Future Market, a supermarket chain, uses bar codes for all its products. As soon as a product is sold, the information is electronically transferred to the firm's warehouse and the product's supplier

In addition, changes are automatically made to the firm's sales account and stock ledger. This helps the firm reduce its paperwork and makes managing inventory easier. This is an example of _____.
a. activity-based costing (ABC)

b. electronic data interchange (EDI)
c. an automated assembly line

d. a just-in-time inventory system

ANSWER: b

This is an example of electronic data interchange (EDI). Electronic data interchange (EDI) is the information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increase the speed and accuracy of information transmission.