Transaction Processing System Overview

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Questions and Answers

What is one consequence of data breaches for businesses using Transaction Processing Systems (TPS)?

Improved system efficiency

Financial losses (correct)

Increased customer trust

Reduced operational costs

How can businesses significantly reduce the risks associated with Transaction Processing Systems?

By avoiding the use of technology

By limiting transaction volumes

By investing solely in marketing

By implementing robust security measures (correct)

What is a key factor that can help avoid high costs associated with TPS?

Choosing an inflexible system

Opting for cloud-based or subscription services (correct)

Conducting fewer audits

Minimizing security measures

Which example best illustrates a Transaction Processing System in action?

A cash register in a supermarket Signup and view all the answers

What is a negative impact of implementing and maintaining a TPS?

Limitations on investment in other areas Signup and view all the answers

What is the primary purpose of a Transaction Processing System (TPS)?

To manage the collection and retrieval of customer and business data during a transaction. Signup and view all the answers

Which of the following is NOT a function of a Transaction Processing System?

Custom development of marketing strategies. Signup and view all the answers

What differentiates batch processing from real-time processing in TPS?

Batch processing collects transactions over time for scheduled processing. Signup and view all the answers

Which component of a Transaction Processing System handles the interpretation of entered requests?

Processing unit. Signup and view all the answers

In the context of TPS, what does 'system runtime functions' primarily focus on?

Ensuring data integrity, availability, and security during transaction processing. Signup and view all the answers

Which scenario best illustrates the use of real-time processing in a Transaction Processing System?

Processing credit card transactions at a retail checkout. Signup and view all the answers

Which of the following statements about system administration functions in TPS is true?

They handle the configuration, monitoring, and management of the TPS. Signup and view all the answers

What feature do modern Transaction Processing Systems typically offer?

Customization features to suit specific business applications. Signup and view all the answers

What types of input data are typically processed by a Transaction Processing System (TPS)?

Invoices Signup and view all the answers

Which of the following is NOT a benefit of using a Transaction Processing System?

Enhance product designs Signup and view all the answers

How does a TPS enhance cost efficiency for a business?

By conducting thousands of transactions with a single system Signup and view all the answers

What challenge can arise from system overload in a TPS?

Delays in processing transactions Signup and view all the answers

What role does automation play in a Transaction Processing System?

It streamlines internal resource and revenue management Signup and view all the answers

What is one of the primary advantages of a reliable Transaction Processing System?

Quick and accurate transaction processing Signup and view all the answers

Which of the following correctly describes the output of a Transaction Processing System?

Results representing the outcome of transactions Signup and view all the answers

How can real-time processing in a Transaction Processing System benefit a business?

Minimizes customer wait times during transactions Signup and view all the answers

Study Notes

Transaction Processing System (TPS)

A type of software used for managing data during business transactions.
Facilitates the collection and retrieval of customer and business data.

Functions of Transaction Processing Systems

System Runtime Functions: Ensures fast transaction processing while maintaining data integrity, availability, and security.
System Administration Functions: Involves configuration, monitoring, and management of the system.
Application Development Functions: Offers customization options for data access, inter-computer communication, and user interface design.

Types of Transaction Processing Systems

Batch Processing: Collects transactions over a period and processes them at scheduled intervals.
Real-time Processing: Provides immediate responses, useful for point of sale (POS) transactions, online purchases, and reservations.

Components of Transaction Information System

Input: Original requests are entered to initiate transactions (e.g., bills, coupons, custom orders).
Processing System: Interprets input data and executes actions based on transaction types.
Storage: Centralized database for managing information on customers, products, employees, and financial transactions.
Output: Represents the outcome of transactions processed by the system.

Benefits of Transaction Information Systems

Increased Transaction Speeds: Reduces customer wait times; systems can process transactions in real-time or batch.
Improved Cost Efficiency: Capable of processing thousands of transactions daily, reducing operational costs.
Enhanced Reliability: Ensures swift and accurate transaction processing, reducing troubleshooting costs.
Automated Management: Automation improves internal resource management, allowing employees to focus on complex tasks.

Drawbacks of Transaction Processing Systems

System Overload: Overwhelming transactions can slow processing and affect customer satisfaction.
Data Breaches: Vulnerability to cyberattacks, leading to financial losses and legal issues.
High Costs: Significant expenses associated with implementation and maintenance can hinder investment in other business areas.

Mitigation Strategies for Drawbacks

Select a flexible and scalable system from the outset.
Implement robust security measures (e.g., encryption, firewalls, security audits) to reduce risks.
Consider cloud-based or subscription services to decrease upfront costs.

Examples of Transaction Processing Systems

Point of Sale (POS) System: Used in retail for sales transactions, payment processing, and inventory management.
Automated Teller Machine (ATM): Processes financial transactions like withdrawals and deposits.
Online Booking System: Facilitates reservation processing for airlines, hotels, and transport services.

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Description

This quiz focuses on understanding the concept of Transaction Processing Systems (TPS) and their applications in business settings. Explore the key functionalities and importance of TPS in managing data efficiently within organizations.