Using MIS, 10e (Kroenke)

Chapter 9 Business Intelligence Systems

1) ________ is defined as information containing patterns, relationships, and trends of various

forms of data.
A) Process mining
B) Business process management
C) Business intelligence
D) Spatial intelligence
E) Pattern recognition
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.1: How do organizations use business intelligence (BI) systems?
Classification: Concept

2) Which of the following statements is TRUE of source data for a business intelligence (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 detailed level of data.
D) It refers to the hierarchical arrangement of criteria that predict a classification or a value.
E) It refers to the relative strength of data's predictive capabilities.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.1: How do organizations use business intelligence (BI) systems?
Classification: Concept

3) Business intelligence (BI) systems have five standard components called hardware, software,
data, procedures and people.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.1: How do organizations use business intelligence (BI) systems?
Classification: Concept

1
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4) Define business intelligence (BI) and BI systems.
Answer: Business intelligence (BI) systems are information systems that process operational,
social, and other data to identify patterns, relationships, and trends for use by business
professionals and other knowledge workers. 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.1: How do organizations use business intelligence (BI) systems?
Classification: Concept

5) ________ is the process of obtaining, cleaning, organizing, relating, and cataloging source
data.
A) Data entry
B) Data acquisition
C) Data mining
D) Data encryption
E) Data scrubbing
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

6) Which of the following is a fundamental category of business intelligence (BI) analysis?

A) automation
B) encapsulation
C) data hiding
D) data mining
E) cataloging
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

2
Copyright © 2018 Pearson Education, Inc.
7) ________ delivers business intelligence to users without any request from the users.
A) Push publishing
B) Pull publishing
C) Desktop publishing
D) Accessible publishing
E) Pulse publishing
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

8) ________ requires the user to request business intelligence (BI) results.

A) Push publishing
B) Pull publishing
C) Desktop publishing
D) Accessible publishing
E) Pulse publishing
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

9) The three primary activities in the business intelligence (BI) process are to acquire data,
perform analysis, and publish results.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

10) Push publishing can deliver results according to a schedule or as a result of an event or
particular data condition.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

3
Copyright © 2018 Pearson Education, Inc.
11) Name and describe the three primary activities in the business intelligence (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 four
fundamental categories of BI analysis are reporting, data mining, BigData, 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.2: What are the three primary activities in the BI process?
Classification: Concept

12) In large organizations, a group of people manage and run a(n) ________, which is a facility
for managing an organization's BI data.
A) OLAP cube
B) neural network
C) data warehouse
D) Web server
E) information tank
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

13) ________ refers to the source, format, assumptions and constraints, and other facts about the
data.
A) Clickstream data
B) Dimensional data
C) Outsourced data
D) Metadata
E) Attributed data
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

4
Copyright © 2018 Pearson Education, Inc.
14) Problematic operational data is termed as ________.
A) metadata
B) rough data
C) dirty data
D) granular data
E) septic data
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

15) ________ is a term that refers to the level of detail represented by the data.
A) Granularity
B) Intricacy
C) Interoperability
D) Complexity
E) Identifiable
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

16) When an area code changes the phone number for a given customer before the change will
not match the customer's number afterward. This is an example of ________.
A) missing values
B) inconsistent data
C) dirty data
D) data not integrated
E) septic data
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

5
Copyright © 2018 Pearson Education, Inc.
17) A particular BI analysis might require data from an ERP system, an e-commerce system, and
a social networking application, but such a data collection will likely have relationships that are
not represented in primary key/foreign key relationships. This is an example of ________.
A) missing values
B) inconsistent data
C) dirty data
D) data not integrated
E) septic data
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

18) Capturing customers' clicking behavior is referred to as ________.

