Transaction Processing Systems (TPS) are information systems used to collect, store, modify, and retrieve organizational transactions, focusing on efficiency and automation of routine business processes. Characteristics of TPS include processing large data volumes, requiring high speed, accuracy, and reliability, with both batch and online processing methods available. Common TPS applications include order processing, payroll, and inventory management.

1. 1-1
Chapter 2
Transaction Processing Systems
Transaction Processing
Systems

2. • What is a TPS?
• Characteristics of TPS
• a Transaction Processing Model
• Batch Processing vs. On-line Processing
• TPS Applications
Learning Objectives

3. • TPS is a type of IS that collect, store, modify,
and retrieve the transactions of an
organization.
• TPS designed to process routine business
transactions
• seeks time- and cost-efficiency by
automating repetitive operations in large
volumes
• Directly support Business Operations.
What is a TPS?

4. What is a TPS?
• Must be designed in conjunction with the
organization’s procedures.
• Main information processes: collecting and
storage.
• e.g,, airline reservation systems, bank’s
account processing systems, and student
registration system.

5. Value of TPS
• Efficiency
– Paperless Transactions
– Reduce manual data entry (errors)
– Speed up transaction process
– Elimination of redundant steps

6. The Major Characteristics of TPS
• Large amounts of data are processed.
• The sources of data are mostly internal, and the output is intended
mainly for an internal audience.
• The TPS processes information on a regular basis: daily, weekly,
monthly, etc.
• Large storage (database) capacity is required.
• High processing speed is needed due to the high volume.
• TPS basically monitors and collects past data.
• Input and output data are structured (i.e., standardized).
• Low computation complexity is usually evident in TPS.
• A high level of accuracy, data integrity, and security is needed.
• High reliability is required.

7. Data Input Data Processing Output Generation
Data Storage
A Transaction Processing Model
A Transaction Processing Model

8. Batch vs. On-Line
Batch Processing
• transaction data are
accumulated
• processed periodically
• used to be necessary
because of synchronization
problems
On-Line 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?

9. Transaction
Data
Data
Processing
Trans.
File
New
Master
File
Old
Master
File
Documents/
Reports
Batch Processing

10. On-line Processing
On-line
Data
Processing
Documents/
Reports
Transaction
Data
Inquiries/
Reponses
Transaction
Data
Transaction
Data

11. TPS Applications
• Order Processing
• Purchasing
• Accounts Receivables & Accounts
Payables
• Receiving & Shipping
• Inventory on Hand
• Payroll
• Student registration