Chapter 10—The Order Entry/Sales (OE/S) Process TRUE/FALSE 1. The order entry/sales (OE/S) process includes the first four steps in the order to cash process. ANS: T 2. The first step in the order-cash process is sales order processing. ANS: F 3. Customers expect convenient and timely access to information about their order from order initiation to product delivery. ANS: T 4. The OE/S process helps support the decision needs of the accounting department. ANS: F 5. One of the primary functions of the OE/S is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments. ANS: T 6. The flow of information from OE/S to marketing managers is an example of horizontal information flows. ANS: F 7. The flow of information from OE/S to the credit department is an example of vertical information flows. ANS: F 211
Transcript
Chapter 10—The Order Entry/Sales (OE/S) Process
TRUE/FALSE
1. The order entry/sales (OE/S) process includes the first four steps in the order to cash process.ANS: T
2. The first step in the order-cash process is sales order processing.ANS: F
3. Customers expect convenient and timely access to information about their order from order initiation to product delivery.ANS: T
4. The OE/S process helps support the decision needs of the accounting department.ANS: F
5. One of the primary functions of the OE/S is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments.ANS: T
6. The flow of information from OE/S to marketing managers is an example of horizontal information flows.ANS: F
7. The flow of information from OE/S to the credit department is an example of vertical information flows.ANS: F
8. For companies using enterprise systems CRM systems often share the same underlying database and gather data about the firm’s customer population.ANS: T
9. A sales order form is a business document that captures vital customer and order data and facilitates the credit-granting and shipment functions of the order entry/sales (OE/S) process.ANS: T
10. Data base management systems are designed to provide detailed data for a specific set of users while avoiding the costly development and extensive time delays that come from the development of a comprehensive data warehouse.
211
212 Chapter 10ANS: F
11. A CRM system is designed to manage all the data related to customers, such as marketing, field service, and contact management data.ANS: T
12. Sell-side systems use the Internet to automate and manage corporate vendors and purchases.ANS: F
13. Buy-side systems are designed to allow a company to market sell deliver and service goods and services to customers throughout the world via the Internet.ANS: F
14. XML is a generalized system for the customized tagging of data to enable the definition, transmission, and interpretation of data exchanged by systems over the Internet.ANS: T
15. The buzzword in CRM which means the grouping of customers into categories based on key characteristics is itemization.ANS: F
16. In the OE/S process context diagram, the one input that creates the seven outputs of inventory sales update, shipping’s billing notification, sales order notification, bill of lading, packing slip, payroll data for commissions, and customer acknowledgement is the customer order.ANS: T
17. When a source document provides authority for a business activity to occur, the source document is said to trigger the activity.ANS: T
18. If a check of the customer master data shows that the goods requested on a customer order are not in stock, an exception routine called a back order is initiated.ANS: F
19. A packing slip authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.ANS: F
20. A picking ticket is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.ANS: F
21. Vendor acknowledgements are sent to vendors to notify them that their orders have been accepted and to inform them of the expected delivery date.
The Order Entry/Sales (OE/S) Process 213ANS: F
22. A bill of lading is the document representing the contract between the shipping company and the common carrier.ANS: T
23. In the OE/S process level 0 diagram, the sales order notification is sent to billing/AR/CR from the bubble for validate sales order.ANS: T
24. If a customer refuses to accept a back order, then the sales order is terminated as shown by the accept data flow.ANS: F
25. A customer acknowledgement is sent to the customer to notify him or her of the order’s acceptance and the expected shipping date.ANS: T
26. A customer acknowledgement is sent to the billing department to notify them of a pending shipment.ANS: F
27. In the E-R diagram for OE/S, SALES_ORDERS activates the STOCK_PICK.ANS: T
28. In the E-R diagram for OE/S, STOCK_PICK triggers the SALES_INVOICES.ANS: F
29. In the E-R diagram for OE/S, SHIPMENTS generate the SALES_INVOICES.ANS: T
30. The marketing data is a repository of a variety of sales-oriented data, some of which results from recording sales events and some of which does not produce event data, such as a customer inquiry.ANS: T
31. The inventory master data normally contains standing data about each customer, such as name, billing and ship-to addresses, and telephone number.ANS: F
32. The customer master data is a data store that contains data identifying the particular characteristics of each customer.ANS: T
33. The completed picking ticket file provides an audit trail of authorized inventory transfers made between the warehouse and the shipping department.
