ACCA PM · Chapter 1
Information, technologies and systems for organisational performance MCQs with Answers
9 multiple-choice questions on Information, technologies and systems for organisational performance for ACCA PM Performance Management. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
A mobile network operator collects millions of location pings from handsets every minute and must analyse them almost immediately to reroute traffic around congested masts. Which characteristic of big data does the need for near-instant processing best illustrate?
- A) Volume
- B) Velocity
- C) Variety
- D) Veracity
Show answer & explanation
Answer: B) Velocity
Velocity refers to the speed at which data is generated and must be captured and processed, often in real time. Volume relates to the sheer quantity of data, variety to the range of formats (structured and unstructured), and veracity to the reliability or trustworthiness of the data. The emphasis here is on near-instant analysis, so velocity is the best description.
Question 2
A fashion retailer collects customer reviews from social media to gauge reaction to a new range. Many posts are sarcastic, some come from automated accounts and some are written by competitors. Which characteristic of big data does this problem relate to most directly?
- A) Velocity
- B) Veracity
- C) Volume
- D) Value
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Answer: B) Veracity
Veracity concerns the accuracy, quality and trustworthiness of data. Sarcasm, bot-generated posts and deliberately misleading reviews all reduce how far the data can be relied upon. The issue is not the amount or speed of data but whether it is true, so veracity is the relevant characteristic.
Question 3
Which of the following is an example of an EXTERNAL source of management information for a manufacturing company?
- A) The company's payroll records
- B) Industry statistics published by a trade association
- C) Machine-hour logs from the production department
- D) The sales ledger showing customer balances
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Answer: B) Industry statistics published by a trade association
External information originates outside the organisation, such as government statistics, trade association data or competitor reports. Payroll records, machine logs and the sales ledger are all generated by the company's own systems and are therefore internal sources.
Question 4
A logistics company stores its customer database on cloud servers. Which of the following controls is designed primarily to protect the CONFIDENTIALITY of that data?
- A) Encrypting the data both in storage and in transmission
- B) Taking daily off-site backups of the database
- C) Installing an uninterruptible power supply at the head office
- D) Using check digits on customer account numbers
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Answer: A) Encrypting the data both in storage and in transmission
Encryption makes data unreadable to anyone without the decryption key, so it protects confidentiality. Backups and an uninterruptible power supply protect availability, while check digits are an input control supporting data integrity (accuracy).
Question 5
The board of a hotel group wants a system that presents summarised key performance data on a dashboard, with the ability to drill down into the detail behind any figure. Which type of information system best meets this need?
- A) A transaction processing system
- B) An executive information system
- C) An office automation system
- D) An expert system
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Answer: B) An executive information system
An executive information system (EIS) provides senior managers with summarised internal and external information, typically via dashboards, with drill-down to underlying detail. A transaction processing system records routine transactions, office automation supports clerical tasks, and an expert system applies coded expertise to give advice on specific problems.
Question 6
A subscription software business uses three years of customer usage data to build a model that estimates the probability that each current customer will cancel during the next quarter. Which type of data analytics is this?
- A) Descriptive analytics
- B) Diagnostic analytics
- C) Prescriptive analytics
- D) Predictive analytics
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Answer: D) Predictive analytics
Predictive analytics uses historical data and statistical models to forecast what is likely to happen in future, such as the probability of a customer cancelling. Descriptive analytics summarises what has happened, diagnostic analytics explains why it happened, and prescriptive analytics recommends the action to take.
Question 7
A variance report reaches the production manager three weeks after the month end, by which time the problems it highlights have already been corrected. Which quality of good information is most clearly lacking?
- A) Completeness
- B) Timeliness
- C) Accuracy
- D) Understandability
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Answer: B) Timeliness
Information must be available in time for the user to act on it. A report that arrives after the problems have already been dealt with has little value even if it is accurate, complete and clear, so timeliness is the quality that is lacking.
Question 8
Which of the following best explains why traditional management accounting reports are often considered inadequate for strategic planning?
- A) They focus mainly on internal, historical and financial data, whereas strategic planning needs external, forward-looking and non-financial information
- B) They are produced too frequently, which causes information overload for strategic planners
- C) They contain too much information about competitors and not enough about internal costs
- D) They are always prepared on a cash basis rather than an accruals basis
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Answer: A) They focus mainly on internal, historical and financial data, whereas strategic planning needs external, forward-looking and non-financial information
Strategic planning is long-term and outward-looking, requiring information about markets, competitors and the wider environment, much of it non-financial and uncertain. Traditional management accounting systems mainly record internal, historical financial data, which limits their usefulness for this purpose.
Question 9
A supermarket chain combines loyalty card transactions, weather forecasts and local events data. Its analysis reveals that sales of barbecue products in a region rise sharply two days after a forecast of warm weather at the weekend, and it now adjusts deliveries automatically. Which statement best describes the benefit obtained?
- A) The data is structured, so traditional reporting would have produced the same insight at no extra cost
- B) The benefit arises mainly from the variety of data, so velocity and volume are irrelevant to the decision
- C) The analysis replaces the need for any management judgement in setting inventory levels
- D) Big data analytics has identified a pattern that improves forecasting and inventory decisions
Show answer & explanation
Answer: D) Big data analytics has identified a pattern that improves forecasting and inventory decisions
Combining large, varied data sets can reveal relationships that conventional internal reports would not show, such as a lagged link between weather forecasts and product demand. Using this pattern to drive deliveries improves forecasting and reduces stock-outs and waste. The analysis supports rather than eliminates management judgement, and volume and velocity are still relevant because the data is large and must be processed quickly.