Homework Lance
9.1 True/False Questions
1) Business intelligence (BI) systems have only four of the five components of IS: hardware, software,
data, and people.
Answer: FALSE
Page Ref: 298
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 1
2) The software component of a BI system is called a BI application.
Answer: TRUE
Page Ref: 298
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 1
3) The three primary activities in the BI process are to acquire data, perform analysis, and publish results.
Answer: TRUE
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
4) Data acquisition is the process of creating business intelligence.
Answer: FALSE
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
5) The three fundamental categories of BI analysis are reporting, data mining, and knowledge management.
Answer: TRUE
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
6) Push publishing requires the user to request BI results.
Answer: FALSE
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
7) Report servers are specialized Web servers.
Answer: TRUE
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
8) Operational data is structured for fast and reliable transaction processing.
Answer: TRUE
Page Ref: 305
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
9) Placing BI applications on operational servers can dramatically increase system performance.
Answer: FALSE
Page Ref: 306
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
10) Data warehouses do not include data that are purchased from outside sources.
Answer: FALSE
Page Ref: 306
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
11) Problematic data are termed dirty data.
Answer: TRUE
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
12) A value of 999–999–9999 for a U.S. phone number is an example of dirty data.
Answer: TRUE
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
13) Granularity is a term that refers to the level of detail represented by the data.
Answer: TRUE
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
14) It is possible to capture the customers’ clicking behavior using clickstream data.
Answer: TRUE
Page Ref: 307-308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
15) It is better to have data with too coarse a granularity, than data with too fine a granularity.
Answer: FALSE
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
16) Data mart is another term used for a data warehouse.
Answer: FALSE
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
17) A data mart is a data collection that addresses a particular functional area of the business.
Answer: TRUE
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
18) A data mart is a lot larger than a data warehouse.
Answer: FALSE
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
19) A reporting application is a BI application that inputs data from one or more sources and applies reporting operations to that data to produce business intelligence.
Answer: TRUE
Page Ref: 309
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
20) The five basic reporting operations that produce business intelligence can all be accomplished using SQL and basic HTML or a simple report writing tool.
Answer: TRUE
Page Ref: 309
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
21) RFM analysis considers how recently (R) a customer ordered, how frequently (F) they ordered, and how much margin (M) the company made on the orders.
Answer: FALSE
Page Ref: 310
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
22) OLAP provides the ability to sum, count, average, and perform other simple arithmetic operations on groups of data.
Answer: TRUE
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
23) The remarkable characteristic of OLAP reports is that they are dynamic.
Answer: TRUE
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
24) In an OLAP report, a measure is the data item of interest.
Answer: TRUE
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
25) Total sales, average sales, and average cost are examples of dimensions used in an OLAP report.
Answer: FALSE
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
26) An OLAP cube and an OLAP report are the same thing.
Answer: TRUE
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
27) A drawback associated with OLAP reports is their inability to let users drill down into the data.
Answer: FALSE
Page Ref: 312
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
28) Data mining is the application of statistical techniques to find patterns and relationships among data for classification and prediction.
Answer: TRUE
Page Ref: 314
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
29) Knowledge discovery in databases (KDD) is used as a synonym for data mining.
Answer: TRUE
Page Ref: 314
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
30) With unsupervised data mining, analysts do not create a model or hypothesis before running the analysis.
Answer: TRUE
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
31) Cluster analysis is used to identify groups of entities that have similar characteristics.
Answer: TRUE
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
32) In supervised data mining, a model is developed after the analysis.
Answer: FALSE
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
33) Regression analysis measures the impact of a set of variables on another variable.
Answer: TRUE
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
34) Neural networks are a popular unsupervised data mining technique used to predict values and make classifications.
Answer: FALSE
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
35) In marketing transactions, the fact that customers who buy product X also buy product Y creates a cross-selling opportunity.
Answer: TRUE
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
36) In market-basket terminology, confidence is the probability that two items will be purchased together.
Answer: FALSE
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
37) In market-basket terminology, a conditional probability estimate is called lift.
Answer: FALSE
Page Ref: 317
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
38) Decision tree analysis is a supervised data mining technique.
Answer: FALSE
Page Ref: 320
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
39) A common business application of decision trees is to classify loans by likelihood of default.