A) Clickstream data
B) Dimensional data
C) Outsourced data
D) Metadata
E) Attributed data
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

19) Which of the following phenomena states that the more attributes there are, the easier it is to
build a model that fits the sample data?
A) attribute paradox
B) curse of dimensionality
C) uncertainty principle
D) economies of scale
E) Murphy's law
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

6
Copyright © 2018 Pearson Education, Inc.
20) A ________ takes data from the data manufacturers, cleans and processes the data, and
locates the data on the shelves.
A) data link layer
B) data mine
C) data warehouse
D) data model
E) data bus
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

21) A data ________ is a data collection, smaller than the data warehouse that addresses the
needs of a particular department or functional area of the business.
A) mart
B) mine
C) cube
D) model
E) conduit
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

22) 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 the needs of a particular department or functional area of a business.
D) Data marts are larger than data warehouses.
E) Data marts contain only metadata for data warehouses.
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

7
Copyright © 2018 Pearson Education, Inc.
23) Operational data is structured for fast and reliable transaction processing.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

24) Data warehouses may include data that is purchased from outside sources.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

25) Granularity is a term that refers to the level of detail represented by the data.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

26) It is better to have data with too coarse a granularity than too fine.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

27) Data mart is another term used for a data warehouse.

Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

28) A data mart is larger than a data warehouse.

Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept
8
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29) Describe the functions of data warehouses and the need for them.
Answer: Operational data is structured for fast and reliable transaction processing. It is seldom
structured in a way that readily supports BI analysis. Finally, BI analyses can require
considerable processing; placing BI applications on operational servers can dramatically reduce
system performance. Hence, most organizations extract operational data for BI processing. For
small organizations, the extraction may be as simple as an Access database. The 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
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

30) 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)
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

31) Describe the features of a data mart.

Answer: A data mart is a data collection, smaller than the data warehouse that addresses the
needs of a particular department 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.3: How do organizations use data warehouses and data marts to acquire data?
Classification: Concept

9
Copyright © 2018 Pearson Education, Inc.
32) ________ is a BI application that inputs data from one or more sources and applies reporting
operations to that data to produce business intelligence.
A) An OLAP application
B) A reporting application
C) A NoSQL application
D) A trans enterprise application
E) A classful application
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

33) Which of the following is a basic operation used by reporting applications to produce
business intelligence?
A) coalescing
B) transposing
C) dispersing
D) calculating
E) diffusing
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

34) ________ analysis is a way of analyzing and ranking customers according to their
purchasing patterns.
A) Regression
B) CRM
C) Market-basket
D) RFM
E) Cluster analysis
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

10
Copyright © 2018 Pearson Education, Inc.
35) RFM analysis is used to analyze and rank customers according to their ________.
A) purchasing patterns
B) propensity to respond to marketing stimulus
C) socioeconomic status
D) motivation and needs
E) receptivity to promotions
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

36) 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 anything for a while, 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 anything for a while and it did not order frequently, but 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.
E) SAMCROW has ordered recently, but orders infrequently, and it orders the most expensive
goods.
Answer: C
Diff: 3
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Application

37) Achilles Gear has four major retail customers. Based on the following RFM scores of these
customers, the sales team at Achilles' should attempt to up-sell more expensive sporting goods to
________.
A) Five Star Stores with an RFM score of 214
B) Goalkeeper with an RFM score of 551
C) Pelican Stores with an RFM score of 113
D) Cable Sports Inc. with an RFM score of 545
E) WindyRiver Sports with an RFM score of 225
Answer: B
Diff: 2
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Application
11
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38) Ajax Inc. 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 is most likely to
have an RFM score of ________.
A) 155
B) 511
C) 555
D) 151
E) 515
Answer: A
Diff: 3
AACSB: Analytical Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Application

39) Opezim Plastics has been supplying raw materials to JM Toys for five years. JM Toys has an
RFM score of 121. With reference to the score, how should the sales team at Opezim respond to
JM Toys?
A) The sales team should contact JM Toys immediately.
B) The sales team should let go of JM Toys, for the loss will be minimal.
C) The sales team should attempt to up-sell more expensive goods to JM Toys.
D) The sales team should spend more time with JM Toys.
E) The sales team should attempt to sell directly to the CEO.
Answer: B
Diff: 2
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Application

40) OLAP stands for ________.