214 Chapter 10ANS: T
34. Records in the sales order master data are created upon the completion of a sales order and are closed out once the order has been shipped.ANS: T
35. OCR devices that use light reflection to read differences in code patterns in order to identify a labeled item.ANS: F
36. Bar code readers are used to recognize patterns of handwritten or printed characters.ANS: F
37. Output devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called scanners.ANS: F
38. When a customer service representative enters data into the OE/S system, the first screen prompt is usually for the customer number.ANS: T
39. A tickler file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.ANS: T
40. Preformatted screens in the order entry/sales process is a control plan that involves the detailed comparison of the individual elements appearing on two source documents.ANS: F
41. One-for-one checking in the order entry/sales process is a control plan that simplifies the data entry process, and may prevent the customer service representative from omitting data, to fill in certain fields, and reject incorrectly formatted fields to reduce input errors.ANS: F
42. Online prompting in the order entry/sales process is a control plan that advises the customer service representative to check their data entries before moving on.ANS: T
43. Interactive feedback checks in the order entry/sales process is a control plan that tells the customer service representative that the order and shipments have been accepted.ANS: T
The Order Entry/Sales (OE/S) Process 21544. Customer credit check is a control plan that ensures that the organization protects its resources by dealing only with customers who have
demonstrated an ability to satisfy their liabilities.ANS: T
MULTIPLE CHOICE
1. The order entry/sales (OE/S) process is part of the __________ cycle.a. revenueb. expenditurec. conversiond. general ledger/financial reporting
ANS: A
2. The order entry/sales (OE/S) process handles the processing and shipment of a customer order while another process actually bills the customer. With such a configuration, you would not expect the OE/S system to interface directly with the __________.a. billing/accounts receivable/cash receipts processb. inventory processc. general ledger processd. human resource process
ANS: D
3. The OE/S process includes the first four steps in the order to sales process. The order of these four steps isa. pre-sales activities, sales order processing, picking and packing, shippingb. pre-sales activities, picking and packing, sales order processing, shippingc. pre-sales activities, picking and packing , shipping, sales order processingd. none of the above
ANS: A
4. The primary function of the order entry/sales (OE/S) process includes:a. identifying decisions made by marketing personnelb. highlighting the key organizational features of the marketing functionc. producing financial statementsd. meeting the decision needs of those who manage various sales and marketing
functions
216 Chapter 10
ANS: D
5. In addition to the warehousing function, the three primary departments that you would expect to be part of a typical order entry/sales (OE/S) process are:a. sales order, shipping, and creditb. sales order, shipping, and accounts receivablec. sales order, credit, and accounts receivabled. credit, shipping, and accounts receivableANS: A
6. The ultimate goal of the OE/S process isa. to ensure accuracy of order entry and sales eventsb. to ensure increasing sales volume through the OE/S processc. to provide value to the customerd. none of the aboveANS: C
7. From the standpoint of good internal control, which of the following managers should not report (either directly or through an intermediate supervisor) to the vice president of marketing?a. manager--new product developmentb. manager--customer sales and servicec. manager--credit departmentd. manager--sales order departmentANS: C
8. When the sales order department acknowledges a customer order, it is an example of a:a. vertical information flowb. horizontal information flowc. both vertical and horizontal information flowd. neither vertical nor horizontal information flowANS: B
9. When the sales-related data are captured in the sales order department and then the information flows to the managers housed in the marketing department, it is an example of a:a. vertical information flowb. horizontal information flowc. both vertical and horizontal information flow
The Order Entry/Sales (OE/S) Process 217d. neither vertical nor horizontal information flow
ANS: A
10. Which of the following is a horizontal information flow?a. sales order department requests credit approval from credit departmentb. sales order department acknowledges the order to the customerc. warehousing sends completed picking ticket to shippingd. all of the above are horizontal information flows
ANS: D
11. With companies facing global competition, firms are recognizing that their most important asset is?a. inventoryb. machinery and equipmentc. Cashd. a happy customerANS: D
12. The OE/S process addresses the decision needs of managers of various sales and marketing functions through the use of:a. vertical information flowsb. horizontal information flowsc. both vertical and horizontal information flowsd. neither vertical nor horizontal information flowsANS: C
13. When the sales manager uses ZIP code data taken from customer order forms to plan an advertising campaign, she is using ____________ that might be associated with the OE/S process.a. horizontal information flowsb. vertical information flowsc. both vertical and horizontal information flowsd. neither vertical nor horizontal information flowsANS: B
14. Which of the following statements related to ERP support for horizontal information flows in the OE/S process is false?a. Once the sales order department releases the order to credit approval, the document
would be automatically routed electronically to the credit department and queued for
218 Chapter 10their approval.
b. Once the shipping department releases the shipment, the information would be entered into the ERP system at the shipping location to record the order as shipped.
c. An ERP system requires the business to change the information flows of the business process.
d. The sales order department’s response to the customer would be automatically triggered by the ERP system.