Answer: TRUE
Page Ref: 321
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
40) Knowledge management enables employees to leverage organizational knowledge to work more efficiently.
Answer: TRUE
Page Ref: 322
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
41) KM streamlines operations and reduces costs by eliminating redundant or unnecessary processes.
Answer: TRUE
Page Ref: 322
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
42) Real Simple Syndication (RSS) is the single most important content function in KM applications.
Answer: FALSE
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
43) Expert systems attempt to capture human expertise and put it into a format that can be used by nonexperts.
Answer: TRUE
Page Ref: 324
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
44) Expert systems are rule-based systems that use “If . . . then” rules unlike those created by decision tree analysis.
Answer: FALSE
Page Ref: 324
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
45) Expert systems are difficult to develop, but are easy to maintain.
Answer: FALSE
Page Ref: 325
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
46) Static reports are BI documents that are fixed at the time of creation and do not change.
Answer: TRUE
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
47) Dynamic reports are BI documents that are updated at the time they are requested.
Answer: TRUE
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
48) A sales report that is current as of the time the user accessed it on a Web server is a static report.
Answer: FALSE
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
49) A BI server extends alert/RSS functionality to support user subscriptions.
Answer: TRUE
Page Ref: 327
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
50) Publishing static BI is difficult because it requires the publisher to set up database access when documents are consumed.
Answer: FALSE
Page Ref: 327
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
9.2 Multiple Choice Questions
1) ________ is defined as information containing patterns, relationships, and trends.
A) Process mining
B) Business process management
C) Business intelligence
D) Spatial intelligence
Answer: C
Page Ref: 298
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 1
2) Which of the following is true of source data for a BI system?
A) It refers to the organization’s metadata.
B) It refers to data that the organization purchases from data vendors.
C) It refers to the level of detail represented by the data.
D) It refers to the hierarchical arrangement of criteria that predict a classification or a value.
Answer: B
Page Ref: 298
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 1
3) Data ________ is the process of obtaining, cleaning, organizing, relating, and cataloging source data.
A) entry
B) acquisition
C) mining
D) encryption
Answer: B
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
4) Which of the following is a fundamental category of BI analysis?
A) automation
B) catalog
C) report servers
D) data mining
Answer: D
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
5) Push publishing delivers business intelligence ________.
A) according to a schedule or as a result of an event or particular data condition
B) through reporting, data mining, and knowledge management
C) by obtaining, cleaning, organizing, relating, and cataloging source data
D) in response to requests from users
Answer: A
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
6) ________ requires the user to request BI results.
A) Push publishing
B) Pull publishing
C) Desktop publishing
D) Accessible publishing
Answer: B
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
7) Because of the various problems with operational data, large organizations choose to extract operational data into a(n) ________.
A) OLAP cube
B) neural network
C) data warehouse
D) Web server
Answer: C
Page Ref: 306
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
8) ________ records the source, format, assumptions and constraints, and other facts about the data.
A) Clickstream data
B) Dimensional data
C) Outsourced data
D) Metadata
Answer: D
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
9) Problematic operational data are termed ________.
A) bad data
B) rough data
C) dirty data
D) granular data
Answer: C
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
10) ________ is a term used to refer to the level of detail represented by the data.
A) Granularity
B) Intricacy
C) Elaboration
D) Complexity
Answer: A
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
11) Which of the following statements is true about operational data?
A) It is always better to have data with too coarse a granularity than with too fine a granularity.
B) If the data granularity is too coarse, the data can be made finer by summing and combining.
C) Purchased operational data often contains missing elements.
D) Problematic operational data are termed rough data.
Answer: C
Page Ref: 307-308
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
12) Due to a phenomenon called the ________, the more attributes there are, the easier it is to build a
model that fits the sample data but that is worthless as a predictor.
A) attribute paradox
B) curse of dimensionality
C) uncertainty principle
D) economies of scale
Answer: B
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
13) A ________ takes data from the data manufacturers, cleans and processes the data, and then stores it.
A) data mart
B) data mine
C) data warehouse
D) data model
Answer: C
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
14) A data ________ is a data collection, smaller than the data warehouse, that addresses a particular component or functional area of the business.
A) mart
B) mine
C) cube
D) model
Answer: A
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
15) Which of the following statements is true about data marts?
