify the types of products that they should bundle together on sale.
Which of the following types of analysis would be most suitable for this purpose?
A) market basket
B) RFM
C) cluster
D) OLAP
Answer: A
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

66) Selling products in addition to what customers request is called ________.


A) hard-selling
B) down-selling
C) up-selling
D) cross-selling
Answer: D
Difficulty: Easy
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

67) Margin Retails, a local supermarket, stocks up aftershave products next to the shaving
creams predicting that consumers purchasing the shaving creams are most likely to purchase the
aftershaves. In this case Margin's analysis technique is typically based on ________.
A) hard-selling
B) soft-selling
C) cross-selling
D) up-selling
Answer: C
Difficulty: Moderate
AACSB: Analytical Thinking
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

68) Which of the following is an example of unsupervised data mining?


A) OLAP analysis
B) RFM analysis
C) market basket analysis
D) regression analysis
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

14
Copyright © 2015 Pearson Education, Inc.
69) Which of the following is true about unsupervised data mining?
A) Activities are different from a reporting activity.
B) Analysts do not create a model before running the analysis.
C) Statistical analysis is applied to data prior to the analysis.
D) Statistical tools used are simple and easy to understand.
Answer: B
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

70) Which of the following is an example of supervised data mining?


A) regression analysis
B) PERT
C) CPM
D) market basket analysis
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

71) Which of the following is true about supervised data mining?


A) Statistics used are simple and easy.
B) It is used for predicting cross-selling opportunities.
C) Analysts develop a model prior to the analysis.
D) Patterns found are explained by a hypothesis.
Answer: C
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

72) ________ is the creation of images or diagrams that communicate a data pattern in a highly
readable format.
A) Phishing
B) Simulation
C) Visualization
D) Augmented reality
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

15
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73) A sales manager uses a bar chart to describe sales projections to his associates. This scenario
exemplifies ________.
A) phishing
B) visualization
C) simulation
D) augmented reality
Answer: B
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

74) Which of the following processes supported by BI information systems refers to the selection
of a choice among available options and can be done individually or in a group?
A) decision making
B) knowledge management
C) phishing
D) pharming
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 5
Course LO: Discuss the role of information systems in supporting business processes

75) ________ is a rule-based system that acquires and stores human knowledge in the form of
If/Then rules.
A) MapReduce
B) Disparate system
C) Expert system
D) Big Data
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 5
Course LO: Compare and contrast different business intelligence systems

76) Which of the following is an objective of the NBO process?


A) to create value from intellectual capital and to share knowledge
B) to predict the number of customers who will accept an offer
C) to select a choice among a set of available options
D) to connect the power of multiple computers working in parallel
Answer: B
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 5
Course LO: Compare and contrast different business intelligence systems

16
Copyright © 2015 Pearson Education, Inc.
77) Which of the following is a feature of Big Data?
A) It is accessed slowly due to its large size.
B) It consists of unstructured data.
C) Its datasets are at least a petabyte in size.
D) It is generated slowly.
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

78) Because of the massive volume of Big Data, it has to be processed using the ________.
A) traditional technique
B) relational database
C) SQL database
D) MapReduce technique
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

79) ________ is an open-source program supported by the Apache Foundation that implements
MapReduce on potentially thousands of computers.
A) Hadoop
B) HTTP Server
C) Struts
D) ActiveMQ
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

80) The database operations in a MapReduce system are slow as the system keeps the data in
________.
A) magnetic tapes
B) temporary memory
C) secondary storage
D) main memory
Answer: C
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

17
Copyright © 2015 Pearson Education, Inc.
81) With the introduction of SAP HANA, the database operations of Big Data systems are faster
when compared to MapReduce systems. Which of the following statements justifies this
improvement?
A) The system now uses a relational database technology.
B) SQL statements are used to access data from secondary storage.
C) A solid-state memory device is used to store data.
D) The tasks in the system are divided into multiple servers.
Answer: C
Difficulty: Hard
AACSB: Information Technology; Analytical Thinking
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

82) Data that are problematic for business intelligence are termed ________.
A) clustered data
B) intrinsic data
C) dirty data
D) granular data
Answer: C
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

83) An organization uses SAP financial management software to store accounting details and
Microsoft CRM software to record customer transactions. Managers face problems when they
have to make decisions based on both sets of data, as the data are stored on two different
platforms. Such data are referred to as ________ data.
A) nonintegrated
B) dirty
C) granular
D) meta
Answer: A
Difficulty: Moderate
AACSB: Analytical Thinking
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

18
Copyright © 2015 Pearson Education, Inc.
84) Granularity refers to the ________.
A) problems that persist within data
B) level of detail of the data
C) inconsistencies within data
D) patterns derived from operational data
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

85) ________ include the activities of a customer on a Web site.


