A Company That Develops and Uses an Information System That

question 27

Multiple Choice

A company that develops and uses an information system that is expensive to duplicate can gain a competitive advantage by:

• A) product enhancement.
• B) creating barriers to entry.
• C) creating new products or services.
• D) establishing alliances.
• E) reducing costs.

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Definitions:

Setup Costs

The expenses involved in configuring a production process or equipment before manufacturing a new batch or type of product.

Variable Costs

Expenses that change in proportion to the level of production or business activity, such as raw materials, labor, and energy costs.

EMV

Expected Monetary Value; a decision rule used in decision analysis where you multiply the value of each possible outcome by its probability of occurrence, summing all these products to get an overall measure.