A) online analytical processing
B) object-based lead analysis procedure
C) object-oriented analytical protocol
D) organizational lead analysis process
E) optimal linear analytical processing
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

12
Copyright © 2018 Pearson Education, Inc.
41) The viewer of an OLAP report can change its format. Which term implies this capability?
A) processing
B) analytical
C) dimension
D) online
E) alteration
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

42) 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) accurate
B) informal
C) specific
D) dynamic
E) precise
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

43) 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
E) average net sales
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

13
Copyright © 2018 Pearson Education, Inc.
44) Which of the following accurately defines a dimension in an OLAP report?
A) It is a characteristic of a measure.
B) It is an item that is processed in the OLAP report.
C) It is a data item of interest.
D) It is referred to a decision tree.
E) It is a branch in a decision tree.
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

45) 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
E) customer location
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

46) An ________ and an OLAP report are the same thing.

A) OLAP measure
B) OLAP cube
C) OLAP dimension
D) OLAP array
E) OLAP permutation
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

14
Copyright © 2018 Pearson Education, Inc.
47) Which of the following observations about RFM and OLAP reports is TRUE?
A) RFM reports are more generic than OLAP reports.
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 to a greater extent than OLAP reports.
E) RFM reports are more easily manipulated than OLAP reports.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

48) OLAP provides the ability to sum, count, average, and perform other simple arithmetic
operations on groups of data.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

49) An OLAP cube and an OLAP report are the same thing.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

50) An advantage of OLAP reports is their ability to let users drill down into the data.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

15
Copyright © 2018 Pearson Education, Inc.
51) 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
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

52) Explain the concept of RFM analysis.

Answer: RFM analysis, a technique readily implemented with basic reporting operations, 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.
To produce an RFM score, the RFM reporting tool first sorts customer purchase records by the
date of their most recent (R) purchase. In a common form of this analysis, the tool then divides
the customers into five groups and gives customers in each group a score of 5 to 1. The 20
percent of the customers having the most recent orders are given an R score of 5, the 20 percent
of the customers having the next most recent orders are given an R score of 4, and so forth, down
to the last 20 percent, who are given an R score of 1. The tool then re-sorts the customers on the
basis of how frequently they order. The 20 percent of the customers who order most frequently
are given an F score of 5, the next 20 percent of most frequently ordering customers are given a
score of 4, and so forth, down to the least frequently ordering customers, who are given an F
score of 1. Finally, the tool sorts the customers again according to the amount spent on their
orders. The 20 percent who have ordered the most expensive items are given an M score of 5, the
next 20 percent are given an M score of 4, and so forth, down to the 20 percent who spend the
least, who are given an M score of 1.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

16
Copyright © 2018 Pearson Education, Inc.
53) What is OLAP? Explain 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.4: How do organizations use reporting applications?
Classification: Concept

54) ________ 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
E) Data clustering
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

55) Which of the following terms is used as a synonym for data mining?
A) regression analysis
B) data warehousing
C) knowledge discovery in databases (KDD)
D) parallel processing in databases (PPD)
E) data spelunking
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

17
Copyright © 2018 Pearson Education, Inc.
56) Which of the following statements is TRUE about unsupervised data mining?
A) Analysts do not create a model or hypothesis before running the analysis.
B) Neural networks are a popular unsupervised data mining application.
C) Unsupervised data mining requires tools such as regression analysis.
D) Data miners develop a model prior to the analysis and apply statistical techniques to data.
E) Hypotheses must be made before running the analysis.
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

57) A(n) ________ is a complicated set of possibly nonlinear equations.

A) data warehouse
B) neural network
C) expert system
D) online analytical processing (OLAP) cube
E) artificial intelligence
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

58) In ________, statistical techniques can identify groups of entities that have similar
characteristics.
A) regression analysis
B) cluster analysis
C) supervised data mining
D) neural networks
E) metadata matching
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

18
Copyright © 2018 Pearson Education, Inc.
59) Samuel, a researcher, deduces that single women between the ages of 25 and 30, who usually
live in the suburbs and make thrifty purchases, prefer a particular brand of washing machines. In
this case, Samuel uses ________ to understand customer behavior.
A) supervised data mining
B) cluster analysis
C) neural networks
D) market-basket analysis
E) metadata matching
Answer: B
Diff: 2
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Application

60) In ________, 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
E) metadata matching
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

61) 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
E) metadata matching
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

19
Copyright © 2018 Pearson Education, Inc.
62) Matt, a sales analyst, predicts the sale of luxury cars by formulating an equation that uses
variables such as the customer's age and monthly salary. Which of the following methods does
Matt use in this case?
A) BigData analysis
B) regression analysis
C) market-basket analysis
D) cluster analysis
E) analytical hierarchical analysis
Answer: B
Diff: 2
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Application

63) Which of the following techniques determine sales patterns?