ANS: C
15. Which of the following statements identifies a recent trend in today's business environment?a. Establishing an E-Business web site provides the business with a competitive
advantage.b. The most important asset of a business today is its IT infrastructure.c. IT managers must increase their annual expenditures for hardware, software, and
telecommunication technology.d. The quality of customer service influences the ability of a business to compete in a
global marketplace.ANS: D
16. Which is an example of vertical reporting by the order entry/sales (OE/S) process?a. The credit manager notifies sales order processing that a customer's credit has been
approved.b. Sales by geographical region are reported to the manager of customer sales and
service.c. The shipping department notifies sales order processing of all shipments made for
a particular period of time.d. The sales order department acknowledges a customer order.ANS: B
17. ______________ applications in organizations are usually viewed as being focused on either operational or analytical applications.a. data miningb. data warehousingc. data entryd. market segmentationANS: B
The Order Entry/Sales (OE/S) Process 21918. ______________ is intended to allow the use of sophisticated statistical and other analytical software to help an organizations’s members develop
insights about customers, processes and markets..a. data miningb. data entryc. e-commerce moduled. market segmentationANS: A
19. For a company using an ERP system, what is the most effective tool to assist marketing managers in identify smaller portions of the customer population?a. e-commerce moduleb. data entryc. data martd. market segmentation
ANS: C
20. ___________ systems use the Internet to automate and manage vendors and purchases with the predominate technology being electronic data interchange (EDI).a. Customer relationship managementb. Buy sidec. Sell sided. none of the above
ANS: B
21. ___________ applications can handle both B2B and B2C transactions.a. Customer relationship managementb. Buy sidec. Sell sided. none of the aboveANS: C
22. The grouping of customers into categories based on key characteristics is calleda. customer relationship managementb. segmentationc. XML
220 Chapter 10d. web services
ANS: B
23. In the context diagram for an order entry/sales (OE/S) process the OE/S process has 6 outputs which include all of the following excepta. the billing/accounts receivable/cash receipts processb. the carrierc. the general ledger processd. the marketing process
ANS: D
24. A data flow or event that causes a process to begin is called a:a. ticklerb. triggerc. documentd. validity check
ANS: B
25. A process for out-of-the-ordinary or erroneous events is called:a. exception routineb. summary reportc. corrective routined. normal routine
ANS: A
26. An example of a "rejection procedure" is a(n):a. back order processb. inventory subroutinec. customer acknowledgment processd. sales order processing process
ANS: A
The Order Entry/Sales (OE/S) Process 22127. In a logical DFD for the order entry/sales (OE/S) process, which of the following data stores would you expect to be updated by the process
28. In a logical DFD for the order entry/sales (OE/S) process, which of the following data stores is least likely to interact with the process validate sales order?a. general ledgerb. accounts receivable master datac. marketing datad. inventory master data
ANS: A
29. In a typical order entry/sales (OE/S) process, validating a sales order likely would involve all of the following processes except:a. checking the customer's creditb. verifying inventory availabilityc. completing the sales orderd. completing the picking ticket
ANS: D
30. Before a shipping notice is prepared by shipping personnel, they should match the details of which of the following pairs of data flows?a. The picking ticket and a copy of the sales order earlier sent to shipping from the order
entry department.b. The completed picking ticket and a copy of the sales order earlier sent to shipping from
the order entry department.c. A copy of the sales order earlier sent to shipping from the order entry department and the
bill of lading.d. The completed picking ticket and the bill of lading.
