Transaction Processing Systems

Question 1

What is the meaning of Transaction

Answer 1

Transaction: A business event whose relevant attributes need to be recorded internally (in the corporate database) as well as externally (for a customer, a supplier, a business partner, etc.) due to the impact this information will later have on other operations of the organization and its stakeholders.

Question 2

What is the meaning of Processing

Answer 2

Capturing data and storing it in the data base.

Question 3

What is the meaning of System

Answer 3

Planning and designing the above elements so that they work in sync to perform organizational objectives.

Question 4

TPSs are characterized by

Answer 4

o Large amounts of input/output

o Large number of users

o Huge storage requirements

o Low computational complexity

o Fast input / output as well as processing capabilities

o A high degree of concern for potential security-related problems

o A high degree of concern for reliability and fault-tolerance

Question 5

Typical components of a transaction processing system in business

Answer 5

An organization’s TPS typically consists of several interconnected cyclic systems with the output of one system often serving as input to another system. This interdependence serves to highlight the truly systemic nature of a TPS: What happens in one subsystem tends to impact other subsystems. For instance, if incorrect sales data are sent to billing and shipping, those functions are tater haunted by returned goods and irate customers.

Question 6

Typical components of a transaction processing system in business

Answer 6

Question 7

What is Control Data vs Transaction Data

Answer 7

• Control Data: Managerial relevance: data used for reporting/monitoring/improving the operations
• Transaction Data: Operational relevance: data used for running the operations

Question 8

The why/what/how of treating queries as transaction

Answer 8

Accessing a database to perform a query or produce a report does not ordinarily constitute a transaction because it does not involve an update to the database. However, a query is considered a transaction if the query itself is meant to be tracked. For instance, when a customer inquires into the availability of an item, this would ordinarily count as a read/access operation. However, management may at some point realize that the inquiries themselves are a way of tracking demand. At that point, each inquiry would be tracked in terms of the items requested and their availability. A high level of unavailability of an item would signal management to order or produce a higher level of it.

Question 9

The relationship between the transaction processing and the management reporting systems of an organization

Answer 9

The data captured and stored by a TPS serve two purposes.

1. To support day-to-day, routine operations by being made accessible to those parts of the organization (as well as to external entities) where they are needed.
2. To feed the management reporting system and produce performance reports about the effectiveness and efficiency of the operations. Regardless of which purpose is served, a TPS stores the data it captures in a database for later use. As such, the database is a buffer
   - Between the TPS and the management reporting system
   - Between the TPS at one time and the TPS at a later time

Question 10

The strategic significance of TPS (Pg 487-488 of “Transaction Processing Systems”)

Answer 10

• The significance of TPS is its direct correlation with customer satisfaction.
• Customer satisfaction in a business can be broken down into two parts
  1) Satisfaction of the product or service acquired
  2) Satisfaction w/the process involved in acquiring the product/service
• The PROCESS involved in the customer(s) acquiring the good or service is a function of the efficiency and effectiveness of that company’s TPS, run by the lower levels of the organization
• which can we don’t always associate with the same importance as higher level positions or functions in the hierarchy of an organization…meaning the focus is on the wrong areas most of the time…the HIGHER the value offered to the customer through the TPS, the more customers you will have and the more loyal they’ll be.

Question 11

The ripple effect of transaction processing (Pg 483 of “Transaction Processing Systems”)

Answer 11

• Transactions within TPS capture relevant attributes of an event for later use by other units in the organization or by external entities…the RIPPLE EFFECT is where transaction data travel to all parts of the organization where needed.

Example: If a customer returns a defective product, news of the event needs to travel to different departments such as production, R&D, purchasing…etc. “