While Information Systems Can Be Used to Gain a Strategic

question 3

Multiple Choice

While information systems can be used to gain a strategic advantage, they have inherent risks. Hershey Foods, for example, crippled its Halloween sales when its complex IS system failed to support its supply and inventory needs during peak production season. This is an example of which specific IS risk?

• A) Awaking a sleeping giant
• B) Implementing IS poorly
• C) Demonstrating bad timing
• D) Running afoul of the law
• E) Mobile-based alternative removes advantages

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Definitions:

Compounding

The process of generating earnings on an asset's reinvested earnings, leading to exponential growth over time.

Present Value

The modern-day valuation of upcoming money amounts or cash flow sequences, adjusted according to a given rate of return.

Bank Account

A financial account maintained by a bank for a customer, allowing the customer to deposit and withdraw money and possibly earn interest.

Equal Payments

Installments of the same amount paid or received over a specified period for loans, mortgages, or annuities.