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Home Software Engineering with UML ERP MCQ with solutions MCQ OF IT MANAGEMENT WITH
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Home Software Engineering with UML ERP MCQ with solutions MCQ OF IT MANAGEMENT WITH
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ERP MCQ with solutions

Multiple Choice Questions

SECTION 1

1. Which of the following describes an ERP system?

A) ERP systems provide a foundation for collaboration between departments

B) ERP systems enable people in different business areas to communicate

C) ERP systems have been widely adopted in large organisations to store critical knowledge used to
make the decisions that drive the organisation's performance

D) All of the above

Answer: D

Response: All of the above describe ERP systems.

2. What is at the heart of any ERP system?

A) Information

B) Employees

C) Customers

D) Database

Answer: D
Response: At the heart of an ERP system is a central database.

3. What must a system do to qualify as a true ERP solution?

A) Be flexible

B) Be modular and closed

C) Extend within the company

D) All of the above

Answer: A Level: Medium

Response: To qualify as a true ERP solution the system must be flexible, modular and open, and extend
beyond the company.

4. Which of the following is a reason for ERPs explosive growth?

A) ERP is a logical solution to the mess of incompatible applications

B) ERP addresses the need for global information sharing and reporting

C) ERP is used to avoid the pain and expense of fixing legacy systems

D) All of the above

Answer: D

Response: All of the above are reasons for ERPs explosive growth.

5. Which of the following occurs when everyone involved in sourcing, producing, and delivering the
company's product works with the same information?

A) Eliminates redundancies

B) Cuts down wasted time

C) Removes misinformation

D) All of the above

Answer: D

Response: All of the above occur due to the use of an ERP system.

6. What are several different types of software, which sit in the middle of and provide connectivity
between two or more software applications?

A) Middleware

B) Enterprise application integration middleware

C) Automated business process

D) e-business infrastructure

Answer: A

Response: This is the definition of middleware.

7. What represents a new approach to middleware by packaging together commonly used functionality,
such as providing prebuilt links to popular enterprise applications, which reduces the time necessary to
develop solutions that integrate applications from multiple vendors?

A) Middleware

B) Enterprise application integration middleware

C) Automated business process

D) e-business infrastructure

Answer: B

Response: This is the definition of enterprise application integration middleware.

8. Who are the primary users of SCM systems?

A) Sales, marketing, customer service

B) Accounting, finance, logistics, and production

C) Customers, resellers, partners, suppliers, and distributors

D) All of the above

Answer: C

Response: The primary users of SCM systems are customers, resellers, partners, suppliers, and
distributors.

9. What are the primary business benefits of an ERP system?

A) Sales forecasts, sales strategies, and marketing campaigns

B) Market demand, resource and capacity constraints, and real-time scheduling

C) Forecasting, planning, purchasing, material management, warehousing, inventory, and distribution

D) All of the above

Answer: C

Response: The primary business benefits of an ERP system include forecasting, planning, purchasing,
material management, warehousing, inventory, and distribution.

10. Who are the primary users of ERP systems?

A) Sales, marketing, customer service

B) Accounting, finance, logistics, and production

C) Customers, resellers, partners, suppliers, and distributors

D) All of the above

Answer: B

Response: The primary users of ERP systems are accounting, finance, logistics, and production.

Part A – 1 Mark

1. _________ handling and sharing has become a vital process for efficient and
effective working of any organisation.
 a. Material

b. Resource

c. Information

d. Database

2. ________ became the fundamental concept of production management and

control.

a. BOM

b. MRP

c. ERP

d. MRP II

3. In the _________, ERP packages were targeted at the manufacturing industry.

a. 1970’s

b. 1990's

c. 1980’s
 d. 1960’s

4. The _________ should plan well and execute perfectly the implementation of
ERP.

a. Organisation

b. System developers

c. Vendors

d. Top Management

5. Which is one of the most critical steps in the ERP implementation?

a. Creation of Organisational Model

b. Creation of Integrated Data Model

c. Creation of Business Model

d. Creation of Data Model

6. What is one of the key resources of every organisation, in today’s competitive business
environment?
 a. Employee

b. Information

c. ERP

d. Database

7. When a customer needs to check the performance of the company before he places
an order, which department has to be in a position to provide the necessary
information?

