Transaction Processing Systems

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Transaction Processing Systems:

Transaction Processing Systems

TPS are information systems that process data resulting from the occurrence of business transactions:

TPS are information systems that process data resulting from the occurrence of business transactions Transaction Processing Systems


Transactions events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments

Transaction Processing Cycle:

Transaction Processing Cycle

Data Entry:

Data Entry In this process, data is captured or collected by recording, coding, and editing activities

Traditional Data Entry:

Traditional Data Entry typically rely on the end users of an information system to capture data on source documents such as purchase orders, payroll time sheets, and sales order forms

Data Entry Activities:

Data Entry Activities The data is converted into a machine-readable medium, such as magnetic tape or magnetic disks. Typically, this means using such devices as key-to-disks systems. These media are then read by input devices that enter the data into a computer system . The data from source documents could alternatively be directly entered into a computer system, using a direct input device without the use of machine readable media.

Source Data Automation:

Source Data Automation The use of automated methods of data entry that: Captures data as early as possible after a transaction or other event occurs by using POS terminals Captures transaction data as close as possible to the source that generates the data. Salesperson at POS terminals capture and edit data right on the sales floor. Captures data by using machine-readable media initially (bar-coded tags and mag stripe credit cards), instead of preparing written source documents. Captures data that rarely changes by prerecording it on machine-readable media, or by storing it in the computer system Captures data directly without the use of data media by optical scanning of bar code packaging.

Source Data Automation:

Source Data Automation

Examples of Source Data Automation:

Examples of Source Data Automation

Electronic Data Interchange:

Electronic Data Interchange I nvolves the electronic transmission of business transaction data over telecommunications links between the computers of trading partners. Data representing a variety of business transaction documents are electronically transmitted using standard document message formats.

Benefits of EDI:

Benefits of EDI EDI eliminates the printing, mailing, checking, and handling by employees of numerous multiple-copy forms of business documents. Also , since standard document formats are used, the delays caused by mail or telephone communication between businesses to verify what a document means are drastically reduced.

Two Basic Ways in TPS:

Two Basic Ways in TPS

Batch Processing:

Batch Processing Batch Processing involves: Gathering source documents originated by business transactions, such as sales orders and invoices, into groups called batches Recording transaction data on some type of input medium, such as magnetic disc or magnetic tape Sorting the transactions in a transaction file in the same sequence as the records in a sequential master file Processing transaction data and creating an updated master file and a variety of documents and reports Capturing and storing batches of transaction data and at report sites, and then transmitting it periodically to a central computer for processing. This is known as remote job entry, or RJE

Real-Time Processing:

Real-Time Processing Online Transaction Processing (OLTP) – full-pledged real-time system for transaction processing Fault Tolerant Processing – used to protect organizations against failure of their strategic online transaction processing applications

Levels of Real-Time Processing:

Levels of Real-Time Processing Inquiry/response system . The main function of an inquiry system is information retrieval. The user of a real-time inquiry system wishes for a quick response to a request for information, such as current balance in a particular bank checking account . Data entry systems . The main function of a data entry system is the immediate but temporary collection and recording of transaction data for processing at a later date. Thus, the real-time data entry system is designed to perform only collection, conversion, and storage activities, leaving processing activities to a batch processing system .

Levels of Real-Time Processing:

Levels of Real-Time Processing File Processing systems . It performs all the activities of information systems except output. Thus, data is collected, converted, manipulated, and stored, resulting in an immediate and continual updating of files. Full Capability system . Also called Online transaction processing. It can provide immediate and continuous performance of all information system activities. Process Control Systems . A particular type of full capability real-time system is the process control system, which not only performs all information system activities but, in addition, uses its information output to control an ongoing physical process.

