Transaction Processing Systems Flashcards, test questions and answers

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What is Transaction Processing Systems?

Transaction Processing Systems (TPS) are computer systems used to record and process data related to the transactions of an organization. They are designed to carry out a specific set of tasks such as collecting, storing, modifying and retrieving information associated with a transaction. TPSs are responsible for processing large amounts of data quickly and accurately in order to ensure the accuracy of financial records.The main components of a TPS include input devices such as keyboards, scanners, or barcode readers; output devices such as screens or printers; transaction databases; and application software that processes the data according to established rules. The most common types of TPSs include point-of-sale systems, inventory control systems, payroll systems, banking systems, airline reservation systems and online shopping cart applications. Some advantages of using TPS include increased efficiency due to its ability to rapidly process large quantities of data; accuracy in processing transactions due to error checking capabilities; improved customer service due to its ability to provide real-time feedback on orders; cost savings by eliminating manual labor costs associated with traditional processing methods; improved security through encryption techniques used when transmitting sensitive information across networks such as the Internet. TPs also have some disadvantages such as high implementation costs due to expensive hardware needed for installation and maintenance; potential system downtime caused by power outages or software glitches; potential security breaches from unauthorized access if safeguards are not properly implemented; difficulty in customizing the system for specific needs since it is designed for general purpose use only. Overall, Transaction Processing Systems offer many benefits over traditional manual methods for recording and processing business transactions. They provide greater accuracy, speed up transaction timeframes, reduce labor costs associated with manual processes and increase security compared with more traditional approaches. However they do come at a cost in terms of implementation and maintenance fees as well as potential risks associated with unauthorized access if proper security measures aren’t taken. When deciding on whether or not a Transaction Processing System is right for your organization it’s important weigh both these benefits against any drawbacks before making your decision.