E

chapt r
1

ight
“ AIS in the
B usiness World
arnes & Noble
“
T
echnique designed primarily
o help users design and/or
understand the relational
database that underlies the AIS.
 “ Inventory
(0,*)

(1,*)
Take
Customer
order

(1,1)
(1,1)
(0,*)

(1,*)
(1,1)
Employee
(1,1)

(0,*) Collect
(1,*)
RESOURCES EVENTS
Customer
payment (1,1)
AGENTS
Cash
(0,*) Customer
(1,1) (1,1)
Barnes & Noble
REA Modeling
“
Discussion Questions:
dq
1. What are the steps involved in creating
an REA model?
2.How should the cardinalities be
interpreted?
3.What do the cardinalities tell us about
the design of the database?
 “ t
Sys ems
Documen ation

2 purposes

understanding understanding
business the

processes database
 “
Database-focused
= driven
e ent
McCarthy
Objectives: (1982)
1. Compare and contrast view-driven and event-driven
AIS.
2. Use REA modeling to represent an event-driven AIS.
3. Use an REA model to design a relational database
for an event-driven AIS.
“A t
ypes of
ccoun ing

I nformation

S ystems
 “
driv iew
en
- focuses on business functions
Example:
Accounts Receivable 150
Cost of Goods Sold 100
Sales 150
Inventory 100
 “
e
v
dri
ent
en
- focuses on business processes
 “ dri
 traditional
v iew e
en dri v ent
en
 modern
 supports a single way  supports multiple
of viewing data ways of viewing data
 may or may not  mostly supported by
incorporate traditional information
technology technology
“ R A
Mod ling
 “
An Acronym referring to
• OPERATING
EVENTS
• INFORMATION
E
V
E
EVENTS
the, RESOURCES, EVENTS N
and AGENTS in an event- • DECISION/
driven accounting MANAGEMENT T
information system EVENTS S
 “
DEPICTED IN
EVENT TYPE EXAMPLES
REA MODEL?
Operating Buying supplies, issuing
YES
capital stock
Information Querying a database, posting
transactions to the ledger NO

Decision/ Deciding how to allow

Management budgeted funds, choosing
between debt and equity NO
financing
 “
SIX STEPS IN DEVELOPING A REA
MODEL:
2. Review the
1. Understand the business process
organization’s and identify the
environment and strategically
objectives significant
operating events.
 “
SIX STEPS IN DEVELOPING A REA
MODEL:
3. Analyze each
strategically 4. Identify the
significant operating relevant behaviors,
event to identify the characteristics, and
relevant event and attributes of the REA
resources and Model elements
agents.
 “
REA MODEL
ILLUSTRATION
(1,1)
CLIENT

(1,1)

AUTOMOBILE
(0,*)

RENT CAR EMPLOYEE

(0,*) (1,1)
(1,*)
“
SIX STEPS IN DEVELOPING A REA
MODEL:
5. Identify and
document the
direct 6.Validate the REA
relationships Model with
among the business people.
elements of the
REA Model.
“
dinalities
ar
 “
Ask yourself
four(4)
Questions:
 “
1. For each x, what is the minimum number of y
involved?

RENT CAR (x) EMPLOYEE (y)

What is the minimum number of employees involved?

ANSWER: ONE (1)
 “
2. For each x, what is the maximum number of y
involved?

RENT CAR (x) EMPLOYEE (y)

What is the maximum number of employees involved?

ANSWER: ONE (1)
 “
Therefore, For each “rent car” transaction involves
exactly one employee.