A) A data mart is like a distributor in a supply chain, while a data warehouse can be compared to a retail store.
B) Data mart users possess the data management expertise that data warehouse employees have.
C) Data marts address only a particular component or functional area of a business.
D) Data marts are larger than data warehouses.
Answer: C
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
16) Which of the following statements is true about reporting applications?
A) Reporting applications deliver business intelligence to users as a result of an event or particular data condition.
B) Reporting applications consist of five standard components: hardware, software, data, procedures, and people.
C) Two important reporting applications are RFM analysis and OLAP.
D) Reporting applications produce business intelligence using highly sophisticated operations.
Answer: C
Page Ref: 309
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
17) Which of the following is a basic operation used by reporting tools to produce information from data?
A) coalescing
B) transposing
C) dispersing
D) calculating
Answer: D
Page Ref: 309
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
18) ________ analysis is a way of analyzing and ranking customers according to their purchasing patterns.
A) TQM
B) CRM
C) Market-basket
D) RFM
Answer: D
Page Ref: 310
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
19) RFM analysis is used to analyze and rank customers according to their ________.
A) purchasing patterns
B) propensity to respond to a marketing stimulus
C) socio-economic status
D) motivation and needs
Answer: A
Page Ref: 310
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
20) U.S. Steel Corp. is a well known steel manufacturing company. SAMCROW, one of the customers of U.S. Steel Corp. holds an RFM score of 111. Which of the following characteristics relates SAMCROW with its RFM score?
A) SAMCROW has ordered recently and orders frequently, but it orders the least expensive goods.
B) SAMCROW has not ordered in some time, but when it did order in the past it ordered frequently, and its orders were of the highest monetary value.
C) SAMCROW has not ordered for some time, it did not order frequently, and, when it
did order, it bought the least-expensive items.
D) SAMCROW has ordered recently and orders frequently, and it orders the most expensive goods.
Answer: D
Page Ref: 310
AACSB: Use of Information Technology; Analytic Skills
Difficulty: Hard
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
21) A sales team should attempt to up-sell more expensive products to a customer who has an RFM score of ________.
A) 311
B) 555
C) 113
D) 545
Answer: C
Page Ref: 310
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
22) Ajax is one of the customers of a well known linen manufacturing company. Ajax has not ordered linen in some time, but when it did order in the past it ordered frequently, and its orders were of the highest monetary value. Under the given circumstances, Ajax’s RFM score is most likely ________.
A) 155
B) 511
C) 555
D) 151
Answer: B
Page Ref: 310-311
AACSB: Use of Information Technology; Analytic Skills
Difficulty: Hard
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
23) How should a sales team respond to a customer who has an RFM score of 545?
A) The sales team should contact this customer immediately.
B) The sales team should let go of this customer; the loss will be minimal.
C) The sales team should attempt to up-sell more expensive goods to this customer.
D) The sales team should spend more time with this customer.
Answer: B
Page Ref: 310-311
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
24) OLAP stands for ________.
A) online analytical processing
B) object-based lead analysis procedure
C) object-oriented analytical protocol
D) organizational lead analysis process
Answer: A
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
25) The viewer of an OLAP report can change its format. Which term implies this capability?
A) processing
B) analytical
C) dimension
D) online
Answer: D
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
26) The remarkable characteristic of OLAP reports is that they are ________ , as they are online and the viewer of the report can change their format.
A) extensible
B) informal
C) specific
D) dynamic
Answer: D
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
27) An OLAP report has measures and dimensions. Which of the following is an example of a dimension?
A) total sales
B) average sales
C) sales region
D) average cost
Answer: C
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
28) Which of the following describes a dimension in an OLAP report?
A) It is a characteristic of a measure.
B) It is the item that is processed in the OLAP report.
C) It is the data item of interest.
D) It is referred to as a decision tree.
Answer: A
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
29) Which of the following is an example of a measure in an OLAP report?
A) customer type
B) purchase date
C) sales region
D) average cost
Answer: D
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
30) An ________ and an OLAP report are the same thing.
A) OLAP measure
B) OLAP cube
C) OLAP dimension
D) OLAP array
Answer: B
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
31) Which of the following observations about RFM and OLAP reports is true?
