Transaction Processing System
Student Name: UJJWAL BALYAN & HARMAN SINGH
Class: BBA 2021-24
Section: A
Subject Faculty: Ms. Swati Mathur
Subject Code: BBA305
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INTRODUCTION
Definition: A Transaction Processing
System (TPS) is a type of information
system that collects, stores, modifies, and
retrieves transaction data from various
business processes within an organization.
Transactions refer to any business activity
or operation, such as sales, purchases, or
inventory updates .
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Features of Transaction Processing System:
1. Data Entry:
Captures and records data generated by business transactions.
2. Processing:
Executes necessary calculations, validations, and other processes on the
data.
3. Database:
Stores transaction data in a structured database for future reference.
4. Concurrency Control:
Manages simultaneous transactions to ensure data consistency.
5. Recovery Control:
Implements mechanisms to recover from system failures or interruptions.
6. User Interface:
Provides a user-friendly interface for data entry and retrieval.
7. Security:
Implements measures to secure sensitive transaction data.
8. Reporting:
Generates reports for management to analyze and monitor business
activities. 3
Importance of Transaction Processing System:
1. Accuracy:
Ensures accurate and reliable processing of business transactions.
2. Efficiency:
Streamlines business processes, reducing manual effort and time.
3. Decision Support:
Provides data for managerial decision-making and strategic
planning.
4. Customer Satisfaction:
Improves service quality by ensuring timely and accurate
transactions.
5. Operational Control:
Facilitates monitoring and control of day-to-day operations.
6. Data Integrity:
Maintains the consistency and reliability of transactional data.
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Advantages of Transaction Processing
System:
1. Efficiency:
Streamlines routine business operations, improving overall
efficiency.
2. Accuracy:
Minimizes errors associated with manual data entry and
processing.
3. Timeliness:
Provides real-time or near-real-time processing of
transactions.
4. Decision Support:
Supports decision-making by providing timely and relevant
data.
5. Automation:
Reduces the need for manual intervention in transactional
processes. 5
• Disadvantages of Transaction Processing System:
1. Limited Flexibility:
TPS may not easily adapt to changes in business processes.
2. Complexity:
Designing and implementing a TPS can be complex and resource-
intensive.
3. Dependency on Technology:
Susceptible to disruptions and issues related to technology failures.
4. Scalability Issues:
Some TPS may face challenges when scaling to accommodate
increased transaction volumes.
5. Security Concerns:
Vulnerabilities in the system may expose transaction data to
security risks.
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Uses of Transaction Processing Systems
1. Retail Industry:
Point of Sale (POS) systems use TPS to handle sales transactions, inventory
updates, and customer data management.
2. Financial Institutions:
Banking systems utilize TPS for handling transactions like deposits,
withdrawals, fund transfers, and updating account balances.
3. Healthcare Sector:
TPS is employed in healthcare for managing patient records, billing,
appointment scheduling, and processing insurance claims.
4. Manufacturing and Supply Chain:
TPS helps in tracking and managing the production process, inventory levels,
order processing, and shipping in manufacturing and supply chain
management.
5. Airline Reservations:
Airlines use TPS to manage flight reservations, ticketing, and passenger
information.
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