Levels of Real-Time Processing:

Level of Real-time Processing Business Examples Inquiry/ Response Request Customer balance in bank checking accounts using online audio-response terminals. Request number of parts on hand in inventory using online visual display terminals. Data Entry Collect sales data with online terminals and record on magnetic tape for later processing. Capture checking account transaction handled by bank tellers and record on temporary files for control purposes. File Processing Update customer files due to sales transaction data captured by online terminals. Update work-in-process inventory files due to production data captured by data recording terminals on the factory floor. Full Capability Process airline reservations using online video terminals and update online flight reservation files. Process data arising from the purchase of sale of securities using online terminals and update online securities transaction files. Process Control Control of petroleum refinery process with online sensing and control devices. Control of electric power generation and transmission. Levels of Real-Time Processing


Characteristics Characteristics Batch Processing Realtime Processing Processing of transactions Transaction data is recorded, accumulated into batches, sorted, and processed periodically. Transaction data is processed as generated File Update When batch is processed When transaction is processed Response Time/ Turnaround time Several hours or days after batches are submitted for processing A few seconds after each transaction id captured.

Batch to Real-Time Changes:

Batch to Real-Time Changes


Advantages Batch Processing Real-Time Processing It is an economical method when large volumes of transaction data must be processed. It is ideally suited for many applications where it is not necessary to update databases as transactions occur, and where documents and reports are required only at scheduled intervals. Provides immediate updating of files and immediate response to user inquiries


Disadvantages Batch Processing Real-Time Processing Master files are frequently out-of-date between scheduled processing, as are the periodic scheduled reports that are produced. Immediate updated responses to inquiries cannot be made. They use magnetic tape files as control logs or as backup files. More controls have to be built into the software and processing procedures to protect against unauthorized access or the accidental destruction of data.

Database Maintenance:

Database Maintenance a major activity of transaction processing systems so that they are always correct and up to date

Document and Report Generation:

Document and Report Generation Transaction Documents – Documents produced by transaction processing systems

Types of Transaction Documents:

Types of Transaction Documents Action Documents – documents that initiate actions or transactions on the part of their recipient . Information documents – these documents relate, confirm, or prove to their recipients that transactions have occurred . Turn-around documents – documents that are designed to be read by magnetic or optical scanning equipment. Forms produced in this manner are known as turnaround document because they are designed to be returned to the sender.

Examples of Reports:

Examples of Reports Control Listings – detailed reports that describe each transaction occurring during a period. Also called as transaction logs . Edit Reports – reports that describe errors detected during processing . Accounting Statements – reports that legally document the financial performance or status of the business.

Information Presentation and Reporting:

Information Presentation and Reporting Computer Graphics – presented as video displays, printed material, transparencies, and color slides. Presentation Graphics – the goal is to provide information in a graphical form that helps end users and managers understand business proposals and performance and make better decisions about them. Multimedia Presentations – gives end users information in a variety of media, including text and graphics displays, voice and other digitized audio, photographs, and video clips.

Four Types of Presentation Graphics:

Four Types of Presentation Graphics Line Charts Bar Charts Pie Charts Pictorial Charts Advantages 1.Shows time and magnitude of relationships well 2.Can show many points. 3.Degree of accuracy adjustable 4.Easily read 1.Good for comparisons 2.Emphasizes one point 3.Accurate 4.Easily read 1.Good for monetary comparisons 2.Good for part versus whole comparison 3.very easily understood 1.very easily understood 2.Easily constructed Disadvantages 1.Limited to less than four lines without adding complexity 2.Limited to two dimensions 3.Spacing can mislead 1.Limited to one point 2.Spacing can mislead 1.Limited usage 2.Limited precision 3.Tends to oversimplify 1.Limited usage 2.Limited Precision 3.Tends to oversimplify

Information presentation Technologies:

Information presentation Technologies Hypertext – is an important methodology for the construction and interactive use of text databases. A hypertext document is a body of text of any size in electronic form that is indexed so that it can be quickly searched by the reader. It contains only text and limited amount of graphics . Hypermedia – electronic documents that contain multiple forms of media, including text, graphics, videos, and so on. Interactive Video or multimedia systems - integrate image processing with text, audio, and video processing technologies.

Information Reporting Systems:

Information Reporting Systems The original type of management information systems, and they are still a major category of MIS. They produce information products that support many of the day-to-day decision-making needs of management.

Information Reporting Alternatives:

Information Reporting Alternatives Periodic scheduled reports – traditional form of providing information to managers, uses a pre-specified format designed to provide managers with information on a regular basis. Exception Reports – reports are produced only when exceptional conditions occur. In other cases, reports are produced periodically but contain information only about these exceptional conditions . Demand reports and responses – Information is provided whenever a manager demands it.

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