A) RFM is more generic than OLAP.
B) OLAP reports are more dynamic than RFM reports.
C) RFM reports have measures and dimensions.
D) RFM reports can drill down into the data.
Answer: B
Page Ref: 310-312
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
32) ________ is the application of statistical techniques to find patterns and relationships among data for classification and prediction.
A) Data optimization
B) Database normalization
C) Data mining
D) Data warehousing
Answer: C
Page Ref: 314
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
33) Which of the following terms is used as a synonym for data mining?
A) regression analysis
B) data warehousing
C) knowledge discovery in databases
D) parallel processing
Answer: C
Page Ref: 314
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
34) Which of the following is true of unsupervised data mining?
A) Analysts do not create a model or hypothesis before running the analysis.
B) Neural networks is a popular unsupervised data mining application.
C) Unsupervised data mining requires tools such as regression analysis.
D) Unsupervised data mining requires analysts to fit data to suggested hypotheses.
Answer: A
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
35) With ________, statistical techniques can identify groups of entities that have similar characteristics.
A) regression analysis
B) cluster analysis
C) expert systems
D) neural networks
Answer: B
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
36) With ________, data miners develop a model prior to the analysis and apply statistical techniques to data to estimate parameters of the model.
A) cluster analysis
B) unsupervised data mining
C) supervised data mining
D) click streaming
Answer: C
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
37) Which of the following is an example of a supervised data-mining technique?
A) cluster analysis
B) market-basket analysis
C) regression analysis
D) click streaming
Answer: C
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
38) Which of the following is used to show the products that customers tend to buy together?
A) regression analysis
B) market-basket analysis
C) neural networks
D) cluster analysis
Answer: B
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
39) In marketing transactions, the fact that customers who buy product X also buy product Y creates a(n) ________ opportunity. That is, “If they’re buying X, sell them Y,” or “If they’re buying Y, sell them X.”
A) cross-selling
B) value added selling
C) break-even
D) portfolio
Answer: A
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
40) In market-basket terminology, ________ is the term that describes the probability that two items will be purchased together.
A) support
B) confidence
C) lift
D) dimension
Answer: A
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
41) In market-basket terminology, the ratio of confidence to the base probability of buying an item is called the ________.
A) confidence
B) support
C) granularity
D) lift
Answer: D
Page Ref: 317
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
42) ________ is a hierarchical arrangement of criteria that predict a classification or a value.
A) A value chain
B) A cluster analysis
C) A decision tree
D) A neural network
Answer: C
Page Ref: 320
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
43) ________ is the process of creating value from intellectual capital and sharing that knowledge with employees, managers, suppliers, customers, and others who need it.
A) Intellectual property protection
B) Knowledge management
C) Business Process Reengineering
D) Repository management
Answer: B
Page Ref: 322
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
44) Which of the following is a major category of knowledge assets?
A) distributors
B) suppliers
C) customers
D) employees
Answer: D
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
45) ________ is the single most important content function in knowledge management applications.
A) Sourcing
B) Retrieving
C) Indexing
D) Sorting
Answer: C
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
46) The world’s best-known indexing engine is operated by ________.
A) Google
B) Yahoo
C) Microsoft
D) Oracle
Answer: A
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
47) ________ is a standard for subscribing to content sources.
A) Knowledge Discovery in Databases (KDD)
B) Online Analytical Processing (OLAP)
C) Real Simple Syndication (RSS)
D) Data Transfer Protocol (DTP)
Answer: C
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
48) With a(n) ________ , users can subscribe to content sources and be notified when they have been changed.
A) BI server
B) RSS reader
C) KM protocol
D) expert system
Answer: B
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
49) ________ attempt to capture human expertise and put it into a format that can be used by nonexperts.
A) Neural networks
B) Expert systems
C) Regression analysis
D) Decision trees
Answer: B
Page Ref: 324
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
50) Which of the following observations concerning expert systems is true?
A) The “If…then” rules used in these systems are created by mining data.
B) They have lived up to the high expectations set by their name.
C) They typically have fewer than a dozen rules.
D) They are difficult and expensive to develop.
Answer: D
Page Ref: 324
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
51) A sales report that is current, as of the time the user accessed it on a Web server, is an example of a(n) ________.
