Premium Essay

Traditional Information Systems

In: Business and Management

Submitted By mijhumka
Words 1011
Pages 5
Traditional Information Systems
Transaction processing system (TPS)
Transaction processing was one of the first business processes to be computerized, thereby producing a system known as the TPS. The TPS serves as a foundation for the other information systems that may be present in an organisation (discussed later.) TPSs perform routine operations or transactions; e.g. customer orders, purchase orders, receipts, etc. The amount of support for decision making that TPSs directly provide managers and workers is low. These systems require a large amount of input data and produce a large amount of output without requiring sophisticated or complex processing. The TPS may be based on the functional structure of the organisation and may comprise, for example, order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc. The input data are the basic business transactions mentioned earlier (e.g. customer orders, purchase orders, receipts, time cards, invoices, and payroll checks.
The two basic types of TPSs based on the processing type are batch processing system whereby business transactions are kept over a period of time and prepared for processing as a single unit or batch. The essential characteristic of a batch processing system is that there is some time lag between the moment the transaction occurs and the time it is processed and the organisation’s record updated.
Available computer technology now also allows the transaction to be processed on-line in real time (OLTP, on-line transaction processing). Each transaction is processed immediately, and the system immediately updates the records affected by that single transaction.
The principal purpose of TSSs is to answer routine questions and to track the flow of transactions through the organisation.
TSSs are routinely…...

Similar Documents

Premium Essay


...Eunice Eng Yoke Fang PBS1311031 Case Study (Galvaset) Company Background: Information Provided: Direct Labour Rate = $ 20 per hour Expected Production Level = 50 000 units Labor Hours Required = 200 000 hours Activity (Cost Driver) | Budgeted Costs for 2010 | Cost Driver Used as Allocation Based | Cost Allocation Rate | Material Handling | $ 325 000 | Number of parts used | $ 0.25 per part | Cutting & Lathe Work | $ 2 340 000 | Number of parts used | $ 1.80 per part | Assembly & Inspection | $ 5 000 000 | Direct labor hours | $ 25.00 per hour | Units Produced | Direct Materials Costs | Number of Parts Used | Direct Labor Hours | 3 800 | $ 142 000 | 83 600 | 17 180 | Question a: ABC Costing Activity | Total Time | Cost-Driver Rate | Total Cost | Material Handling | 83 600 | $ 0.25 | $ 20 900 | Cutting & Lathe Work | 83 600 | $ 1.80 | $ 150 480 | Assembly & Inspection | 17 180 | $ 25.00 | $ 429 500 | Total | | | $ 600 880 | Direct Labor Cost = $ 20 x 17 180 hours = $ 343 600 Direct Material Cost = $ 142 000 Total Manufacturing Cost = $ 600 880 + $ 343 600 + $ 142 000 = $ 1 086 480 Cost per unit = $ 1 086 480 3800 units = $ 285.92 per unit Question b: Traditional Costing Predetermined Overhead Application Rate: Predetermined Overhead (Labor per unit) = $ 325 000 + $ 2 340 000 + $ 5 000 000 200 000 hours = $ 38.325 per hour Total Overhead...

Words: 1235 - Pages: 5

Premium Essay

Abc System

...Costing (ABC) over other costing systems. Also identify at least one company that uses ABC and describe how it benefits the company. Introduction This paper has been formulated in order to determine the basic nature of Activity Based Costing, its advantages and disadvantages. These points are further elucidated by a case study of a Taiwanese hot spring country inn’s implementation of the ABC system. What is Activity Based Costing The Activity-Based Costing theory started in 1987 by Robert S. Kaplan and W. Bruns as a better alternative to the traditional costing method. It has activities as the fundamental cost objects and assumes that activities cause costs and that cost objects create demands for the activities. A traditional costing system uses a single, volume based cost driver. In most cases the traditional system assigned the overhead cost to products on the basis of their usage of direct labor. For this reason traditional cost systems often yields inaccurate product costs and becomes inadequate in terms of calculating true cost to produce specific products for specific customers. ABC system was developed to overcome the shortcomings of the traditional method by using many cost drivers to allocate a indirect costs instead of just using one cost driver such as machine hours. ABC system uses a different approach and allows improvement on the control of overheads by cost/cause relationships that are activity and cost. This flexible system is able to relate costs to......

