Transaction

Processing, Electronic
Commerce, and
Enterprise Resource
Planning Systems
Transaction Processing

Bel Air McDonalds

 TPS, MIS, DSS, and AI/ES

Transaction Processing Systems (TPS)

• Performs routine operations and serve as a
foundation for other systems.
AI/ES

Transactions DSS
• The basic business operations such as
customer orders, purchase orders,
receipts, time cards, invoices, and MIS
payroll checks in an organization.

TPS
Sales/Inventory/Order Transactions

Record sale/date/time.
Update inventory.
Price/description of item

EDI Electronic Data Interchange (Order)

Shipping
 TPS, MIS, DSS, and AI/ES

Information Less More Less More

AI/ES

DSS Decision Complex

Routine support I/O processing/
MIS analysis

TPS
Data More Less More Less
 Batch vs On-line Processing

Batch processing
• All transactions are accumulated over a
period of time and processed as a single
unit.
• Typical periods: daily, weekly,
biweekly, monthly, etc.
•Examples
•Payroll
•Billing

Transactions
 Batch Schematic

Data entry
Input
of accumulated Output
transactions (batched)

8
 Batch vs On-line Processing
On-Line Transaction Processing (OLTP))
• All transactions are processed immediately, without
delay.
• Also called Real-time transaction processing.

Airline Hotel Car

Reservations Reservations Rentals
 On-line Schematic

Terminal
Terminal Terminal

Output

Terminal Immediat
e
processin
g
of each
8 Terminal
Terminal
transactio
n
 On-line Delayed Transaction Processing
On-Line Delayed Transaction Processing
• All transactions are entered into the computer when
they occur, but are processed at a later time.

Catalog Orders Deposits

 Simplified View of a TPS
Data Input Processing
Document
and
Reports

Documents
Internal Transactions •Pick list
•Shipped Orders •Checks to vendors
•Purchase Orders Databases •Receiving notices
•Employee Time Cards •Paychecks

External Transactions Operational Reports

•Customer Orders Database Update •Finished goods status
•Vender Invoices •Customer orders •Raw Materials
•Customer payments •Inventory •Inventory status
•Purchase Orders •Packing materials
•Suppliers •Spare parts
 Source Data Automation

Source Data Automation

• Capturing data at its source in a form that can be directly entered into the computer. It
does NOT require keyboard input.
Barcode RFID Magnetic Strip Reader
Mark Sense Reader
Time Clock Reader

POS Register POS Register POS Register

 Point-of-Sale Transaction
Processing System
Customer’s
receipt Management Exception
Inventory information report
database system
UPC and
Point-of-sale quantity
UPC transaction
Scanner
Quantity, processing
Date, system Item, quantity,
time date, time, price

UPC Price Purchases

database

Item

8 database
 Data Processing Activities
Common to TPSs

• A transaction processing cycle

 Data collection
 Data editing

 Data correction

 Data manipulation

 Data storage

 Document production

8 Schematic
 Transaction Processing Cycle
Corrected Data
Original Data
Data Collection

Data Editing

Data Correction Data Manipulation

Data Storage

Document
Production
 Integration of TPSs

Applications
software

People
xn=
8 Schematic
8
 Order Processing System
Customer

Invoice

Internet
Product

Mail
EDI
Order Entry Scheduling

Shipment
Execution
Orders

Shipment Planning Routing

Picking List Planned
Shipments
 Order-Processing System
Order Entry System
• Captures data needed to process
the customer’s order.
• Sources of data:
• Telephone
• EDI
• E-mail
• Internet
• Salesperson
Sales Configuration System
• Ensures that products/services ordered will accomplish customer’s
objectives and will work well together.
• Customer orders a five-station network. Does the customer
have all they need?
Continued
 Order-Processing System
Shipment Planning System
• A system that determines which
open orders will be filled and
from which location they will
be shipped.

Shipment Execution System

• A system that coordinates the outflow of all products and goods
from the organization, with the objective of delivering quality
products on time to customers.
• Uses a picking list from Shipment Planning.
Continued
 Order Processing Support Systems -
Shipment Planning

• Shipment planning
 A system that determines which open orders
will be filled and from which location they
will be shipped
 E.g., (from Figure 8.9)
LOC LINK ITEM NUMBER DESCRIPTION ORDERED SHIPPED BO

8 105 10 L1L16028 FASENTING TOOL 3 EACH 3

20 S8276 STAPLE ¾ INCH 15 CASE 15
30 S8279 STAPLE 1 INCH 15 CASE 12 3
40 SHIPPING CHARGE

8
 Order-Processing System
Inventory Control System
• For each item picked during Shipment
Execution, inventory is updated.

