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Which basic business system serves operational level analysts in an organization?
Optimization analysis system (OAS)
Decision support system (DSS)
Transaction processing system (TPS)
Executive information system (EIS)
Definition of Transaction Processing System (TPS):
A TPS handles the day-to-day business transactions of an organization, such as sales, payroll, order processing, and inventory tracking.
It is designed for operational-level analysts who need to process large volumes of routine transactions efficiently.
Purpose of TPS:
Ensures the integrity and accuracy of business transactions.
Provides operational data required for other systems like Decision Support Systems (DSS) or Management Information Systems (MIS).
Incorrect Options Analysis:
A. Optimization Analysis System (OAS): Not a standard system type in IT management.
B. Decision Support System (DSS): Focuses on tactical and strategic decision-making.
D. Executive Information System (EIS): Caters to high-level executives, not operational-level analysts.
References and Documents of Information Technology Management:
"Foundations of IT Systems" (McGraw-Hill Education).
ITIL Foundation Documentation (Axelos).
What is the bullwhip effect?
The process of stockpiling excess inventory due to incorrect product demand communication between the supplier and its partners
The optimization resulting from high visibility of all areas up and down the supply chain
A cultural trend that places value on an individual's ability to be a creator of things as well as a consumer of things
The process by which products in a network increase in value to users as the number of users increases
Understanding the Bullwhip Effect:
The bullwhip effect occurs when small fluctuations in consumer demand lead to exaggerated changes in inventory levels up the supply chain.
Miscommunication or poor demand forecasting amplifies these effects, causing overproduction or stockpiling.
Why Other Options Are Incorrect:
Option B: Refers to supply chain optimization, which is unrelated to the bullwhip effect.
Option C: Describes the maker movement, not the bullwhip effect.
Option D: Describes the network effect, unrelated to supply chain dynamics.
References:
"The Bullwhip Effect in Supply Chain Management" – MIT Sloan
Supply Chain Dynamics and Bullwhip Effect – Harvard Business Review
TESTED 06 Apr 2025