Words: 946 - Pages: 4

Premium Essay


...not included in the national accounting system, such as the gross domestic product (GDP). Although different in view of how the green accounting, and the technology is used worldwide. Green accounting has many purposes. First, the aim is to use an isolated and elaborate on each of the environmental flow and also to the traditional securities account. By doing so, it can provide an estimate of the total expenditures for the protection of the environment, and the gross domestic product can counter with defensive expenditures. The second purpose is the connection between the physical resource accounts and the financial environment. This will cover equity and natural resources, including those of the economic system. The green accounting to increase capital concept, the system environment, economic (SEEA). This will help to improve maintenance of natural capital and human capital. Green accounting is typically use the traditional financial accounting system. Traditional financial accounting system can be defined as Collection of information in a company such as government officials or some charitable organizations. In fact, this will help the publicity for the community about the prospects and health of the Company. In addition, the information is actually very important, traditional financial accounting system. They have the information, and more can be in specific matters or it can be in the general matters of the Company. The information gathered can be used for impromptu......

Words: 1989 - Pages: 8

Premium Essay


...accounting section, it helps make it easy and interesting to the individual. Indeed computerized accounting has a great impart in the accounting system. But to say that two or three weeks of training in computer program in accounting is the best way in accounting system, for that I disagree with it. Yes the computerized accounting has help in many ways but it does not supersede the manual or the tradition way of accounting. The manual or traditional way of accounting is the process of recording transaction on the paper or in a document in a raw fact. The combination of the two which is the manual and computerized accounting system is the best way of accounting but specializing in the computerized system is not the best way. There are functions that that can be concerned as in effective way of accounting. * COST One of the bigger advantages in the manual accounting is the cost saving compare to computerized accounting. Computerized accounting software is expensive according to accounting. The paper ledger as the traditional way of accounting is money saving and even save the expense of having a bookkeeper when the work is done by yourself. * TIME Time is an essential or an important factor in accounting system. This is because every organization wants their financial account preparation on time. Concerning timing in manual or traditional way of accounting is a disadvantage because it takes time in recording, implementing, calculating and analyzing in preparation......

Words: 951 - Pages: 4

Premium Essay

Time Driven Abc

...Time Driven ABC costing is more superior to the traditional method in many different ways. Overall there are many negatives to the traditional system including its higher cost, low accuracy and is an extremely complicated system. The time driven ABC costing has many benefits including its lower cost, ease of implementation, higher accuracy and the larger scope of its models. Traditional ABC costing has been used for a very long time but with the introduction of modern computers it allows for Time driven to be a much more effective cost system. The traditional cost system is quite expensive and time consuming because it requires a lot of people to maintain and gather the necessary information to try to create an accurate cost system. Due to the time consuming nature of the system it is infrequently updated and leads to inaccurate cost estimates. Also when information was gathered from employees many employees did not consider the time spent in a nonproductive fashion. So many cost drivers were created under the notion that employees were working at full capacity. Overall the traditional cost system does not even come close to matching the accuracy of Time Driven ABC costing. Time Driven ABC costing is superior to traditional costing mostly because of its increased accuracy. It is much easier to implement because the only factors that it requires is the cost rate of supplying resource capacity and the consumption of the resource capacity by the products or services. Time......

Words: 418 - Pages: 2

Premium Essay

Research Report

...what is traditional financial system? Traditional financial systems mean financial systems are used in companies before. Risks of traditional financial systems 1. Delays – The CEO needs the latest consolidated financials. The best finance can do is offer reports that are already weeks old – or reports based on today’s numbers that will be available next week. 2. Security Risks – Security is compromised when someone accidentally emails confidential reports to a vendor instead of the board of directors. 3. Errors – To create reports, the finance staff has to download data from one or more financial systems and aggregate, manipulate, and format the data in a spreadsheet – providing ample opportunity for errors and reducing finance productivity. 4. Increased Software Costs – The controller gets a $100,000 invoice for add-on data warehousing and reporting software – plus an HR request for $100,000/year for IT staff to manage them. Traditional Financial Systems vs. the Cloud The business world today is highly competitive, collaborative, and distributed. In order to gain a sustainable advantage, every stakeholder must make intelligent decisions based on real-time information. Companies rely on their financial systems to provide them with real-time, actionable, and relevant data that will help them build, plan, define, measure, and drive performance. Moving to a cloud-based financial system like Intact can help companies achieve the real-time visibility they need,......

Words: 336 - Pages: 2

Premium Essay

Activity Based Costing

...using the same traditional costing systems, Cooper and Kaplan (1991).The absorption costing paved way due to the lack of visibility for indirect costs so the ABC has been adopted by many organizations rapidly. According to Krajnc et al. (2011), the main difference of ABC to absorption costing lies on how they treat indirect production costs (overheads) and sales. The fundamental goal of ABC is to identify as much as possible direct relationships between products and resources consumed through activities conducted from production to disposal. The ABC system is based on the assumption that the support activities such as activities and sales, the cost of which traditional systems characterized as overheads, offer opportunities for the implementation of activities, and thus are not just for sharing costs. In an absorption costing when the volume of overheads is larger, the likelihood of distortions in reported costs is also greater. In general, overheads that exceed 15 percent of the total cost can cause inaccuracies, Turney (1996). Many companies had major problems by these inaccuracies and so they started using ABC. The traditional approach to cost allocation consists of three steps: Concentration of costs in the productive and non - productive parts. Allocation of the cost of non-productive segments in section production. Distribution of the resulting costs of production in the department products, services and customers. The costs resulting from the traditional......

