Chemical Engineer

Transaction Processing System (TPS)

* the heart of most business organizations

* supports the completion and monitoring of an organization's transactions.

Definition:

* an organized collection of people, procedures, databases, software, and devices used to develop and distribute business transactions.

* Applications include routine, day-to-day activities that occur in the normal course of business.

Characteristics of a Transaction Processing System:

Requirements:

1. Data entry and input

2. Processing

3. Storage

4. Generation of documents and reports

Characteristics in terms of data processing needs:

1. Large amount of input data

2. Large amount of output

3. Large amount of number of users impacted by the system

4. A need for efficient processing

5. Large storage requirements

6. Fast input and output capabilities

7. Low computational complexity (most applications only need simple addition, subtraction, multiplication and division)

8. A high degree of repetition in processing

9. A high potential for security-related problems

10. A severe and negative impact on the organization if the TPS breaks down and fails to operate correctly.

A simplified overview of a transaction processing system.

TRANSACTION PROCESSING ACTIVITIES:

1. Data collection - the process of capturing and gathering all data necessary to complete one or more transactions.

2. Data manipulation - the process of performing calculations and other data transformations required to complete one or more business transactions.

3. Document production - the final step of any TPS. All transactions produce one or more major documents.

Methods of Transaction Processing:

1. batch processing - all transactions were collected in groups, called batches, and processed together as such.

2. on-line processing - involves completing business transactions when they occur.

3. on-line entry with delayed processing - orders or entries are entered into the computer system when they occur, but they are not processed immediately.

Objectives of a Transaction Processing System

1. A higher degree of accuracy. One of the prime objectives of any TPS is to create error-free transactions.

2. Timely documents and reports. With older manual transaction processing systems, it could take days, weeks, or even months to produce routine documents.

3. Increased and enhanced service. To provide superior customer service because we are moving into a service-oriented economy. TPS's objective is to assist the organization in providing this type of service.

4. Labor efficiency. TPS can substantially reduce clerical and other labor requirements.

5. Data and information integrity. To ensure that all data and information stored in computerized databases are accurate, current and appropriate.

TRANSACTION PROCESSING APPLICATIONS

1. Order Processing - once orders are taken from customers, invoicing, accounts receivable, and inventory control programs can also be initiated. Order processing also indirectly triggers many other financial and accounting applications, including payroll, general ledger, and income and balance sheet statements.

- order processing applications involves collecting and gathering orders from customers and clients, whether through the mail, using telephone ordering systems, through a staff of sales representatives, or directly from a customer's computer.

2. Invoicing Applications - its output are invoices sent to customers, generated from the order processing system. The applications is developed to encourage follow-up on existing sales activities, to increase profitability, and in general to improve customer service.

3. Inventory Control Applications - it falls between order processing and the invoicing application. Orders that have been received are validated, recorded and placed as input for the inventory control program. Other inputs to the inventory control program include inventory