ANS: B
222 Chapter 1031. According to the logical flow diagrams of the OE/S system, which of the following data stores provides data to the system but is not updated by it?
a. shipping notice datab. sales order master datac. marketing datad. customer master data
ANS: D
32. For a typical order entry/sales (OE/S) process to check a customer's credit, all of the following data stores likely would be consulted except the:a. inventory master datab. customer master datac. accounts receivable master datad. sales order master data
ANS: A
33. A document that is used when filling a sales order to authorize the movement of goods from a warehouse to shipping is called a:a. shipping orderb. packing slipc. picking ticketd. blind authorization
ANS: C
34. In an order entry/sales (OE/S) process, you could expect that a sales order notification would be sent toa. the billing/accounts receivable/cash receipts processb. the customerc. the general ledger processd. the warehouse
ANS: A
35. At the time that the shipping notice is prepared and disseminated, two data stores within the order entry/sales (OE/S) process normally are updated. Those two data stores are the:a. customer and accounts receivable master datab. accounts receivable and sales order master datac. accounts receivable master and shipping notice data
The Order Entry/Sales (OE/S) Process 223d. sales order master and inventory master data
ANS: D
36. Which of the following documents represents a formal "contract" between two parties?a. shipping's inventory notificationb. packing slipc. customer acknowledgmentd. bill of lading
ANS: D
37. Which of the following data stores is designed primarily to serve the vertical information needs of the organization rather than the horizontal information flows?a. inventory master datab. marketing datac. shipping notice datad. customer master data
ANS: B
38. Which of the following data is least likely to be stored in the customer master data?a. customer numberb. billing addressc. ship-to addressd. open invoices
ANS: D
39. Which document may show a number of items which are different from the number of items actually shipped to a customer?a. completed picking ticketb. bill of ladingc. sales orderd. packing slip
224 Chapter 10
ANS: C
40. In an entity-relationship (E-R) diagram for the order entry/sales (OE/S) process, you would expect that the word trigger would appear in the diamond showing the relationship between which of the following pairs of entities?a. CUSTOMER and SALES ORDERb. CUSTOMER and SHIPMENTc. STOCK PICK and SHIPMENTd. SALES INVOICE and SHIPMENT
ANS: C
41. Which of the following attributes would not be contained in the related relational table?a. customer_street attribute in the Customers relationb. quantity_on_hand in the Inventory relationc. shipping_company in the Sales Order relationd. invoice_total in the Sales Order relation
ANS: D
42. In a database containing (among others) four relations--CUSTOMERS, SALES ORDERS, SALES_ORDER Line item INVENTORY, and SHIPMENTS--you would expect that a combination of the SO_No and Item_No attributes would be the primary key for the __________ relation.a. CUSTOMERSb. SALES ORDERSc. SALES_ORDER Line item INVENTORYd. SHIPMENTS
ANS: C
43. Which of the following goals is not an example of a process goal of the typical order entry/sales (OE/S) process?a. to provide timely responses to customer inquiriesb. to provide timely acknowledgments of customer ordersc. to provide timely updates to general ledger accountsd. to provide timely shipments of goods to customers
ANS: C
The Order Entry/Sales (OE/S) Process 22544. In constructing a control matrix for an order entry/sales (OE/S) process, the principal data input(s) to the information system likely would be:
a. customer inquiries and customer order inputsb. customer inquiries and shipping notice inputsc. customer order and shipping notice inputsd. customer order
ANS: C
45. The file most important for ensuring validity of inputs is the:a. customer master datab. accounts receivable master datac. marketing datad. completed picking ticket data
ANS: A46. The primary reason that direct entry of sales order data by sales personnel enhances efficiency is because:
a. it increases the likelihood of erroneous data being inputb. sales personnel can enter data faster than data entry clerksc. fewer data items need to be entered by sales personneld. the need for data entry clerks is eliminated
ANS: D
47. The control plan preformatted screens is directed primarily toward achieving the information process control goal of ensuring:a. sales order input validityb. sales order input accuracyc. sales order input completenessd. sales order update completeness
ANS: B
48. The control plan interactive feedback check helps to achieve the sales order input control goal of:a. sales order input validityb. sales order input accuracyc. sales order input completenessd. shipping notice input accuracy
226 Chapter 10
ANS: C
49. In the OE/S process, the document that represents an independent authorization to ship goods to the customer is the:a. bill of ladingb. sales orderc. customer acknowledgmentd. none of the above
ANS: B
50. In the control matrix of the OE/S process, regarding shipping notice inputs, which of the following control goals is ensured by the control plan “compare input data with master data”?a. input completeness and input accuracyb. input completeness and input validityc. input validity and input accuracyd. none of the above
ANS: C
COMPLETION
1. The order entry/sales (OE/S) process includes the first four steps in the ________________ process.ANS: order-cash
2. The first step in the order-cash process is ______________.ANS: pre-sales activities
3. _______________ expect convenient and timely access to information about their order from order initiation to product delivery.ANS: Customers
4. The OE/S process helps support the decision needs of the _____________ department.ANS: marketing
5. One of the primary functions of the ____________________ is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments.
