This presentation is on the topic - Transaction Processing System. It is a topic in Information Technology for Managers. It includes the concept, characteristics, functions, advantages and disadvantages, types and application of TPS

1. Transaction Processing System
Presented by:
• Jaisha K J

2. Transaction Processing System (TPS)
• What isTransaction?
• What isTPS?
• Characteristics ofTPS
• Functions ofTPS
• Advantages and disadvantages ofTPS
• Types ofTPS
• Application ofTPS

3. Transaction
• A business activity between seller and buyer to exchange an asset for payment.
• Basic business operations such as customer orders, purchase orders, receipts, time cards,
invoices, and payroll checks in an organization.
Types ofTransactions:
• Internal Transactions: Those transactions, which are internal to the company and are
related with the internal working of any organization.
For example Recruitment Policy, Promotion Policy, Production policy etc.
• External Transactions: Those transactions, which are external to the organization and are
related with the external sources, are regarded as ExternalTransaction.
For example sales, purchase etc.

4. Transaction Processing System
• A Transaction Processing System (TPS) is a type of information system that collects,
stores, modifies and retrieves the data transactions of an enterprise.
• Computerized system that performs and records the daily routine transactions
necessary to conduct the business.
• These systems serve the operational level of the organization.
Examples:
• Airline reservation systems
• Electronic transfer of funds
• Bank account processing systems.

5. Transaction Processing System
TYPE : Operational-level
INPUTS : transactions, events
PROCESSING : updating
OUTPUTS : detailed reports
USERS : operations personnel, supervisors
DECISION-MAKING : highly structured
EXAMPLE: payroll, accounts payable

6. Characteristics ofTPS
• Large amounts of data are processed.
• The sources of data are mostly internal, and the output is intended mainly for an internal audience.
• Processes information on a regular basis - daily, weekly, monthly, etc.
• Large storage capacity is required (database)
• High processing speed is needed due to the high volume.
• Input and output data are structured (i.e., standardized).
• A high level of accuracy, data integrity, and security is needed.
• High reliability is required.

7. Transaction Processing System Function

8. Transaction processing systems perform input, output, storage, and processing
functions:
• Input functions include capturing data on a source document, entering the
input data into the system, and checking input data for errors, a process called
data validation
• Output functions include producing screen or paper reports, such as detail
reports, summary reports, and exception reports.
• Storage functions include storing data in files and databases, accessing stored
data, sorting stored data, and updating stored data.
• Processing functions involve the manipulation of data, including computation
and decision making
Transaction Processing System Function

9. Transaction Processing System
ADVANTAGES
• Batch or real-time processing
available
• Reduction in processing time, lead
time and order cycle time
• Reduction in inventory, personnel
and ordering costs
• Increase in productivity and customer
satisfaction
DISADVANAGES
• High setup costs
• Lack of standard formats
• Hardware and software
incompatibility

10. Types ofTPS
A. Batch Processing
• All transactions for a period of time would be collected in a group (called a batch), as input
& is processed as a unit.
• Data for all transactions to be processed is brought together and processed in a group.
• This was normally done at regular intervals, such as every hour, day, or week.
• The biggest problem with batch processing is that the master file is never current.
• Good for some applications, such as processing end of semester grades or payroll
• Batch processing is fast and cost effective for many applications.
Example: Payment by cheque
-Batch Processing -On-line transaction processing

11. Batch Processing

12. B. On-lineTransaction Processing
• A system whereby each transaction is processed immediately.
• It is interactive & each transaction is processed as it occurs.
• Files are always current when online processing is used.
• The drawback to OLTP is the high costs associated with the necessary security & fault
tolerance features.
• A person enters the data for a transaction into a system, where it is processed and the
output is received before the next input is entered
Example:-
• Mostly used in Online shopping

13. On-lineTransaction Processing

14. Application of TPS
• Order Processing
• Purchasing
• Accounts Receivables & Accounts Payables
• Receiving & Shipping
• Inventory on Hand
• Payroll

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