Invoicing System
• Customer invoices are generated and sent based on records
received from the Shipment Execution System.

Continued
 Order-Processing System
Customer Interaction System
• Monitors and tracks Customer
each customer’s
interaction with the
company.

Problems,
Request for Other
Sale Ideas,
Proposal contacts
Information

Customer
Market Interaction Sys. R&D
Research
Sales QC Continued
Marketing
 Order-Processing System
Routing System
• Determines the best way to get goods from one location to another.

Scheduling System
• Determines the best time to deliver goods and services.
 Purchasing System
• Inventory control
 Maintains stock of items such as raw materials, packing
materials, spare parts, and supplies
• Purchase order (P.O.) processing
 A system that helps purchasing department complete
transactions quickly and efficiently
• Receiving
 A system that creates a record of expected and actual receipts
 Reconciles purchase orders with what is actually received
• Accounts payable
 A system that increases an organization’s control over
purchasing, improves cash flow
8  increases profitability, and provides more effective
management of current liabilities
 Raw materials
Packing materials
Spare parts
Inventory control
Inventory control
Purchase status report
order
request Purchase order
Employees
processing
Purchase
order
Purchase
order

Material
Receiving Supplier

Receiving Invoice
notice

Accounts Cheque

8 payable
 Accounting System

• Accounting systems
 Consist of…
 Budget
 Accounts receivable

 Accounts payable

 Payroll

 Asset management

8  General ledger
 Financial Systems -
Accounts Receivable

• Accounts receivable
 A system that manages the cash flow of the
company by keeping track of the money
owed the company on charges for goods
sold and services performed

8
8
 Financial Systems –
Accounts Receivable

• Accounts receivable aging report

 Tells managers what bills are overdue,
either customer by customer or in a
summary format

8
 Financial Systems - Payroll

• Payroll…
 Generates payroll checks and stubs, as well
as W-2 statements at the end of the year for
tax purposes

8
 Financial Systems -
Asset Management

• Asset management transaction

processing system
 A system that controls investments in
capital equipment and manages depreciation
for maximum tax benefits

8
Financial Systems - General Ledger

8
 Objectives of TPS

 Process data generated by and about

transactions
 Maintain a high degree of accuracy
 Ensure data and information integrity and
accuracy
 Produce timely documents and reports
 Increase labour efficiency
 Help provide increased and enhanced service
8  Help build and maintain customer loyalty
 Achieve competitive advantage
 TPS Summary

TPS SUMMARY
• A TPS records and processes detailed data necessary to
update records about the business operations of an
organization.
• Types of Systems:
•Order entry
•Inventory control
•Payroll
•Account payable and receivable
•General ledger
•Etc, etc
2. A system that monitors and tracks each
customer’s interaction with a company is
called.
a. Customer satisfaction system.
b. Customer interaction system.
c. Customer tracking system.
d. Customer goodwill system.
e. None of the above.
3. When computers communicate from
different companies so that the output from
one system is processed by another without
human intervention, the system is called:
a. Coupling
b. Electronic Data Interchange
c. EDI
d. b and c
4. Which system below would be more
likely to use batch processing?
a. payroll
b. airline reservations
c. hotel reservations
d. auto rental
e. college course registration
7. In this form of processing, transactions
are accumulated over a period of time and
processed as a single unit.
a. Batch processing
b. On-line transaction processing
c. Real-time processing
d. On-line delayed processing
e. a and d
8. In this form of processing, transactions
are entered into the computer and stored on
a disk or tape and processed at a later time.
a. On-line transaction processing
b. Real-time processing
c. On-line delayed processing
9. In this form of processing, transactions
are entered into the computer and are
immediately processed.
a. On-line transaction processing
b. Real-time processing
c. On-line delayed processing
d. a, b, and c
e. a and b
10. In this type of data input into the
computer, the data are captured at the
source by a device, such as a barcode
reader, and entered directly into the
computer. It is called Source Data
Automation.
a. True
b. False
12. This system is very important for
recording and monitoring the interaction
the customer has with a company.
a. Customer tracking system
b. Customer satisfaction system
c. Customer interaction system
d. Customer goodwill system
13. Examples of a TPS:
a. Order entry
b. Inventory control
c. Payroll
d. Sales at a cash register
e. All of the above