Chapter 6 Study Guide

1) What hardware components make up a modern laptop computer, and what does each do?

A modern laptop includes a CPU or microprocessor, memory, storage, and input/output devices. The CPU runs the computer by carrying out software instructions. Memory serves as the active workspace for the CPU. Storage keeps information for later use, including both data and software. Input and output devices receive and send data, such as user instructions, information to process, and the results of processing.

You should also understand that chips are built from semiconductors and transistors. A transistor acts like a switch that represents binary data as 1s and 0s. Billions of transistors can be packed together into a chip to perform complex computations.

2) What is Moore’s Law, and why should managers care?

Moore’s Law is the observation that computing capability grows exponentially over time. The slides also stress that it became a business plan for the semiconductor industry because firms expected innovation to continue at that pace.

Managers should care because rapid improvement in computing changes what products are possible, how cheaply they can be delivered, and how quickly markets shift. Managers are often blindsided by the rate and disruptive capabilities of technological change, so understanding this trend helps with strategic planning.

3) How has Moore’s Law enabled the IoT, cloud, and AI?

As computing power gets cheaper and more capable, firms can place processing into smaller and cheaper devices, which helps enable the Internet of Things and wearable products. Falling cost also supports cloud computing, where firms can offload complex tasks to large parallel systems. AI especially benefits because it requires intense computation, and the chapter notes that almost all AI processing is done in the cloud.

The larger idea is that cheaper computing does not just improve existing products. It creates entirely new uses. That is the connection between Moore’s Law and price elasticity of demand for technology.

4) What are the managerial implications of faster and cheaper computing for strategic planning, inventory, and accounting?

Strategically, managers must expect computing improvements to reshape industries and customer expectations. If they assume technology changes slowly, they can be caught off guard.

For inventory and operations, better computing and analytics improve forecasting, scheduling, and resource allocation. Disney is the best example in the slides: data helps determine staffing at rides and restaurants, how to stock food and souvenir locations, and how many cast members are needed in different parts of the park.

For accounting and transaction processes, faster systems can reduce transaction time and scale capacity. Disney cut turnstile transaction time by 30 percent and was able to serve thousands of additional guests per day. The managerial point is that information systems can create both efficiency gains and revenue gains.

5) How could quantum computing dramatically increase computing capabilities, and why is it not yet available to everyday users?

Quantum computing uses qubits rather than only standard binary bits. The chapter connects this to future capabilities such as hyperdetailed representations of the human body, predicting weather months in advance, and unbreakable computer security.

It is not available to everyday users because it is not yet commercially feasible. So the test idea is not “quantum exists, therefore everyone uses it,” but rather “quantum has extraordinary potential, yet practical adoption remains limited.”

6) What is the difference between memory and storage, and what should you know when buying a computer?

Memory is the computer’s temporary workspace for active processing. Storage is where information is kept for later use. Memory is tied to speed while working; storage is tied to how much you can keep and retrieve later.

You should also know the distinction between volatile and non-volatile forms. Volatile memory loses its contents when power is off, while storage preserves data.

When buying a computer, do not confuse storage size with speed of active work. Also do not confuse storage units with transfer speeds. Storage is measured in bytes, while transfer speeds are often measured in bits per second. Since 8 bits equal 1 byte, advertised transfer rates can sound larger than the actual number of megabytes per second you experience.

7) What is the magnitude of the environmental problem caused by rapid computing improvement and obsolescence?

The chapter presents this as a major global issue. Global e-waste reached 62 million tons in 2022 and is projected to rise to 74 million tons by 2030. The amount discarded in a single year is compared to throwing away all commercial aircraft ever built.

The harm is not only volume. e-waste contains toxic substances such as lead, cadmium, and mercury, which can contaminate soil and water when recycling is done poorly. Recycling is hard because parts are tiny and varied, enforcement is weak, and it can be cheaper to ship waste abroad than recycle it properly.

8) What value did Disney gain from embedding technology into manual experiences, and what value did customers get?

Customers gained convenience and smoother experiences. MagicBand can be used for park admission, hotel room entry, purchases, and even locating guests for meal delivery. MyMagic+ also helps reduce line time by booking ride reservations and spreading guests out.

Disney gained data, efficiency, and revenue. The system helps Disney know when to add staff, how to stock locations, and how to deploy cast members. Disney cut transaction time by 30 percent, served 3,000 to 5,000 additional guests per day, and guests spent more money.

This is an example of embedded technology turning operational data into strategic advantage.