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 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
• Can’t 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 can’t 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