A) Real-time data
B) Clickstream data
C) Spam mails
D) Rootkits
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

86) Which of the following BI-related problems is most commonly associated with
organizational leaders?
A) mistaking data for information
B) resisting BI use because the system may change their jobs
C) underestimating the cost of producing a BI report
D) overselling the potential of a BI system
Answer: D
Difficulty: Moderate
AACSB: Information Technology; Analytical Thinking
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

87) The SAP OLAP database is referred to as ________.


A) online transactional system
B) operational database
C) business object
D) data warehouse
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 8
Course LO: Compare and contrast different business intelligence systems

19
Copyright © 2015 Pearson Education, Inc.
88) The collection of operational process data that SAP uses is referred to as ________.
A) online analytical processing
B) market basket analysis
C) data harvesting
D) online transactional processing
Answer: D
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 8
Course LO: Compare and contrast different business intelligence systems

89) Which of the following is a factor that will impact the growth of business intelligence in the
future?
A) mobile devices
B) structured data sources
C) legacy systems
D) scarce data volume
Answer: A
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 9
Course LO: Compare and contrast different business intelligence systems

90) Which of the following is most likely to cause a technology backlash with the growth of
business intelligence?
A) communication costs
B) consumer privacy
C) data volume
D) unstructured data
Answer: B
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 9
Course LO: Compare and contrast different business intelligence systems

91) What is a business intelligence system?


Answer: A business intelligence system is an information system that supports the process of
acquiring, analyzing, and publishing data with an objective of discovering or revealing patterns
in data that will inform a business person.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 1
Course LO: Compare and contrast different business intelligence systems

20
Copyright © 2015 Pearson Education, Inc.
92) What are the objectives of the BI process?
Answer: The objective of most all business intelligence processes is to inform someone in the
business. For example, a business person may have a particular pattern or relationship they are
assessing, such as looking to see if sales are increasing or decreasing. BI processes also pursue
an efficiency objective–time and cost constraints.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 2
Course LO: Compare and contrast different business intelligence systems

93) Describe the hardware and software used in BI systems.


Answer: The key piece of hardware in a BI system is a BI server. A BI server is used by an
analyst to analyze the data and produce the output. A BI server can deliver output in a variety of
formats.
A variety of BI software supports each of the three activities in the BI process–acquiring,
analyzing, and publishing. While some software products such as Excel can support several of
the activities, very few support each of the steps. SAP, Oracle, and Microsoft offer a
comprehensive suite of BI software products that support each of the activities for medium to
large organizations.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

94) How is data collected and stored in a BI system?


Answer: Data can be collected for a BI system in two ways. First, the data may come from an
operational database that contains the data from the operational processes in a company. Second,
data may come from other sources that are then combined with operational process data. In either
case, once the data are collected they are then prepared and stored in a data warehouse, a
repository for the organization's BI data. BI data are kept in a data warehouse because a data
warehouse is specially designed to make sorting and retrieving large volumes of data efficient.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 3
Course LO: Compare and contrast different business intelligence systems

95) Describe the features of the reporting process.


Answer: Reporting applies simple operations to reveal patterns in the data. The analysis of the
data is modest: Data are sorted and grouped, and simple totals and averages are calculated using
operations such as sorting, grouping, and summing. Reporting applications use four basic
operations: sorting, filtering, grouping, and calculating.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

21
Copyright © 2015 Pearson Education, Inc.
96) Describe how an RFM score is calculated on a scale of 1 to 5.
Answer: To produce an RFM score, the RFM analysis first sorts customer purchase records by
the date of their most recent (R) purchase. The 20 percent of the customers having the most
recent orders are given an R score of 1, the 20 percent of the customers having the next most
recent orders are given an R score of 2, and so forth, down to the last 20 percent, who are given
an R score of 5.
The RFM analysis then re-sorts the customers on the basis of how frequently they order. The 20
percent of the customers who order most frequently are given an F score of 1, the next 20 percent
of most frequently ordering customers are given a score of 2, and so forth, down to the least
frequently ordering customers, who are given an F score of 5.
Finally, the analysis sorts the customers again according to the amount spent on their orders. The
20 percent who have ordered the most expensive items are given an M score of 1, the next 20
percent are given an M score of 2, and so forth, down to the 20 percent who spend the least, who
are given an M score of 5.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

97) Describe OLAP slice and dice technique.