Words: 1869 - Pages: 8

Premium Essay

Activity Based Costing: Abc/Abm Implementation

...Abstract There are two main cost allocation systems exist. Traditional cost allocation system allocates costs based on volume of production or proportionally to sales revenue. Such approach usually underestimates costs for low-volume products or services and over-estimates costs of high-volume products or services. To avoid such situations Activity Based Costing (ABC) system was developed. ABC system main principle is to identify main activities of the company, group costs of these activities, identify how these activities can be measured and assign costs to products or services though these measures. ABC system helps managers to allocate costs more accurate to final products or services. However, ABC system has some limitations. For ABC implementation company needs a lot of resources (trained personnel, additional IT and information resources). Some of the potential users are often change their mind of ABC implementation after expenses for system implementation and maintenance are calculated. Other disadvantage is the complexity of the system. Implementation of ABC system could be highly complex if company has a lot of products and need to allocate its costs to a number of activities. Support and maintenance of such systems is complicated and time consuming process. ABC system gathers and provides valuable information for decision making. This approach is called Activity Based Management and could be used to improve efficiency of the company. Notwithstanding its......

Words: 3673 - Pages: 15

Premium Essay

Pto Polcies

...with two different PTO policies is a difficult task as ultimately; there must be one newly created policy for all employees to follow. In addition, HR will need to further research each company for information to determine the newly formed paid time off policy once the companies have merged. Length of Employment * Usually it is important to know how long an employee has been with the company. Paid time off is accumulated over time and the length of an employee at a company can really alter their paid time off. This information is important to make sure paid time off is given fairly but also to protect the company from people who join the company just to receive paid time off. Attendance * Employees work different hours throughout the day, week, month and year. Some employees are required to work 40 hours a week; some are required to work more or less. This information is needed to help define the paid time off policy and help narrow down the qualifications Employee type * In most companies there are full time employees whom are entitled to all benefits and incentives. There are also outsourced and contractor employees within a company. The different types of employees do not share the same benefits and this is why this information is important to HR. This information also expands to job title, rank and longevity in the company. Some employees work for company longer for other and may have accumulated more paid time over time, where as some employees may......

Words: 1699 - Pages: 7

Free Essay

Logical Modeling in Systems Analysis

...Logical Modeling in Systems Analysis Table of Contents Topic Page Chapter One Abstract . . . . . . . . . . . . . . . . . . . 3 Chapter Two Introduction . . . . . . . . . . . . . . . . . . 4 Information Systems . . . . . . . . . . . . . . . 5 IS Analysis Phase . . . . . . . . . . . . . . . . 5 Modeling Definition and Concepts. . . . . . . . . 5 Traditional Approach Logical Models . . . . . . . . 7 Object Oriented Approach Logical Models . . . . . . 9 Chapter Three Current Topics in Data Modeling . . . . . . . . . . . 12 Bibliography . . . . . . . . . . . . . . . . . . 14 CHAPTER ONE Abstract Today’s organizations are utilizing their core competencies while exploiting the core competencies of subcontractors to produce highly differentiated and high quality products at a lower cost. Business process reengineering has played a key role in remaining competitive, enabled through information technology. Existence of the automated information system, developed through Systems Analysis and Design, has become a requirement for survival of today’s companies. Process......

Words: 3155 - Pages: 13

Premium Essay

Emergence of Activity Based Costing

...Emergence of Activity Based Costing The Traditional cost accounting methods were designed around 1870-1920 and in those days industry was labour intensive and there were no machinery. The product variety was small and the overhead costs in companies were generally low compared to today. During the 1980s, it became clear the conventional techniques for recovering overheads were increasingly providing the management with cost information that was inaccurate and misleading. As a result new techniques for overhead recovery were needed. In order to produce a more accurate costing system, cooper and Kaplan in 1987 developed a more refined approach for assigning overhead to products and computing product costs and called this approach Activity Based Costing (ABC). It was first clearly defined as a chapter in their book Accounting and Management: A field study perspective. (Kaplan, Roberts 1987). While mainly used for private businesses, ABC has recently been used in public forums, such as those that measure government efficiency Features of the ABC and Traditional costing system Activity Based Costing can be defined as an accounting methodology that assigns costs to activities based on their use of resources, rather than products or services. This enables resources and other associated costs to be more accurately attributed to the products and the services which they use. It doesn’t change or eliminate any costs; it provides detailed information about how costs are......

