1. Define the term system. Give an example of a business system and use a context diagram to show its boundary, environment, inputs, and outputs. Systems are a set of interrelated components that work together in order to achieve a common purpose. An example of a business system is a point-of-sale system used by a retail store. 2. Define the term subsystem. Give an example of a business subsystem and identify some subsystems with which it relates. Subsystems are system components that are viewed as systems with their own sets of interrelated components. An example of a business subsystem could be breaking the sales summary from a store into a smaller system of just the produce sales summary. Both systems would include valid customer orders and sales history, but the subsystem can sort orders by month and product. 3. What are the seven key elements of a system, and what role does each element play in describing a system? The seven key elements of a system are boundary, environment, inputs, outputs, components, interfaces, and storage. Boundaries delineate which elements are in the system and outside of it. Environment includes everything outside of the system. Inputs are resources from the environment that are consumed and manipulated in the system. Outputs are resources or products that are provided to the environment by the system. Components are processes in the system that make inputs into intermediate forms or generate system outputs. Interfaces are the place where the system and the environment interact. Storage are the holding areas used to store information, energy, and materials permanently or temporarily.