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Management Information Systems




                    Notes          Types of Transactions

                                   There are mainly two types of transaction and these are:
                                      Internal transaction
                                      External transaction
                                   Internal Transactions: Those transactions, which are internal to the company and are related
                                   with the internal working of any organization.


                                          Example: Recruitment Policy, Promotion Policy, Production Policy, etc.
                                   External Transactions: Those transactions, which are external to the organization and are related
                                   with the external sources, are regarded as External Transaction. For example sales, purchase, etc.

                                   When a department orders office supplies from the purchasing department, an internal transaction
                                   occurs, when a customer places an order for a product, an external transaction occurs.

                                   Characteristics of Transaction Processing Systems

                                   Various characteristics of TPS are:

                                      A TPS records internal and external transactions for a company. It is a repository of data
                                       that is frequently accessed by other systems.
                                      A TPS performs routine, repetitive tasks. It is mostly used by lower-level managers to
                                       make operational decisions.
                                      Transactions can be recorded in batch mode or online. In batch mode, the files are updated
                                       periodically; in online mode, each transaction is recorded as it occurs.
                                      There are six steps in processing a transaction. They are data entry, data validation, data
                                       processing and revalidation, storage, output generation, and query support.

                                   Features of TPS

                                   Various features of TPS are:

                                      A TPS supports different tasks by imposing a set of rules and guidelines that specify how
                                       to record, process, and store a given transaction. There are many uses of transaction
                                       processing systems in our everyday lives, such as when we make a purchase at retail store,
                                       deposit or withdraw money at a bank, or register for classes at a university. Almost all
                                       organizations, regardless of the industry in which they operate, have a manual or automated
                                       TPS.
                                      A TPS is the data lifeline for a company because it is the source of data for other information
                                       systems, such as MIS and DSS (Decision Support Systems). Hence, if the TPS shuts down,
                                       the consequences can be serious for the organization.

                                      A TPS is also the main link between the organization and external entities, such as customers
                                       suppliers, distributors, and regulatory agencies.
                                      TPS exist for the various functional areas in an organization, such as finance, accounting,
                                       manufacturing, production, human resources, marketing quality control, engineering,
                                       and research and development. Until a few years ago, many companies viewed the TPS for
                                       each business function as separate entity with little or no connection to other systems in
                                       the company. Today, however, many companies are trying to build cross-functional TPS




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