A) static reports
B) dynamic report
C) expert system
D) market-basket analysis
Answer: B
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
52) The ________ is the most popular BI server today.
A) Microsoft Azure
B) Microsoft Windows Vista Professional
C) Microsoft SQL Server Report manager
D) Microsoft Dynamics Solomon
Answer: C
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
53) Which of the following statements is true about BI publishing alternatives?
A) Most dynamic reports are published as PDF documents.
B) For Web servers and SharePoint, the push option is mandatory.
C) BI servers extend alert/RSS functionality to support user subscriptions.
D) Publishing static BI content requires more skill, compared to publishing dynamic BI content.
Answer: C
Page Ref: 326-327
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
54) BI servers use ________ to determine what results to send to which users and on which schedule.
A) expert systems
B) metadata
C) RSS feeds
D) neural networks
Answer: B
Page Ref: 327
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
9.3 Essay Questions
1) Define business intelligence and BI systems.
Answer: Business intelligence (BI) systems are information systems that process operational and other data to identify patterns, relationships, and trends that can be used to make predictions. These patterns, relationships, trends, and predictions are referred to as business intelligence. As information systems, BI systems have the five standard components: hardware, software, data, procedures, and people. The software component of a BI system is called a BI application.
Page Ref: 298
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 1
2) Name and describe the three primary activities in the BI process.
Answer: The three primary activities in the BI process are: acquire data, perform analysis, and publish results. Data acquisition is the process of obtaining, cleaning, organizing, relating, and cataloging source data. BI analysis is the process of creating business intelligence. The three fundamental categories of BI analysis are reporting, data mining, and knowledge management. Publish results is the process of delivering business intelligence to the knowledge workers who need it. Push publishing delivers business intelligence to users without any request from the users; the BI results are delivered according to a schedule or as a result of an event or particular data condition. Pull publishing requires the user to request BI results. Publishing media include print as well as online content delivered via Web servers, specialized Web servers known as report servers, and BI results that are sent via automation to other programs.
Page Ref: 300
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 2
3) Describe the functions of data warehouses.
Answer: Larger organizations typically create and staff a group of people who manage and run a data warehouse, which is a facility for managing an organization’s BI data. The functions of a data warehouse are to:
• Obtain data
• Cleanse data
• Organize and relate data
• Catalog data
Page Ref: 306
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
4) What are the common problems with using operational data?
Answer: The problems associated with operational data are:
• Problematic (dirty) data
• Missing values
• Inconsistent data
• Nonintegrated data
• Wrong granularity (too fine; not fine enough)
• Too much data (too many attributes; too many data points)
Page Ref: 307
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
5) Describe the features of a data mart.
Answer: A data mart is a data collection, smaller than the data warehouse, that addresses a particular component or functional area of the business. If the data warehouse is the distributor in a supply chain, then a data mart is like a retail store in a supply chain. Users in the data mart obtain data that pertain to a particular business function from the data warehouse. Such users do not have the data management expertise that data warehouse employees have, but they are knowledgeable analysts for a given business function.
Page Ref: 308
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 3
6) What is a reporting application? Name five basic reporting operations.
Answer: A reporting application is a BI application that inputs data from one or more sources and applies reporting operations to that data to produce business intelligence.
Reporting applications produce business intelligence using five basic operations:
• Sorting
• Filtering
• Grouping
• Calculating
• Formatting
Page Ref: 309
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
7) What is an RFM analysis?
Answer: RFM analysis, a technique readily implemented using reporting tools, is used to analyze and rank customers according to their purchasing patterns. RFM considers how recently (R) a customer has ordered, how frequently (F) a customer ordered, and how much money (M) the customer has spent.
Page Ref: 310
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
8) What is OLAP? What are some of its features?
Answer: Online analytical processing (OLAP) is an important reporting application. It is more generic than RFM. OLAP provides the ability to sum, count, average, and perform other simple arithmetic operations on groups of data. The remarkable characteristic of OLAP reports is that they are dynamic. The viewer of the report can change the report’s format, hence the term online. An OLAP report has measures and dimensions. A measure is the data item of interest. It is the item that is to be summed or averaged or otherwise processed in the OLAP report. Total sales, average sales, and average cost are examples of measures. A dimension is a characteristic of a measure. Purchase date, customer type, customer location, and sales region are all examples of dimensions. With an OLAP report, it is possible to drill down into the data. This term means to further divide the data into more detail.