Words: 1265 - Pages: 6

Premium Essay

English Ii

...1010637 Assignment 7 English Comp II 7/7/2013 Online Shopping Vs. Traditional Shopping Humans have several different beloved past times such as sports, vacations and entertainment. One of the oldest and most enduring is shopping which encompasses shopping for necessity and shopping for pleasure. Advancements in technology have allowed humanity to purchase items online through the Internet. The purpose of this essay is to compare and contract shopping online to traditional shopping. At the end of the essay you can decide which method is best for you. Traditional and online shopping allow the consumer to view the items; however, not all online websites allow the consumers to get a panoramic view. Visual appeal is one of the important aspects of attracting potential buyers but if they can’t see the item from all sides this may hinder the purchase. Traditional and online shopping provides the consumer with information about the products. In the traditional arena the customer can talk with the sales clerk and get information about the products right in the store. Online the customer has at least three ways to collect information about the product: (1) product description, (2) product reviews and (3) toll free numbers to the customer service line associated with the websites. Traditional shopping and online shopping allow personal interaction; however, the levels are varied. Traditional shopping allows the consumer to build a relationship with the sales clerk...

Words: 1404 - Pages: 6

Free Essay

Challenges in the Use of the Tradtional Forms of Records Management in Construction

... department of building faculty of environmental design | BLDG715:Information technology in construction | Assignment | | ONU MARGARET ENE MSC/ENV-DESIGN/1927/2011-2012 | 4/23/2012 | LECTURER: ENGR. A.D ABDULAZEEZ ABDULLAHI BELLO | Question 1: What are the challenges construction Organizations face in using traditional form of records management? Question 2: What if any software do construction organizations use in processing and managing project records Introduction No government body or business could survive without making records of its activities. No office could operate successfully if it had to rely on memory alone to keep track of every transaction. Without records, all organised administration would quickly come to a halt. Records, and more specifically the information they contain, are one of the vital resources that an organisation needs to conduct its operations effectively. No organisation could continue without funding, personnel and material supplies. Similarly, it could not operate if it did not keep accurate and accessible records ...

Words: 1735 - Pages: 7

Premium Essay

Accounting System Analysis & Design

...BKAS3063 ACCOUNTING SYSTEM ANALYSIS & DESIGN ANSWER FOR TUTORIAL 3 There are several methods that systems analysts use to determine requirements for a proposed system. The requirements gathering techniques can be categorized into traditional, modern, or radical. The traditional requirements gathering techniques are interviews, questionnaires, , and documents analysis. The modern requirements determination techniques include Joint Application Design (JAD), group support systems, prototyping, and CASE tools. Business Process Reengineering (BPR) is a radical method for determining system requirements. Each of these approaches has advantages and disadvantages to system implementation and operation. 1. Briefly describe systems analysis and the major activities that occur during this phase of the systems development life cycle. (4 Marks) Answer: Systems analysis involves determining how the current information system functions and assess what users would like to see in a new system. Requirements determination, requirements structuring, and alternative generation and selection are the three primary systems analysis activities. 2. Describe THREE (3) traditional techniques for collecting information during analysis. When might one be better than another? (6 Marks) Answer: Traditional techniques for collecting requirements include interviewing individuals, interviewing groups, observing users, and document and......

Words: 689 - Pages: 3

Premium Essay

The Use of Traditional Medicine in the Caribbean

...TECHNICAL TERMS Traditional Medicine- Systems of medicine developed before the era of modern medicine, based on cultural beliefs and ancestral practices. Modern Medicine-Medicine as practiced by holders of M.D (medical doctor).Other terms includes: allopathic medicine; western medicine; mainstream medicine; orthodox medicine; regular medicine and biomedicine. Acupuncture- a medical treatment from China that involves putting sharp thin needles into the body at very specific points. Naturopathy- a system of medical treatment that treats illness by natural methods such as exercising and controlling the food you eat. Reflexology- a form of alternative medicine in which the soles of the feet are massaged. Complementary or Alternative Medicine (CAM) -any range of medical therapies that fall beyond the scope of conventional medicine but may be used alongside it in the treatment of disease. Reiki- a Japanese healing technique based on the principle that the therapist can channel energy into the patient by means of touch to activate the natural healing process. Integrative medicine-relationship-based care that combines mainstream and complementary therapies to promote health for the whole person in the context of his or her family and community (The American Academy of Pediatrics, 2008). RESEARCH QUESTIONS 1. What are the motivational factors responsible for the use of Traditional......

Words: 2571 - Pages: 11