Transaction Processing System

Overview

Before we go into transaction processing system, you need to know what is transaction. Transaction is defined as

Examples of transaction are:

Reference

https://www.indeed.com/career-advice/career-development/what-is-transaction-processing-system

What is a Transaction?

Before we go into transaction processing system, you need to know what is transaction. Transaction is defined as a completed agreement between a buyer and a seller to exchange goods, services, or financial assets in return for money. It can also refer to an instance or process of transacting something, such as an exchange or transfer of goods, services, or funds. Nonetheless, a transaction can involve non-monetary exchanges. A nonmonetary transaction includes the exchange of goods or services without actual money changing hands. Say for example, you register a slot for an event. This could be considered a transaction, especially if it involves the exchange of goods or services, such as providing personal information in return for the slot.

What is a Transaction Processing System?

This video I believe is an assignment work of a student. This video presents the definition of TPS.

What are the two types of transaction? Give another example other than the one presented in the video.

This video also shows the relationship between TPS with another type of IS i.e Management Information System.

Take note of the example of TPS presented in the video. What do you think are other examples of TPS?

This video presents the type of processing. It mean real time processing and batch processing. This real time processing is also known as online transaction processing or OLTP

E-Commerce TPS

In the previous section, a transaction can be sales order entry or any business process such as tickets reservation or course registration. Nonetheless, in the context of e-commerce, a TPS of an e-commerce will include order processing systems, accounting system and purchasing systems.

Order processing systems

Order processing systems is an important TPS because without order processing, business organization The processing flow of order processing typically commences with the receipt of a customer order, initiating a series of steps to fulfill the request. The system checks the availability of finished product inventory to determine if there's sufficient stock to meet the order requirements. Upon confirmation, a product pick list is generated at the warehouse, guiding staff in picking the necessary items for shipment, while concurrently adjusting inventory levels. Subsequently, a customer invoice is generated, detailing the order specifics, and included in the shipment. This integrated approach streamlines the order fulfillment process, enhancing customer satisfaction and facilitating smooth operations.

Accounting systems

The accounting system track cash flows within the organization, ensuring transparency and accuracy in financial transactions. These systems must meticulously monitor all cash inflows and outflows, providing insights into the financial health of the business

Purchasing system

The purchasing system supports procurement activities, encompassing inventory control, purchase order processing, receiving, and accounts payable functionalities. These systems enable efficient management of procurement processes, optimizing inventory levels, and ensuring timely payment to vendors, thereby contributing to the overall efficiency and effectiveness of the e-commerce operation.

Data Processing Activities

The diagram HERE (Figure 9.4 on page 364 of the textbook) shows the data processing activities that are common to TPS. Data collection begins with a transaction (e.g., taking a customer order) and results in data that serves as input to the TPS. Data should be captured at its source and recorded accurately in a timely fashion, with minimal manual effort, and in an electronic or digital form that can be directly entered into the computer. This principle of having data to be captured at its source accurately and timely with minimal manual effort is called source data automation. For example, a retail store that uses scanner to scan the bar code label on the product at the cashier counter. Using a scanner will ensure that the data will be more accurate (e.g good data) and captured quicker as compared to do it manually. The data will be then be manipulated e.g total amount of all items and stored. Reports will be generated based on the data stored in the database. Using a bar code scanner is one example capture data automatically and accurately.

*What are other technology that can be used to do this?

TPS Processing Activities

There are two types of TPS: Online Transaction Processing and Batch Processing. Let us look at the two and see what are the examples and differences between the two.

Types of TPS

There are two types of TPS: Online Transaction Processing and Batch Processing. Let us look at the two and see what are the examples and differences between the two.

Online Transaction Processing

It is used in situations where data must be processed and made immediately, such as in financial markets, eCommerce, and online gaming. Examples of real-time processing include data streaming, radar systems, customer service systems, and bank ATMs

Batch Processing

Batch processing is a method of processing a large volume of data or transactions in a group or batch, without any user interaction once the batch processing is underway. Batch processing is used for tasks that involve large volumes of data, such as payroll, end-of-month reconciliation, or settling trades overnight.

Activity

Give TWO (2) examples of a transaction processing system.
Identify at least three ways a TPS can provide a firm with a competitive advantage. Develop an example of one way a firm could gain a competitive advantage from a TPS.
What basic transaction processing activities are performed by all transaction processing systems?
Distinguish between a batch processing system and an online processing system.
Identify the missing TPS basic activity: data collection data editing, data _________, data manipulation, data storage, and document production.
The amount of support for decision making that a TPS directly provides managers and workers is low. True or False?
Which of the following is not one of the basic components of a TPS?

a. databases

b. networks

c. procedures

d. analytical models

A form of TPS where business transactions are accumulated over a period of time and prepared for processing as a single unit is called _____________.
Capturing data at its source and recording it accurately in a timely fashion, with minimal manual effort, and in an electronic or digital form that can be directly entered into the computer are the principles behind _________.
Which of the following is a set of transaction processing systems sometimes referred to as the “lifeblood of the organization?”

a. purchasing systems

b. accounting systems

c. order processing systems

d. none of the above

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