The Order Entry/Sales (OE/S) Process 227ANS: order entry/sales (OE/S) process
6. The flow of information from OE/S to marketing managers is an example of _______________ information flows.ANS: vertical
7. The flow of information from OE/S to the credit department is an example of _______________ information flows.ANS: horizonta
8. For companies using enterprise systems, _____________________ systems often share the same underlying database and gather data about the firms customer population.ANS: CRM
9. A(n) ____________________ form is a business document that captures vital customer and order data and facilitates the credit-granting and shipment functions of the order entry/sales (OE/S) process.ANS: sales order
10. ____________________ are designed to provide detailed data for a specific set of users while avoiding the costly development and extensive time delays that come from the development of a comprehensive data warehouse.ANS: Data marts
11. A __________________________________ is designed to manage all the data related to customers, such as marketing, field service, and contact management data.ANS: customer relationship management system
12. _____________ systems use the Internet to automate and manage corporate vendors and purchases.ANS: Buy-side
13. _____________ systems are designed to allow a company to market, sell, deliver, and service goods and services to customers throughout the world via the Internet.ANS: Sell-side
14. _______________ is a generalized system for the customized tagging of data to enable the definition, transmission, and interpretation of data exchanged by systems over the Internet.ANS: XML
15. The buzzword in CRM which means the grouping of customers into categories based on key characteristics is ____________________.ANS: segmentation
228 Chapter 10
16. In the OE/S process context diagram, the one input that creates the six outputs of inventory sales update, sales order notification, bill of lading, packing slip, payroll data for commissions, and customer acknowledgement is the ______________.ANS: customer order
17. When a source document provides authority for a business activity to occur, the source document is said to ____________ the activity.ANS: trigger
18. If a check of the inventory master data shows that the goods requested on a customer order are not in stock, an exception routine called a(n) ____________________ process is initiated.ANS: back order
19. A(n) ____________________ authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.ANS: picking ticket
20. A(n) ____________________ is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.ANS: packing slip
21. ____________________ are sent to customers to notify them that their orders have been accepted and to inform them of the expected shipping date.ANS: Customer acknowledgments
22. A(n) ____________________ is the document representing the contract between the shipping company and the common carrier.ANS: bill of lading
23. In the OE/S process level 0 diagram, the ____________ notification is sent to billing/AR/CR from the bubble for validate sales order.ANS: sales order
24. If a customer refuses to accept a back order, then the sales order is terminated as shown by the __________ data flow.ANS: reject
25. In the ER diagram for OE/S, SALES_ORDERS activates the __________________.ANS: STOCK_PICK
26. In the ER diagram for OE/S, STOCK_PICK triggers the __________________.ANS: SHIPMENTS
27. In the ER diagram for OE/S, SHIPMENTS generate the __________________.
The Order Entry/Sales (OE/S) Process 229ANS: SALES_INVOICES
28. The ____________________ data is a repository of a variety of sales-oriented data, some of which results from sales order events, and some of which does not produce event data, such as a customer inquiry.ANS: marketing
29. The ____________________ data normally contains standing data about each customer, such as name, billing and ship-to addresses, and telephone number.ANS: customer master
30. The ____________________ file provides an audit trail of authorized inventory transfers made between the warehouse and the shipping department.ANS: completed picking ticket
31. Records in the ____________________ master data are created upon the completion of a sales order and are closed out once the order has been shipped.ANS: sales order
32. _________________ are devices that use light reflection to read differences in code patterns in order to identify a labeled item.ANS: Bar code readers
33. _________________ is used to recognize patterns of handwritten or printed characters.
ANS: Optical character recognition
34. Input devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called ____________.
ANS: scanners
35. When a customer service representative enters data into the OE/S system, the first screen prompt is usually for the ________________.
ANS:customer numberalternatively the answer could be customer name
36. A(n) ____________________ file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.
230 Chapter 10
ANS: tickler
37. ____________________ is a control plan that involves the detailed comparison of the individual elements appearing on two source documents.
ANS: One-for-one checking
38. ____________________ is a control plan that simplifies the data entry process, and may prevent the customer service representative from omitting data, to fill in certain fields, and reject incorrectly formatted fields to reduce input errors.
ANS: Preformatted screens
39. ____________________ is a control plan that advises the customer service representative to check their data entries before moving on.
ANS: Online prompting
40. ____________________ is a control plan that tells the customer service representative that the order and shipments have been accepted.
ANS: Interactive feedback checks
41. ____________________ is a control plan that ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.