A) regression analysis
B) market-basket analysis
C) neural networks
D) cluster analysis
E) seasonal grouping
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

64) In marketing transactions, the fact that customers who buy product X also buy product Y
creates a ________ 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) double-sales
E) quid pro quo
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

20
Copyright © 2018 Pearson Education, Inc.
65) In market-basket terminology, ________ describes the probability that two items will be
purchased together.
A) support
B) confidence
C) lift
D) dimension
E) connection
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

66) Judy is analyzing weekly sales transactions at a supermarket. She finds that the support value
for bed sheets and pillow covers is 0.9. Given this information, which of the following
statements is TRUE?
A) The sale of bedsheets and pillow covers is lower than other items.
B) Customers who buy bedsheets usually also buy pillow covers.
C) The supermarket carries a large stock of bedsheets and pillow covers.
D) Customers who buy bedsheets rarely also buy pillow covers.
E) The sales of bed sheets far exceeds the sales of pillow covers.
Answer: B
Diff: 3
AACSB: Reflective Thinking
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Application

67) In market-basket terminology, the ratio of confidence to the base probability of buying an
item is called ________.
A) confidence
B) support
C) granularity
D) lift
E) loop
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

21
Copyright © 2018 Pearson Education, Inc.
68) A ________ is a hierarchical arrangement of criteria that predict a classification or a value.
A) value chain
B) cluster analysis
C) decision tree
D) neural network
E) sync path
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

69) Which of the following is a characteristic of decision trees?

A) They are a supervised data mining technique.
B) They are used to select variables that are then used by other types of data mining tools.
C) Special training is required to understand and implement them.
D) Partial data or multiple variables cannot be used while using decision trees.
E) They produce correlation values for possible future purchases.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

70) Data mining is the application of statistical techniques to find patterns and relationships
among data for classification and prediction.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

71) In an unsupervised data mining technique, analysts do not create a model or hypothesis
before running the analysis.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

22
Copyright © 2018 Pearson Education, Inc.
72) Cluster analysis is used to identify groups of entities that have similar characteristics.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

73) Regression analysis measures the effect of a set of variables on another variable.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

74) Neural networks are popular unsupervised data mining techniques used to predict values and
make classifications.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

75) In market-basket terminology, confidence is the probability that two items will be purchased
together.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

76) A decision tree analysis is a supervised data mining technique.

Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

23
Copyright © 2018 Pearson Education, Inc.
77) 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 a data mining application 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

78) 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."
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.5: How do organizations use data mining applications?
Classification: Concept

79) Which of the following is a characteristic of BigData?

A) It is usually around 100 gigabytes in size.
B) It is generated rapidly.
C) It is processed using traditional techniques.
D) It is unstructured.
E) It is typically only text-based.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.6: How do organizations use BigData applications?
Classification: Concept

24
Copyright © 2018 Pearson Education, Inc.
80) ________ is a technique for harnessing the power of thousands of computers working in
parallel.
A) RFM analysis
B) MapReduce
C) Granularity
D) Reposition
E) Big data looping
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.6: How do organizations use BigData applications?
Classification: Concept

81) ________ includes a query language titled Pig.

A) MapReduce
B) Hadoop
C) RFM Analysis
D) Online analytical processing (OLAP)
E) Korn shell
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.6: How do organizations use BigData applications?
Classification: Concept

82) Hadoop is an open-source program supported by the Apache Foundation that implements
MapReduce on potentially thousands of computers.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.6: How do organizations use BigData applications?
Classification: Concept

25
Copyright © 2018 Pearson Education, Inc.
83) What are MapReduce and Hadoop?
Answer: MapReduce is a technique for harnessing the power of thousands of computers
working in parallel. The basic idea is that the BigData collection is broken into pieces, and
hundreds or thousands of independent processors search these pieces for something of interest.
Hadoop is an open-source program supported by the Apache Foundation that implements
MapReduce on potentially thousands of computers. Hadoop could drive the process of finding
and counting the Google search terms, but Google uses its own proprietary version of
MapReduce to do so, instead. Hadoop includes a query language titled Pig.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.6: How do organizations use BigData applications?
Classification: Concept

84) ________ 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
E) Industrial information exchange
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

85) Knowledge management (KM) benefits organizations because it ________.