Page Ref: 311
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 4
9) Differentiate between unsupervised and supervised data mining.
Answer: Data mining techniques fall into two broad categories: unsupervised and supervised. With unsupervised data mining, analysts do not create a model or hypothesis before running the analysis. Instead, they apply the data mining technique to the data and observe the results. With this method, analysts create hypotheses after the analysis, in order to explain the patterns found. With supervised data mining, data miners develop a model prior to the analysis and apply statistical techniques to data to estimate parameters of the model.
Page Ref: 315
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
10) What is the objective of performing a market-basket analysis?
Answer: A market-basket analysis is an unsupervised data mining technique for determining sales patterns. Such an analysis shows the products that customers tend to buy together. In marketing transactions, the fact that customers who buy product X also buy product Y creates a cross-selling opportunity. That is, “If they’re buying X, sell them Y,” or “If they’re buying Y, sell them X.”
Page Ref: 316
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 5
11) What is knowledge management?
Answer: Knowledge management (KM) is the process of creating value from intellectual capital and sharing that knowledge with employees, managers, suppliers, customers, and others who need it. Whereas reporting and data mining are used to create new information from data, knowledge management systems concern the sharing of knowledge that is known to exist, either in libraries of documents or in the heads of employees.
Page Ref: 322
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
12) What are the primary benefits of knowledge management?
Answer: The primary benefits of KM are:
1. KM fosters innovation by encouraging the free flow of ideas.
2. KM improves customer service by streamlining response time.
3. KM boosts revenues by getting products and services to market faster.
4. KM enhances employee retention rates by recognizing the value of employees’ knowledge and rewarding them for it.
5. KM streamlines operations and reduces costs by eliminating redundant or unnecessary processes.
Page Ref: 322
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
13) What are some of the technologies that are used for sharing content?
Answer: Two key technologies for sharing content are indexing and RSS. Indexing is the single most important content function in knowledge management (KM) applications. KM users need an easily accessible and robust means of determining whether content they need exists, and, if so, a link to obtain that content. Users need a keyword search that provides quick response and high document relevancy. The largest collection of documents ever assembled exists on the Internet, and the world’s best-known indexing engine is operated by Google. Real Simple Syndication (RSS) is a standard for subscribing to content sources. RSS can be thought of as an email system for content. With a program called an RSS reader, users can subscribe to magazines, blogs, Web sites, and other content sources.
Page Ref: 323
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
14) What are expert systems? What are their primary disadvantages?
Answer: Expert systems attempt to capture human expertise and put it into a format that can be used by nonexperts. They are rule-based systems that use “If . . . then” rules similar to those created by decision tree analysis. However, decision trees’ “If . . . then” rules are created by mining data. The “If . . . then” rules in expert systems are created by interviewing experts in a given business domain and codifying the rules stated by those experts. They suffer from three major disadvantages. First, they are difficult and expensive to develop. Second, expert systems are difficult to maintain. Finally, they have been unable to live up to the high expectations set by their name.
Page Ref: 324-325
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 6
15) Explain the difference between static and dynamic reports.
Answer: Static reports are BI documents that are fixed at the time of creation and do not change. A printed sales analysis is an example of a static report. In the BI context, most static reports are published as PDF documents.
Dynamic reports are BI documents that are updated at the time they are requested. A sales report that is current as of the time the user accessed it on a Web server is a dynamic report. In almost all cases, publishing a dynamic report requires the BI application to access a database or other data source at the time the report is delivered to the user.
Page Ref: 326
AACSB: Use of Information Technology
Difficulty: Easy
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
16) Describe the management functions of a business intelligence server.
Answer: Business intelligence servers provide two major functions: management and delivery. The management function maintains metadata about the authorized allocation of BI results to users. The BI server tracks what results are available, what users are authorized to view those results, and the schedule upon which the results are provided to the authorized users. It adjusts allocations as available results change and users come and go. BI servers vary in complexity and functionality, and their management function varies as well.
Page Ref: 327
AACSB: Use of Information Technology
Difficulty: Moderate
Course LO: Compare and contrast different business intelligence systems
Chapter LO: 7
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