a. Production

b. Quality

c. Marketing

d. Finance

8. In an integrated data model, what gives a snapshot of the organisation at any given time?

a. ERP

b. Database
 c. Management

d. MIS

9. OLAP stands for:

a. On-Line Analytical Processing

b. On-Line Account Processing

c. On-Line Arithmetic Processing

d. On-Line Application Processing

10. Data mining is the process of identifying valid, new, potentially useful, and ultimately clear
______________ from databases.

a. Decision

b. Strategies

c. Information

d. Account

11. EIS stands for:

 a. Executive Interaction System

b. Executive Interconnecting Systems

c. Executive Information Systems

d. Executive Instrumental Systems

12. DSS is quite _______________ and is available on request.

a. Structured

b. Non-structured

c. Semi-structured

d. Unstructured

13. ERP system is built on a ____________ utilising a common computing platform

a. Centralised database

b. Individual databases

c. Modular databases
 d. Centralised layout

14. Which of the following is an example for commercial ERP

a. ERP5

b. Microsoft Dynamics AX

c. Compiere

d. Fisterra

15. NPV is the abbreviation of

a. Net Present Variation method

b. Net Present Value method

c. Neutral Present Value method

d. Net Preventive Value method

16. ERP vendors usually design their systems around standard business processes, based
upon ____________________
 a. Business standards

b. Global standards

c. Best business practices.

d. Best profitable standards

17. The _______ module's internal functions do not directly interact with the data or processes
of other modules.

a. Finance

b. Quality Management

c. Sales and Distribution

d. Plant Maintenance

18. Which among the following systems can be assigned to a cost centre directly which
illustrates the interface to the cost accounting system?

a. FAPA

b. Purchasing

c. Sales and Distribution

 d. CASO

19. Which system provides the foundation for creating concurrent business processes across
the supply chain and achieving Return on Assets (ROA) improvement?

a. Finance

b. Inventory

c. Manufacturing

d. Sales

20. The processes described in the quality manual can be implemented and automated in the
EDP system. Here what does EDP stand for?

a. Electronic Data Processing

b. Electronic Dictionary Project

c. Electrical Data Processing

d. Employee Development Plan

21. What is the key to MRP?

a. Quantity of requirements for components are based upon the structure of the Bill of
Material.

b. Production of requirements for components are based upon the structure of the Bill
of Material.

c. Time-phasing of requirements for components are based upon the structure of the Bill
of Material.

d. Capacity of requirements for components are based upon the structure of the Bill of
Material.

22. During the 80s, tools were developed to assist the planning of:

a. Production levels

b. Priority planning system

c. Capacity requirements

d. Planning functions

23. Complete the sentence: MRP-II systems provide…

a. Information that is useful to all functional areas and encourage cross-

functional interaction.
 b. Information with cost data.

c. Information that can be used for other company functions.

d. Accurate inventory information.

24. ERP is restricted to being a _________operations system in the country.

a. Finance

b. Budgeting modules

c. Manufacturing

d. Transaction-oriented

25. ________________ allow companies to enter requirements for various types of items.

a. Purchase order

b. Purchase requisitions

c. Invoice

d. General ledger
26. What is EDI?

a. Electronic Data Interface

b. Exchange Data Interchange

c. Exchange Data Interface

d. Electronic Data Interchange

27. _________ module supports the entire sales and purchase processes from start to finish.

a. Order management

b. Sales management

c. Purchase management

d. Master Data Management

28. ___________evaluates whether or not customer contract agreement are being met.

a. Purchase order management

b. Sales order management

 c. Master data management

d. Warehouse management

29. ____________ maintains reports of warehouse supplies.

a. ERP financial module

b.ERP Inventory software module

c. ERP Resource module

d. ERP verification module

30. Web ERP is suitable for ____________ .

a. Both small and big organisations

b. Only big organisations

c. Medium scale organisations

d. Only small organisations

31. RFP stands for ____________________ .

 a. Request For Productivity

b. Request For Profits

c. Request For Processing

d. Request For Proposal

32. Installing ERP Inventory systems is ____________ .

a. Simple

b. Trouble free

c. Complex

d. Cost effective

33. In recent years, CRM has become a primary component of:

a. ERP vendors

b. ERP software solutions.

