t processing system

7/29/2019 t Processing System

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Transaction Processing Systems

Manual or automaticall businesses

systematically process transactions

Function: process routine, day-to-day

business activities

Computerized TPS:

Batch

Online (real-time, OLTP)

The foundation of business systems


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Transaction Processing Systems

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 BoothOperations


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General characteristics for any

TPS Rapid response: Customers should not be made

wait a long time. The quicker the response time

the happier the customer and the more revenuethat can be collected.

Reliability: This information system involves

cash. Any mistakes here can have serious

consequences for the companies bottom line,customer satisfaction, auditors, the taxation

department and the list goes on. I think you get the

idea. You really don't want mistakes when it

comes to money.


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General characteristics contd

Inflexibility: You don't want people making up their own

rules when it comes to money. It must be performed the

same way every time. If any step is altered it becomes morelikely that a mistake may be made. With computers it must

be rigidly adhered to.

Controlled processing: There must be procedures in place

to check that everything and everyone is doing the rightthing. On the computers end is something called a

transaction processing monitor to ensure that everything is

right with the TPS but there must also be human controls to

ensure that everyone is doing the right thing.


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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


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Batch TPS

Originally, the only available option

Transactions accumulated over period of time

Time periodday, week, month

Transaction records accumulated in files

When batches are processed, what happens?

Update databases Generate reports

Generate transactions for other systems


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Batch vs. Real-time

Batch Processing

transaction data are

accumulated processed periodically

used to be necessary

because of synchronization

problems

Real-time Processing

also called online

immediately processed

Syncronization issues

What if two people order

the same product at the

same extact time, but there

is only one product left?


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Batch Processing Pros and Cons

Pros

Relatively easy to program, install and maintain

Batches can be processed during low-activity

periods

Cons

Information is delayed


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Online TPS (OLTP)

Transactions are processed in real time

Required for any modern application

where time is critical

Well supported by client/server computing

model


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Hybrid TPS

OLTP applications can feed transactions to

batch systems

Examine: GL only updated once per day

Real time order capture with delayed

processing


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TPS Activity Model

Data capture

From online entry or external system

Data validation Should be done as close to source as possible

Processing

Data manipulation

Database updating Generation of transactions for other systems

Archive Transaction

Create documents and reports


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TPS Requirements

Capture, process and store transactions

Produce reports and information about

transactions Produce transactions for other TPS

Be accurate and timely

Be efficientrequire less labor Increase customer service

Increase competitive advantage


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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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Processing Cycle

Transaction Processing

Synchronization Issues:

Which transaction to process next.

Breaking ties

Dependencies

Cant schedule delivery before credit approval.


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Processing Cycle

Database Maintenance

TPS helps ensure the databases are up-to-

date and correct. Multiple databases

A single purchase

decreases quantityInventory Databasedecrease creditCredit Card Database

increase salesSales Database


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Processing Cycle

Document/Report Generation

Examples

purchase orders pay checks

sales receipts

invoices

bank statementsAn MIS also generates reports, but TPS reports are

operational (no analysis).


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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 informationavailable 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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Processing Cycle


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Order Entry

Sales Config.

Customer

Customer Places an Order

Actual Order

Shipment

Planning

Planned Shipments

Picking List

Routing &Scheduling

Inventory

Control

Shipment

Execution

Invoicing

Inventory Status

Schedule

Routes

Shipped Orders

Invoices

Products


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Order Entry

Sales Config.

Customer

Customer Places an Order

Actual Order

Shipment

Planning

Planned Shipments

Picking List

Routing &Scheduling

Inventory

Control

Shipment

Execution

Invoicing

Inventory Status

Schedule

Routes

Shipped Orders

Invoices

Products

Order Entry

Sales Config.

1. Collect

order

information

2. Verify

Product #s

In-stock

3. Authorize

Credit

4. Notify

Customer

Orders Orders

Customer

Rejected

OrdersBack

Orders

Notification

Start of

Transaction

Inventory DataInventory

Levels

FulfilledOrders

Product Data

Prices

Customer Data

Credit

Status

Order Data

OpenOrders

Back Orders/

Rejected OrdersOrders ready to be fulfilled


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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.


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Enhanced Feedback

Reduce Transactions

Customer can be notified of back order before creditauthorization.

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 oncurrent inventory and order status

Increase price if production cant keep up with orders

Decrease price if inventory levels are high.


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CustomerDB

Inventory

DB

Product/

Price DB

OrderDB

Customers

Grunts

TSP

Updates/additions to

Operational

Data

MIS/DSS

Inventory

Data

Assembly

Line

PCS

Order

Data

Production

Data

Manager

Various

Reports

Change

Product

Price


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Management Issues

Uptime

How long can the system be down before

significant costs are incurred?

Processing Delays / Response Times

How quickly must a transaction be processed?

What is the worst online response time that isacceptable


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TPS By Function

Order Processing

Procurement & Inventory Control

Accounting


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Order Processing TPS

Order capture

Variety of means

Configuration Shipment planning and inventory allocation

Prioritize orders, select shipment locations,allocate inventory to orders

Shipping and warehousing

Picking, packing, invoicing, reporting


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Procurement

Inventory Control

Raw materials, WIP, FGI, etc

Purchase Order ProcessingGenerating, transmitting, maintaining purchase

orders

Receiving

Accounts Payable

Boundary between procurement and accounting


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Accounting

Accounts Payable

Accounts Receivable

Budget

Payroll

General Ledger

Asset Management


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Disadvantages of Functionally

Organized TPS Processing inefficiency

Data redundancy

Causes integrity problems

Inefficient

Temporal integrity problems

Caused by different times at which processing

occurs

Lack of information coherence

t processing system

Documents