RENT CAR (x) EMPLOYEE (y)

(1,1)
 “
3. For each y, what is the minimum number of x
involved?
RENT CAR (x) EMPLOYEE (y)

What is the minimum number of “rent car” transactions an

employee could complete?
ANSWER: Zero (0)
 “
3. For each y, what is the maximum number of x
involved?
RENT CAR (x) EMPLOYEE (y)

What is the maximum number of “rent car” transactions

an employee could complete?
ANSWER: MANY(*)
 “
Therefore, An individual employees can complete
zero to many rental transactions.
( 0,* )
RENT CAR (x) EMPLOYEE (y)
“ Databas
Cr ationE
from an
“  Creating Tables

 Normalization Rules

 Creating Database Tables (Rules)

“ Efficient

Effective

TABLES
“ 1NF No repeating groups

2NF No redundant data

No repeating groups
3NF nor redundant data
“
When the maximum cardinalities between two
elements of an REA model are:

• Include the primary key

One & many from the “one side” in the
table on the “many side”

• Create a separate junction

Many & many table to reflect the
combined relationship
 “
• Automobile Table
Identification number
Make
Model
Year
• Employee Table
Employee ID
Address
Date of birth
Emergency contact

• Client Table • Rent Car Table

Client last name
Client first name
Client date of birth
Street Address
City State
Transaction number
[Automobile ID No.]
[Client first name]
[Client last name]
[Employee ID]
 “
REGISTER FOR CLASS CLASS/ REGISTER
CLASS TABLES
TABLE FOR CLASS TABLE
[Transaction
Class ID number Transaction number
number]
Course prefix Registration date [Class ID number]
Course number [Student ID]

Section number

[Employee ID]
Meeting days
 “
l
critica
th nking
“
1. Understand the organization’s environment and
objectives
Example:
▸ Barnes & Noble is one of many retail
bookstore chains
▸ Barnes & Noble’s e-reader is called Nook
 “
2. Review the business process and identify the
strategically significant operating event.
2 strategically significant operating
events from Barnes & Noble’s
acquisition/payment process:
 Issue Purchase Order
 Pay Vendor Invoice
 “
3. Analyze each strategically significant operating
event to identify the relevant resources and
agents.
Resources Events Agents
Issue Purchase
Inventory Employee
Order
Pay Vendor
Invoice
Cash Vendor
“
4. Identify the relevant behaviors, characteristics,
and attributes of the REA model elements.
a) Inventory: Inventory ID, book title, beginning quantity on hand, cost per unit
of beginning quantity, beginning quantity date.
b) Cash: Account number, account type, bank, beginning balance, beginning
balance date.
c) Issue Purchase Order: Purchase order number, purchase order date, vendor,
employee.
d) Pay vendor invoice: Check number, check date, vendor, employee, bank
account number.
e) Employee: Employee ID, employee job title, employee last name, employee
1st name.
f) Vendor: Vendor ID, vendor name, vendor contact person
 “
5. Identify and document the direct relationships among elements of
the REA model.

Inventory
(1,*) (1,*)
Issue
Purchase
Order
(0,*)

(1,*)
(1,1)
Employee
(1,1)

(1,*)

(1,*)
(1,1)

(1,1)
(0,*) Pay Vendor (1,*)
(1,1)
Cash Invoice Vendor
(0,*)
“
6. Validate the REA model with business people
Inventory Table
Inventory ID
Book title
Vendor Table
Vendor ID
Vendor name
Issue Purchase
Order Table
Purchase order
number
Inventory/ Issue
Purchase order
Table
[Purchase order
Beginning Vendor Contact 1st name number]
quantity on hand Purchase order
Vendor contact last date [Inventory ID]
Cost per unit of name
beginning [Employee ID] Quantity
Vendor street address purchased
inventory [Vendor ID]
Vendor city Cost per unit
Beginning
balance date Vendor state
Vendor Zip Code
Vendor Country
“
Inventory
(1,*) (1,*)
Issue
Purchase
Order
(1,*)
(0,*)

(1,*)
(1,1)
Employee
(1,1)

(1,*)
(1,1)

(1,1)
(0,*) Pay Vendor (1,*)
(1,1)
Cash Invoice Vendor
(0,*)
“
ThE nd