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Transactions
• Transactions…
• Basic business operations such as customer orders, purchase orders,
receipts, time cards, invoices, and payroll checks in an organization
• A business activity between seller and buy to exchange an asset for
payment.
• Transaction processing systems (TPS)
• A computerized system that performs and records the daily routine
transactions necessary to the conduct of the business
• Perform routine operations and serve as a foundation for other
systems
• A Transaction MIS (at operational level)
• Question: a person using ATM machine is an example of TPS?
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Batch vs. On-Line Transaction
Processing
• Two types of TPS:
• Batch processing
• A system whereby business transactions are accumulated over a
period of time and prepared for processing as a single unit or
batch
• Manufacturing products, supply chain, salaries
• On-line transaction processing (OLTP)
• A system whereby each transaction is processed immediately,
without the delay of accumulating transactions into a batch
• Real-time transaction
• Mostly in Online shopping
• Uses PCI cards(Payment Card Industry: MasterCard, Visa, Maestro,
American Express, Discover, )
• Paypal or WorldPay, WePay, eWay, ICEPAY,
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Functions of TPS
• Input Functions
• Place an order for LUNCH
• Processing Functions
• Pizza is being prepared and served
• Output Functions
• Go to counter for payment, show discount cards, get invoice
9. Characteristics of TPS
• Performance
• Rapid Processing : customers can’t wait for TPS to respond.
• Reliability: Breakdown will disrupt or stop business
• E.g.Banking, Financial, Stocks, Airline reservations
• Consistency: All parties must agree on facts of exchange
• Atomicity: All operations fail or succeed
• Data Integrity
• TPS is primarily concerned with data integrity
• Efficiency
• Paperless Transactions
• Reduce manual data entry (errors)
• Speed up transaction process
• Elimination of redundant steps
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10. Objectives of TPS
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• Ensure data and information integrity and accuracy
• Produce timely documents and reports
• Increase labor efficiency
• Help provide increased and enhanced service
• Help build and maintain customer loyalty
• Achieve competitive advantage
11. Processing Cycle
Data Entry
• Collecting and capturing transactions
• No longer manual:
• Old technologies Bar Codes, Magnetic Strips (credit cards)
• New technologies RFID, Smart Cards,
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13. Processing Cycle
Database Maintenance
• TPS helps ensure the databases are up-to-date and correct.
• Multiple databases (internal & external)
• A single purchase
• decreases quantity – Inventory Database
• decrease credit – Credit Card Database
• increase sales – Sales Database
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14. Processing Cycle
Document/Report Generation
• Examples
• purchase orders
• pay checks
• sales receipts
• invoices
• bank statements
An MIS also generates reports, but TPS reports are
operational (no analysis).
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15. Processing Cycle
Inquiry Processing
• Examples
• when was a purchase made
• does a customer have any credits on their account
• was an item scheduled for delivery
• was a package signed for
An MIS also allows for inquiries, but the information
available is summarized (or aggregated), i.e., What are
the total sales for a whole department? What is the best
selling product?
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17. Transaction Processing
System
• An Order Entry System affects
• accounting data
• inventory data
• customer data
• financial data
• invoicing data
• Enhanced Feedback:
• Inventory is updated at the point of ordering, not at the point of
fulfillment. Eliminates surprise backorders (out-of-stock
products).
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