c. CRM software
 d. CRM solutions

34. ____________is the most common operating system for running CRM software

a. UNIX

b. Windows NT

c. Windows Vista

d. Windows XP

35. __________ module keeps track of liquidation process.

a. Market management module

b. Liquidation module

c. Treasury module

d. Enterprise management module

36. ____________ system maintains employees information in graphical format.

 a. Employee master data

b. Personnel administration

c. Payroll accounting

d. Benefits administration

37. As processes become more automated and efficient,

a. It is best to treat ERP as an investment as well as a cost-cutting measure.

b. It is not best to treat ERP as an investment as well as a cost-cutting measure.

c. It is best to treat ERP as an disinvestment as well as a cost-cutting measure.

d. It is best to treat ERP as an investment but not as a cost-cutting measure.

38. ETO means

a. Engineer-to-Order

b. Engineer-to-Offer

c. Enterprise-to-Order
 d. Enterprise-to-Offer

39. The vendor should have a _______, who must constantly interact with the
implementation team.

a. Liaison officer

b. Project Supervisor

c. Project Manager

d. Implementation co-ordinator

40. Identify the correct statement.

a. The only problem with the package vendors is that they are very expensive.

b. The only problem with the business consultants is that they are very
expensive.

c. The only problem with the employee training is that it is very expensive.

d. The only problem with the planning of implementation is that it is very

expensive.

PART B – 2 mark questions

1. When ERP system is introduced in a company, many employees find the
transformation difficult to accept because of which of the two reasons:

1. The employees are not given proper training.

2. Employees who were earlier doing the work of recording information are
transformed into decision-makers.

3. Of fear of unemployment.

4. They fear that ERP systems will revolutionalise the way they live and work.

a. 1 & 2

b. 3 & 4

c. 2 & 4

d. 1 & 3

2. The package should be _________ and should have installations in

countries where the _________ has offices.

a. Domestic, Vendor

b. International, Company

c. International, System developer

d. International, Vendor
3. The ________ should be a replica of the organisation’s ________ processes.

a. MIS, Business

b. ERP, Financial

c. MIS, Financial

d. ERP, Business

4. The disadvantages of a system when it works in isolation are:

1. It becomes difficult to collect and analyse data needed for the functioning of
any department.

2. It results in the loss of profits to the organisation that could have been better
spent in decision making.

3. Business executive or decision-maker cannot take good decisions with the

isolated data.

a. 1 & 3

b. 1 & 2

c. 2 & 3
 d. 1

5. MIS is a computer-based system that optimises the

___________________________ of information throughout an organisation. 1.

Collation

2. Collection

3. Transfer

4. Presentation

a. 1, 2, & 3

b. 1, 3, & 4

c. 1, 2, & 4

d. 1, 2, 3, & 4

6. In the next generation, DSS hardware and software will be embedded with the latest
technological innovations like the

1. Planning and forecasting models,

 2. Fourth generation languages,

3. Artificial intelligence.

4. Data mining

a. 1, 3, & 4

b. 1, 2, & 3

c. 1 & 3

d. 3 & 4

7. The stakeholders within the enterprise must

a. Be involved in the project initiation phase where the decision making process is
agreed and attend Vendor demonstrations

b. Not assist in the gathering of requirements

c. Not be involved in vendor demonstration

d. Involve only in vendor demonstration

8. One common mistake that companies resort when selecting an ERP system is

a. Non biased selection

b. Over-emphasis on system cost

c. Complete set of requirements

d. Not relying on vendor demos

9. The sales and distribution modules of many ERP vendors, offer a comprehensive set of
best of its kind components for both _______ and _______ management.

a. Manufacturing, Production

b. Sales, Distribution

c. Planning, Business

d. Order, Logistics

10. ______ are collected and archived in a manner that offers full support for

_______ process control techniques.

a. Product quality metrics, Statistical

 b. Statics, Product quality metrics

c. Production quality, Statistical

d. Product quality metrics, Financial

11. Identify the correct statements.

1. The manufacturing segment accounts for nearly 25% of the total Information
Technology

2. The process and discrete manufacturing segments spent a total of Rs 2,605

crore on IT in the year 1996-97.

