Information Systems in Organizations: Types of IS (TPS, MIS, DSS, ESS) and Decision Making Questions

Question 1

Define an information system (IS).

Accepted Answer

An **information system (IS)** is a set of people, procedures and technology that **collects, processes, stores and distributes information** to support operations and decisions.

Question 2

What is TPS?

Accepted Answer

**TPS (Transaction Processing System)** records and processes routine day-to-day **transactions** of an organization.

Question 3

What is DSS?

Accepted Answer

**DSS (Decision Support System)** helps managers make **semi-structured** decisions using analysis, models and “what-if” tools.

Question 4

What is ESS/EIS?

Accepted Answer

**ESS/EIS** provides top executives with summarized strategic information and dashboards for **unstructured** decisions.

Question 5

Give one example of a TPS transaction.

Accepted Answer

Example: generating a **sales invoice** / processing a **salary payment**.

Question 6

Define structured decision.

Accepted Answer

A **structured decision** is routine and follows clear rules/steps (e.g., payroll processing).

Question 7

Explain levels of management and their information needs (any three points).

Accepted Answer

Information needs vary by level:
- **Operational**: needs detailed, frequent, real-time data for daily tasks.
- **Tactical (middle)**: needs periodic summaries and comparisons for planning/control.
- **Strategic (top)**: needs highly summarized, future-oriented and exception-based information.

Thus, IS must provide the right level of detail for each level of management.

Question 8

Explain TPS and its role in an organization (any three points).

Accepted Answer

TPS role (any three):
- records routine **transactions** accurately (sales, purchases, payroll).
- produces documents like **receipts/invoices** and updates records.
- provides reliable data for MIS/DSS reports.
- improves efficiency and reduces manual errors.

So, TPS is the foundation of organizational information systems.

Question 9

Explain MIS reports and how they help managers (any three points).

Accepted Answer

MIS reports are periodic summaries like sales, inventory, cost and budget reports.

They help managers by:
- supporting **planning** (targets and forecasts).
- supporting **control** (actual vs standard comparison).
- identifying trends and problem areas for corrective action.

Hence, MIS reports improve managerial control and coordination.

Question 10

Explain DSS and its key features (any three).

Accepted Answer

DSS supports semi-structured decisions.

Key features (any three):
- **what-if analysis** and sensitivity analysis
- uses models/simulations for forecasting
- combines internal + external data
- interactive and flexible for different scenarios

Thus, DSS improves decision quality for complex managerial problems.

Question 11

Explain ESS/EIS and its benefits for top management (any three points).

Accepted Answer

**ESS/EIS** provides top executives with summarized strategic information and dashboards.

Benefits (any three):
- quick view of **KPIs** (sales, profit, market trends)
- supports **unstructured** strategic decisions
- provides **exception alerts** (when performance deviates)
- helps monitor external environment (competition, economy)

Thus, ESS improves strategic control and faster decision making at top level.

Question 12

Differentiate between MIS and DSS (any three differences).

Accepted Answer

MIS vs DSS:
- **Decision type**: MIS supports **structured** decisions; DSS supports **semi-structured** decisions.
- **Output**: MIS gives periodic **summary reports**; DSS gives **analysis/models** (what-if, simulation).
- **Flexibility**: MIS reports are more routine; DSS is more interactive and flexible.

Hence, DSS is used when judgement and analysis are needed beyond routine reports.

Question 13

Differentiate TPS, MIS, DSS and ESS with a table.

Accepted Answer

### **TPS vs MIS vs DSS vs ESS**

| Basis | **TPS** | **MIS** | **DSS** | **ESS/EIS** |
|---|---|---|---|---|
| Main users | operational staff | middle managers | managers/analysts | top executives |
| Decision type | **structured** | structured | **semi-structured** | **unstructured** |
| Output | invoices, receipts | periodic summaries | models + what-if | dashboards/KPIs |
| Example | payroll, billing | sales report | pricing simulation | CEO dashboard |

This table clearly shows how IS types differ by level, output and decision support.

Question 14

Explain structured, semi-structured and unstructured decisions with examples and a flowchart.

Accepted Answer

### **Types of Decisions and IS Support**

- **Structured decisions**: routine, rule-based (example: payroll). Supported by **TPS/MIS**.
- **Semi-structured decisions**: part rules + part judgement (example: deciding reorder level). Supported by **DSS**.
- **Unstructured decisions**: unique, judgement-heavy (example: entering a new market). Supported by **ESS**.

```text
Structured (TPS/MIS) → Semi-structured (DSS) → Unstructured (ESS)
More rules                                  More judgement
```

Thus, different IS types support different decision situations in organizations.

Question 15

Explain how information systems support decision making at different levels with a flowchart.

Accepted Answer

### **IS Support for Decision Making (levels)**

Information systems provide the right information based on management level.

- **Operational level**: TPS provides transaction details for daily operations.
- **Middle level**: MIS provides periodic reports; DSS provides analysis for semi-structured problems.
- **Top level**: ESS provides strategic dashboards and external trend information.

```text
TPS (transactions) → MIS (summaries) → DSS (analysis) → ESS (dashboards)
            → Better decisions at operational, tactical and strategic levels
```

Hence, IS improves speed, accuracy and quality of decisions across the organization.

Information Systems in Organizations: Types of IS (TPS, MIS, DSS, ESS) and Decision Making

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