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NEW QUESTION: 1
The company has considered several alternatives for replacing the hardware required for a regional center's processing. An advantage of using a third-party cold site is that:
A. Travel expenses would be minimized for company personnel.
B. No additional equipment would be required at the regional centers.
C. The replacement site could be up and running in a few hours.
D. Personnel employed at the site would be familiar with company operations.
Answer: B
Explanation:
A cold site backup facility is a shell facility where the user can quickly install computer equipment and resume operations in the event of a disaster. The facility has all of the needed assets in place except the needed computer equipment and is vendor-dependent for timely delivery of equipment. Accordingly, an advantage of using a third-party cold site is the elimination of the need for additional equipment. An automobile and personal property insurer has decentralized its information processing to the extent that headquarters has less processing capacity than any of its regional processing centers.
These centers are responsible for initiating policies, communicating with policyholders, and adjusting claims. The company uses leased lines from a national telecommunications company. Initially, the company thought there would be little need for interregion communication, but that has not been the case. The company underestimated the number of customers that would move between regions and the number of customers with claims arising from accidents outside their regions. The company has a regional center in an earthquake-prone area and is planning how to continue processing if that center, or any other single center, were unable to perform its processing.