3. The manufacturing segment helps in improving IT infrastructure, automating

internal and external processes, and better decision-making.

4. Discrete manufacturing accounted for nearly 15% of the total segment

spending and the rest came in from process manufacturing.

a. 1 & 4

b. 2 & 3

c. 1 & 3

d. 2 & 4
12. Identify the two aims of JIT approach applied to the organisation. 1.
Production system

2. Elimination of Waste

3. Total Employee Involvement

4. Production philosophy

a. 1 & 2

b. 2 & 3

c. 1 & 4

d. 3 & 4

13. Which among the following information is available in the Supplier file? 1.
Purchasing information

2. Payment terms

3. Tolerance for receiving and invoicing

4. Addresses
 a. 1

b. 3 & 4

c. 1, 2, 3 & 4

d. 2 & 3

14. The Sales Support component helps the sales and marketing department to……………………...

a. Support existing customers only.

b. Supports in developing new business.

c. Support existing customers but does and help to develop new business.

d. Support existing customers and, at the same time, to develop new business.

15. Identify the correct answer: The three major activities associated with ERP inventory
management are:

A. Identifying inventory requirements B.

Customising information
 C. Monitoring item usages

D. Integrating the inventory balances

a. B,C,D

b. D,A,B

c. A,C,D

d. C,B,A

16. Select the modules that decides the inputs required and suppliers for delivery? A.
Inventory placing

B. Inventory order assessment C.

Inventory requisition D.Supplier
Performa

a. A,D

b. D,B

c. C,B

d. D,C

17. CRM yields employees with ______________ and improves personal

 ___________ efficiencies

a. Work, work advantage

b. Customisation, work

c. Work advantage, work

d. Customisation, work advantage

18. Identify the right answer.

The two major objectives of Human Resources are: A. To

provides instant updates of information.

B. To make the workflow cost effective. C. To

provide training to the employees.

D. To provide self service benefits to the employees.

a. B,C,

b. D,A,

c. B,D

d. A,C
 19. As processes become more automated and efficient,

a. It is best to treat ERP as an investment as well as a cost-cutting measure.

b. It is not best to treat ERP as an investment as well as a cost-cutting measure.

c. It is best to treat ERP as an disinvestment as well as a cost-cutting measure.

d. It is best to treat ERP as an investment but not as a cost-cutting measure.

20. The ____________________ and ____________________ manage the

supplier relations, monitor the vendor activities and manage the supplier quality in an
organisation.

a. Supplier management, customisation processes

b. Supplier maintenance, control processes

c. Supplier management, control processes

d. Supplier maintenance, customisation processes

PART C – 4 mark questions

1. The direct benefits of an ERP system include:

 a. Business integration, Flexibility, Improved customer goodwill, Customer
satisfaction.

b. Business integration, Better analysis and planning capabilities, Flexibility, Use of

latest technology.

c. Better analysis and planning capabilities, Flexibility, Use of latest technology,

Customer satisfaction.

d. Improved customer goodwill, Customer satisfaction, Use of latest technology,

Flexibility.

2. Identify the correct statement (s) about MIS.

1. A system that produce information products that support many of the day-to-day
decision making needs of the management.

2. Also called information managing system.

3. A system that satisfies the needs of the top level management.

4. A system that operates at a departmental level.

a. 2 & 3

b. 1 & 4

c. 4
 d. 1, 2 & 3

3. An ideal interface for an EIS would be the one that is: 1. Simple to use.

2. Highly flexible.

3. Provides consistent performance.

4. Reflects the executive’s world.

a. 1, 2, & 3

b. 2, 3, & 4

c. 1, 2, 3, & 4

d. 1, 2, & 4

4. Arrange the following statements in correct order A. Determining

the timing of data migration

B. Deciding on migration related setups C. Identifying the

data to be migrated D. Freezing the tools for data
migration E. Deciding on data archiving
 F. Generating the data templates

