Management Information System (MIS) Practice Exam

What is the primary purpose of a transaction processing system in organizations?

1. Support the activities within a specific functional area

2. Handle day-to-day business event data at the operational level

3. Support interaction between the firm and its customers

4. Enable customers to buy goods and services from a firm’s website

The correct answer is: Handle day-to-day business event data at the operational level

The primary purpose of a transaction processing system (TPS) is to handle day-to-day business event data at the operational level. This system is designed to manage and process routine transactions crucial to the organization’s operations, such as sales order processing, payroll, and inventory management. By capturing and storing this operational data, a TPS helps ensure accurate records of business transactions, which can be critical for operational decision-making, financial reporting, and maintaining customer satisfaction. While supporting activities in specific functional areas and enabling customer interactions are important roles within an organization, these functions typically fall under the scope of other types of management information systems. For example, functional area systems might focus on specific departments like accounting or human resources, which operate at a different level than a TPS. Similarly, while customer buying activities through a website are important, they are often supported by more specialized systems, such as e-commerce platforms or customer relationship management (CRM) systems, rather than a TPS. Thus, the ability of a transaction processing system to effectively handle and record everyday transactions at the operational level is what makes option B the most appropriate answer.