Answer: OLAP slicing and dicing allows the user to execute the basic analysis operations of
sorting, grouping, filtering, and calculating interactively; that is, the user or analyst can
experiment with one operation, assess the output, and then go back and reanalyze the data. While
it is a common way to analyze data, it also is frequently used by analysts to explore a new set of
data.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

98) Describe regression analysis with the help of an example.


Answer: Regression analysis is a type of data mining analysis that measures the impact of a set
of variables on another variable. For example, analysts in an organization can create a prediction
to next year's Net Sales. If the economy grows by 2% and sales this year were $10 million, then
sales next year will be 3 + (20 × .02) + 10 = $13.4 million.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

22
Copyright © 2015 Pearson Education, Inc.
99) What is the difference between unsupervised data mining and supervised data mining?
Answer: With unsupervised data mining, analysts do not create a model or hypothesis before
running the analysis. Instead, they apply the data mining software to the data and observe the
results. With this method, analysts create hypothesis after the analysis in order to explain the
patterns found.
With supervised data mining, analysts develop a model prior to the analysis and apply statistical
analyses to the data to estimate parameters of the model. Regression analysis is an example of
supervised data mining.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 4
Course LO: Compare and contrast different business intelligence systems

100) Describe how BI information systems supported the decision-making process.


Answer: The decision-making process is the selection of a choice among available options and
can be done individually or in a group. It is one of the most frequently occurring processes in
organizations. BI systems support the decision-making process by acquiring data and providing
analysis and publication software.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 5
Course LO: Discuss the role of information systems in supporting business processes

101) Describe the MapReduce technique.


Answer: Because Big Data is huge, fast, and varied, it cannot be processed using traditional
techniques. MapReduce is a technique for harnessing the power of thousands of computers
working in parallel. The basic idea is that the Big Data collection is broken into pieces, and
hundreds or thousands of independent processors search these pieces for something of interest.
That process is referred to as the Map phase. For example, a dataset having the logs of Google
searches is broken into pieces, and each independent processor is instructed to search for and
count search keywords. As the processors finish, their results are combined in what is referred to
as the Reduce phase. The result is a list of all the terms searched for on a given day and the count
of each.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 6
Course LO: Compare and contrast different business intelligence systems

23
Copyright © 2015 Pearson Education, Inc.
102) Describe the risks associated with missing data and data silos.
Answer: Most operational and purchased data have problems that inhibit their usefulness.
Purchased data often contain missing elements. Most data vendors state the percentage of
missing values for each attribute in the data they sell. For BI applications, though, a few missing
or erroneous data points can be worse than no data at all because they bias the analysis.
Another problem is nonintegrated data. A particular BI analysis might require data from an ERP
system, an e-commerce system, and a social networking application. It is the function of
personnel in the data warehouse to integrate such data, somehow. Nonintegrated data may also
be the result of information silos within the organization.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

103) Describe the major risks faced by businesses from business intelligence users.
Answer: User resistance is a common malady of all information systems. Users resist BI
systems for a number of reasons–it may change their job, require knowledge the user does not
have, or distract them from their primary work. Users may be entranced by the sophistication of
the viz without realizing the underlying data is fairly meaningless. A third type of user problem is
that users may underestimate the cost of producing a BI report.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 7
Course LO: Compare and contrast different business intelligence systems

104) How does SAP perform business intelligence?


Answer: Like all ERP systems, SAP consolidates operational data in an OLTP database. Data
from the OLTP or from other sources can be extracted and placed into the SAP OLAP database,
which SAP calls a data warehouse (BW). Once in the warehouse, the data is formed into
information cubes.
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 8
Course LO: Compare and contrast different business intelligence systems

105) How will the growth of business intelligence lead to technology backlash?
Answer: As more data are collected on customers by credit card companies and social media
sites, the usefulness of BI will continue to grow. This anticipated growth in data about individual
financial and personal behavior may lead to a privacy backlash. Privacy tensions will create a
technology backlash, and it will concern machines becoming smarter. Machine learning is
similar to BI, except rather than people becoming informed, machines are informed; using this
information, the machines learn and adapt.
Difficulty: Moderate
AACSB: Information Technology
Chapter LO: 9
Course LO: Compare and contrast different business intelligence systems

24
Copyright © 2015 Pearson Education, Inc.

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