a. C, F,A,B, D, E

b. C, A, F, D, B, E

c. F, D, A, C, B, E

d. D, A, C, B, E, F

5. Identify the subsystems of Plant Maintenance module of an ERP system: 1. Component

Tracking

2. Preventive Maintenance Control

3. Inventory Management

4. Cost Management

a. 1, 2 & 3

b. 2, 3 & 4

c. 1 & 2

d. 1, 3 & 4
6. Identify the main components of PDM systems-- 1. Data Management

2. Classification of Components

3. Product Structure

4. Document relationships

a. 1, 2 & 3

b. 1, 4 & 3

c. 2 & 3

d. 4 & 3

7. Sub modules of Sales and Distribution modules are: 1. Order Management

2. Warehouse Management

3. Foreign Trade

4. Sales Support
 a. 3

b. 1 & 2

c. 2 & 4

d. 1, 2, 3 & 4

8. Match the following: First set:

1. Material request management

2. Material Issue

3. Material Receipt

4. Stock Valuation

Second set:

A. A receipt is issued from the seller.

B. Stock is verified mechanically.

C. Appeal for materials is made from various departments.

 D. Materials are issued as per order.

a. 1A, 2B, 3C, 4D.

b. 2A, 3C, 4D, 1B.

c. 4A, 2C, 3D, 1B.

d. 3B, 2D, 4C, 1A.

9. Components of a CRM system are: 1.

Users

2. Hardware and Operating Systems

3. CRM Software

4. Business Processes

a. 3 &4

b. 1, 2, 3 & 4

c. 2 & 4

d. 1,2 & 3
10. State whether the following are True/False.

1. HRM defines enterprise planning for work and job roles with respect to specific
language.

2. HRM defines staff selection and decides various phases of the project
according the policies of the company.

3. HRM does not facilitate recruitment process.

4. HRM deploys effective search engine to easily find and sort out the profiles that is
filtered with respect to the company’s criteria.

a. 1T, 2F, 3F, 4T

b. 1T, 2T, 3T, 4T

c. 1T, 2T, 3F, 4T

d. 1T, 2T, 3F, 4F

11. Important point to be kept in mind while evaluating ERP software is the total costs that
includes

1. Cost of license
 2. Cost of Training

3. Implementation and maintenance cost.

4. Customisation and hardware requirements costs.

a. 1, 2, & 3

b. 2, 3, & 4

c. 1, 2, 3, & 4

d. 1, 2, & 4

12. Match the following sets of topology categories and their examples. First Set:

1. Internal failure costs

2. External failure costs

3. Appraisal costs,

4. Prevention costs

Second Set:

A. Costs of scrap.
 B. Design and development of new quality equipment C. Cost of
inspecting upon arrival.

D. Warranty claims.

a. 1A, 2D, 3C, 4B

b. 1C, 2B, 3D, 4A

c. 1C, 2D, 3A, 4B

d. 1C, 2A, 3B, 4D

13. World Software automatically allows the user to,

1. Selectively mix, match and integrate software applications.

2. Easily modify it to ongoing business, local and organisation-specific requirements.

3. Maximise productivity by shrinking the amount of training users need. 4. Add

WorldVision, its advanced graphical user interface.

a. 1 & 3

b. 2, 3, & 4

c. 1, 2, & 3
 d. 1, 2, & 4

14. Identify the statements whether true or false.

1. Consultants come up with innovations that make the packages more efficient and
flexible to implement and use.

2. New ERP packages don’t have features and functionality to cater to the needs of
businesses in all sectors.

3. The company can develop the training and testing environment for the
implementation team as they acquire the package.

4. There is no need to provide the in-house experts a through training on the features
of the package.

a. 1T, 2F, 3F & 4T

b. 1T, 2T, 3T, & 4F

c. 1F, 2T, 3F, & 4F

d. 1F, 2F, 3T, & 4F

15. Identify the statements whether true or false.

1. SAP R/3 application Reference Model provides views of R/3 processes, data models
and functions.

2. BAPIs are implemented and stored in the R/3 system as RFC modules.

3. BAPIs can be called as sets of methods that never allows external applications to
collaborate with specific R/3 business objects.

4. BAPIs gives flexibility to the second party application vendors to build

supporting applications for the R/3 system.

a. 1T, 2T, 3F & 4T

b. 1F, 2T, 3T, & 4F

c. 1F, 2T, 3F, & 4T

d. 1F, 2F, 3T, & 4F

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