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Transaction Processing Systems

The document discusses Transaction Processing Systems (TPS). TPS are information systems that process routine business transactions and produce reports. They automate repetitive tasks to increase processing speed, volume, and accuracy while lowering costs. A good TPS must have high performance, continuous availability, data integrity, ease of use, and modular growth. It acts as a data source, centralizes business tasks, and improves efficiency. The main components of a TPS are input, storage, processing, output, and backup/recovery. It also discusses the various cycles within a TPS like production, finance, revenue, and expenditure.

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vinit Patidar
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35 views

Transaction Processing Systems

The document discusses Transaction Processing Systems (TPS). TPS are information systems that process routine business transactions and produce reports. They automate repetitive tasks to increase processing speed, volume, and accuracy while lowering costs. A good TPS must have high performance, continuous availability, data integrity, ease of use, and modular growth. It acts as a data source, centralizes business tasks, and improves efficiency. The main components of a TPS are input, storage, processing, output, and backup/recovery. It also discusses the various cycles within a TPS like production, finance, revenue, and expenditure.

Uploaded by

vinit Patidar
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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TRANSACTION PROCESSING SYSTEM

(TPS)
INTRODUCTION
Transaction Processing Systems are a special class of information
system designed to process business events and transactions. TPSs
perform many of the functions originally associated with data
processing. Transaction Processing Systems are the basic information
systems that process transactions and produce reports. The goal of TPS
is to automate repetitive information processing activities within the
organization to increase speed, volume of data, accuracy and to lower
the cost of processing each transaction, so it makes the organization
more effective.
Note : It support monitoring, collection, storage, processing and
dissemination of the basic business transactions of the organization
GENERAL REQUIREMENT OF A GOOD TPS
 1. Performance: Performance of TPS must be excellent; these must be
rapidly responsive because the performance of TPS is measured by the
number of transactions it can process in a given period of time.
 2. Continuous availability: TPS systems must be available during the
time period when the users are entering transactions.
 3. Data Integrity: TPS must be able to handle hardware and software
problems without corrupting data
 4. Ease of Use: TPS should be simple to understand and must provide
provision for error correction.
 5. Modular Growth: TPS should be capable of expansion/ growth at
incremental costs rather than complete replacement.
FEATURES/ CHARACTERISTICS OF TPS
Automation of routine transactions

Acts as data source for other


systems

Central for business tasks

Manages large amount of data

Improves Efficiency and


Competitive Advantage
COMPONENTS OF TRANSACTION
PROCESSING SYSTEM
 INPUT: The input function of TPS accepts data from outside
environment so that the system can process the data. TPS acquired
data from primary sources as well as from secondary sources, this
step of acquiring capturing data is called as Data Capturing.
 STORAGE: Data inputted is stored in data files and database.
Two types of data storage:
Master (main) data: It is main data of the organization which
generally remains fixed (permanent) as long as the system is in use.
e.g. Item number, item description, unit cost, unit price etc. in the
inventory master file.
Transaction (event) data: Transaction data is stored in transaction
files. It is the data which changes as the transactions occur. e.g.
Additions and removals from the stock as per the needs.
COMPONENTS OF TRANSACTION
PROCESSING SYSTEM
 PROCESSING: Processing converts raw data into
information. Processing component involves manipulation
of data. For producing output, TPS needs some
computations/ processing
 OUTPUT: The fourth component of TPS-Output obtains
three types of results- updated master file, operational
reports and special reports.
 BACKUP AND RECOVERY: This component ensures security
against lost data and recovers that in case of
malfunctioning. Back up component copies the stored
data to some other storage media.
MANUFACTURING FIRM’S TRANSACTION PROCESSING CYCLE

All the transactions which occur in any organization have multifold


effect. A transaction that initiates an action and recorded in some
away being the TPS cycle.
Purchasing Manufacturing Accounts Receivable
Purchase orders Schedules Dispatch of goods
Receipt of Materials Production Reports Sales returns
Accounts Payable Quality Control Reports Accounting/ Finance
Inventory Sales Financial Statements
Inventory levels Sales Records Expenses Accounts
Consumption Invoices/ billing Tax records
Payroll
Attendance Record Pay &
Deduction
TRANSACTION PROCESSING SYSTEM CYCLES

It consists of :
Production Cycle
Finance Cycle
Revenue Cycle
Expenditure Cycle
PRODUCTION CYCLE
It involves transactions relating to conversion of purchased
inventory into finished product, also includes material, labour
and overheads consumed in the production process. Production
cycle converts raw material into finished goods and also
account for the work in progress status.
FINANCE CYCLE
This cycle takes into consideration the accounting transactions
that record the acquisition of capital from owners and creditors
and the use of capital to acquire asses that are required for
generating funds and reporting to owners and creditors
regarding how it has been issued.
REVENUE CYCLE
It involves accounting transactions which result from economic
events and generate revenue. payment from the customer and
receiving the payment are the major events that take place in
revenue cycle.
EXPENDITURE CYCLE
It involves accounting transactions caused by events necessary
to acquire material and supplies. This cycle processes
transactions representing any of the events like: requesting the
item, receiving item, recording the details to pay for items and
actually paying.
ADVANTAGES DISADVANTAGES
 Process data regularly  Performing multiple Operations
 High degree of accuracy and at once
integrity
 Central to the business
 Produces routine reports
 Problems related to security and
 Helps in maintaining customer
hardware
loyalty
 Gains Competitive advantage
 Too much consolidated

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