A) allows distributors to work within the company premises
B) allows suppliers to work according to the organizational policies
C) enables employees to solve problems and rectify mistakes later
D) improves process quality and increases team strength
E) improves data integrity, transmission, and value
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

26
Copyright © 2018 Pearson Education, Inc.
86) In the context of knowledge management systems, ________ are rule-based systems that
encode human knowledge in the form of If/Then rules.
A) expert networks
B) expert systems
C) intelligent systems
D) decision-making systems
E) waterfall systems
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

87) Which of the following observations concerning expert systems is TRUE?

A) These systems are not affected by any changes made to it.
B) These systems have lived up to the high expectations set by their name.
C) These systems are easy to develop and maintain.
D) These systems encode human knowledge in the form of If/Then rules.
E) These systems are typically used by experts.
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

88) ________ are information systems that support the management and delivery of documents
including reports, Web pages, and other expressions of employee knowledge.
A) Decision Support Systems (DSS)
B) Online Analytical Processing (OLAP) systems
C) Content Management Systems (CMS)
D) Data Transfer Protocols (DTP)
E) Document Delivery System (DDS)
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

27
Copyright © 2018 Pearson Education, Inc.
89) ________ is the application of social media and related applications for the management and
delivery of organizational knowledge resources.
A) Business intelligence server management
B) Hyper-social knowledge management
C) Knowledge management protocol
D) Online analytical processing
E) Proto-social information management
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

90) Knowledge management was done only after the advent of social media.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

91) Expert systems are rule-based systems that encode human knowledge in the form of If/Then
rules.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

92) In expert systems, the programs that process a set of rules are called expert systems shells.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

28
Copyright © 2018 Pearson Education, Inc.
93) Explain knowledge management and its primary benefits.
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 that capital.
KM benefits organizations in two fundamental ways:
• Improve process quality
• Increase team strength
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

94) Describe expert systems and their primary disadvantages.

Answer: Expert systems are rule-based systems that encode human knowledge in the form of
"If/Then" rules. To create the system of rules, the expert system development team interviews
human experts in the domain of interest. They suffer from three major disadvantages. First, they
are difficult and expensive to develop. Second, expert systems are difficult to maintain. Finally,
expert systems were unable to live up to the high expectations set by their name.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

95) ________ is an employee directory that includes not only the standard name, email, phone,
and address but also organizational structure and expertise.
A) A data library
B) A data-linked library
C) A subscriber directory
D) A static directory
E) A rich directory
Answer: E
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.7: What is the role of knowledge management systems?
Classification: Concept

29
Copyright © 2018 Pearson Education, Inc.
96) A sales report that is current at the time the user accessed it on a Web server is an example of
a(n) ________.
A) static report
B) dynamic report
C) expert system
D) hybrid market report
E) temporal report
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

97) 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
E) IP logs
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

98) Dynamic reports are business intelligence (BI) documents that are updated at the time they
are requested.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

99) A business intelligence (BI) server extends alert/RSS functionality to support user
subscriptions.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

30
Copyright © 2018 Pearson Education, Inc.
100) Explain the difference between static and dynamic reports.
Answer: Static reports are business intelligence (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 at 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.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

101) Describe the management functions of business intelligence (BI) servers.

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. All management data needed by
any of the BI servers is stored in metadata. The amount and complexity of such data depends, of
course, on the functionality of the BI server.
Diff: 2
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.8: What are the alternatives for publishing BI?
Classification: Concept

102) ________ is a concept that computer systems will become sophisticated enough that they
can adapt and create their own software and hence adapt their behavior without human
assistance.
A) Expert systems
B) The Singularity
C) Knowledge management
D) Business intelligence systems
E) Moore's Law
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Compare and contrast different business intelligence systems
LO: 9.9: 2027?
Classification: Concept

31
Copyright © 2018 Pearson Education, Inc.