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
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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
• transaction data are
accumulated
• processed periodically
Real-time Processing
• also called online
• immediately processed
• Syncronization issues
• used to be necessary
because of synchronization
problems
• What if two people order
the same product at the
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-todate 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
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–
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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
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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
Invoices
Invoicing
Products
Customer
Shipped Orders
Shipment
Execution
Customer Places an Order
Schedule
Routes
Order Entry
Sales Config.
Routing &
Scheduling
Actual Order
Planned Shipments
Shipment
Planning
Inventory
Control
Picking List
Inventory Status
OrderInvoicing
Entry
Sales Config.
Invoices
Product Data
Products
Customer Data
Customer
Inventory Data
Prices
Fulfilled Shipped Orders
Credit
Inventory
Orders
Status
ShipmentLevels
Customer Places an Order
Execution
1. Collect
2. Verify
3. Authorize
Orders
Orders
order
Product #’s
Order Entry Credit
information
In-stock
Routing
&
Start of
Transaction
Schedule
Routes
Scheduling
Back
Orders
Planned Shipments
Customer
Sales Config.
Rejected
Actual Order
Orders
4. Notify
Shipment
Customer
Planning
Notification
Inventory
Picking List Back Orders/
Rejected Orders
Control
Orders ready to be fulfilled
Open
Orders
Inventory StatusOrder Data
Transaction Processing System
• An Order Entry System affects
–
–
–
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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.
Manager
Change
Product
Price
Various
Reports
MIS/DSS
Inventory
Data
Product/
Price DB
Updates/
additions to
Operational
Data
Inventory
DB
Production
Data
Order
Data
TSP
PCS
Order
DB
Customer
DB
Customers
Grunts
Assembly
Line