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 –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 used to be necessary because of synchronization problems Real-time 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?

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-to- date 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 –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 –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

Order Entry Sales Config. Customer Customer Places an OrderActual Order Shipment Planning Planned Shipments Picking List Routing & Scheduling Inventory Control Shipment Execution Invoicing Inventory Status Schedule Routes Shipped Orders Invoices Products

Order Entry Sales Config. Customer Customer Places an OrderActual Order Shipment Planning Planned Shipments Picking List Routing & Scheduling Inventory Control Shipment Execution Invoicing Inventory Status Schedule Routes Shipped Orders Invoices Products Order Entry Sales Config. 1. Collect order information 2. Verify Product #’s In-stock 3. Authorize Credit 4. Notify Customer Orders Customer Rejected Orders Back Orders Notification Start of Transaction Inventory Data Inventory Levels Fulfilled Orders Product Data Prices Customer Data Credit Status Order Data Open Orders Back Orders/ Rejected Orders Orders ready to be fulfilled

Transaction Processing System An Order Entry System affects –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.

Customer DB Inventory DB Product/ Price DB Order DB Customers Grunts TSP Updates/ additions to Operational Data MIS/DSS Inventory Data Assembly Line PCS Order Data Production Data Manager Various Reports Change Product Price