ERP Overview 5

Question 1

What does 'total cost of ownership (TCO)' include when evaluating an ERP system?

Accepted Answer

Licensing, implementation, training, customization, maintenance, and ongoing support costs

Answer

TCO encompasses all costs associated with an ERP over its lifetime, including hidden costs like training, upgrades, and internal IT support.

Question 2

How does ERP support demand planning in a retail company?

Accepted Answer

By analyzing historical sales data and inventory levels to forecast future product demand

Answer

ERP demand planning modules use historical data, seasonality, and trends to forecast future demand and optimize inventory levels.

Question 3

What is 'exception-based management' in the context of ERP reporting?

Accepted Answer

Focusing management attention on metrics that deviate significantly from targets or thresholds

Answer

Exception-based management uses ERP alerts and reports to highlight only the data points that fall outside acceptable ranges, saving managers time.

Question 4

Which ERP implementation strategy involves running the old and new systems simultaneously during transition?

Accepted Answer

Parallel running

Answer

Parallel running means both the legacy and new ERP systems operate simultaneously so results can be compared and verified before fully switching over.

Question 5

A company using ERP notices that purchase order data entered in the procurement module automatically updates the general ledger. This illustrates which core ERP principle?

Accepted Answer

System integration

Answer

ERP system integration means that a transaction entered in one module automatically updates all related modules, eliminating duplicate data entry.

ERP - Management Practice Test

ERP - Management Practice Test

ERP Overview 5