Transaction Processing Systems

and Transaction Processing Cycle

(See Diagram on 9th Slide)
Cross-functional
crosses different functional business areas (accounting,
finance, inventory management, human resources, etc.)
Transactions can include:
Banking, Financial, Stocks, etc.
Purchases & Orders (phone, Internet, direct)
from Airline reservations to Toll Booth Operations
 Value of TPS
Efficiency
Paperless Transactions
Reduce manual data entry (errors)
Speed up transaction process
Elimination of redundant steps
Online Transaction Processing (OLTP)
Real-time systems, immediate feedback
Real-time Reports and databases updates
 Batch vs. Real-time
Batch Processing Real-time Processing
transaction data are also called online
accumulated immediately processed
processed periodically Syncronization issues
used to be necessary What if two people order
because of synchronization the same product at the
problems same extact time, but there
is only one product left?
 Processing Cycle
Data Entry
Collecting and capturing transactions
No longer manual:
Old technologies Bar Codes, Magnetic Strips
(credit cards)
New technologies RFID, Smart Cards,
 Processing Cycle
Transaction Processing
Synchronization Issues:
Which transaction to process next.
Breaking ties
Dependencies
Cant schedule delivery before credit approval.
 Processing Cycle
Database Maintenance
TPS helps ensure the databases are up-to-
date and correct.
Multiple databases
A single purchase
decreases quantity Inventory Database
decrease credit Credit Card Database
increase sales Sales Database
 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).
 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?
Processing Cycle
Invoicing Invoices

Products
Customer
Shipped Orders
Shipment
Execution Customer Places an Order

Order Entry
Routing & Sales Config.
Schedule Scheduling
Routes Actual Order
Planned Shipments
Shipment
Planning
Inventory Picking List
Control
Inventory Status
OrderInvoicing
Entry Invoices
Sales Config. Product Data
Products Customer Data
Inventory Data Customer
Fulfilled Shipped Orders Prices
Credit
Orders Inventory
ShipmentLevels Status
Execution Customer Places an Order
1. Collect Orders 2. Verify 3. Authorize
Orders
order Product #s
Order Entry Credit
information In-stock
Routing & Sales Config.
Schedule Scheduling
Back Rejected
Start of Routes Actual Order
Orders Orders
Transaction Planned Shipments 4. Notify
Shipment
Customer
Customer Open
Planning Orders
Notification
Inventory Picking List Back Orders/
Control Rejected Orders
Orders ready to be fulfilled
Inventory StatusOrder Data
 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.
 Enhanced Feedback
Reduce Transactions
Customer can be notified of back order before credit
authorization.
Customer could cancel or change order
Avoids un-necessary transactions
Credit check/charge on an order that might be canceled.
Faster Feedback
Pricing or production levels could be set based on
current inventory and order status
Increase price if production cant keep up with orders
Decrease price if inventory levels are high.
 Various
Manager Reports
MIS/DSS
Change Inventory
Product Data
Price
Product/
Price DB Inventory Production
DB Data
Updates/
additions to Order
Operational Data
Data
TSP PCS
Order
Customer
DB
DB

Assembly
Customers
Line
Grunts