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Chapter 17

Database Design Using the REA Data Model

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Learning Objectives

Discuss the steps for designing and implementing a database system.

Use the REA data model to design an AIS database.

Draw an REA diagram of an AIS database.

Read an REA diagram and explain what it reveals about the business activities and policies of the organization being modeled.

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+Database Design Process

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+The System Analysis Process

Systems analysis initial planning to determine the need for and feasibility of developing a new system.

judgments about the proposal’s technological and economic feasibility. identify user information needs define the scope of the proposed new system gather information about the expected number of users and transaction volumes to make

preliminary decisions about hardware and software requirements.

Conceptual design developing the different schemas for the new system at the conceptual, external, and internal levels.

Physical design translating the internal- level schema into the actual database structures that will be implemented in

the new system new applications are developed

Implementation and Conversion Includes all the activities associated with transferring data from existing systems to the new

database AIS testing the new system training employees

Maintaining the new system.

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+Data Modeling

Process of defining an Information System so it represents an organizations requirements.

Occurs at two stages of the Design Process: System Analysis Conceptual Design

Data Models: Data Flow Diagrams (Chapter 3) Flow Charts (Chapter 3) Entity-Relationship Diagrams (Chapter 17)

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+Entity Relationship Diagrams

Used to graphically represent a database schema

Depicts Entities Anything an Organization wants to collect information

about

Relationships between Entities

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E-R Diagram Variations17-

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+Resources-Events-Agents Diagram

Developed for designing AIS Categorizing Entities into:

Resources Organization Acquires and Uses (Give/Get) Things that have economic value

Events Business Activities Management wants to Manage and Control Typically the Activates that comprise an Business Cycle

Agents People and Organizations that participate in Events

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Basic REA Diagram17-

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Inventory

Cash

Resources

Sales

ReceiveCash

Events

Customer

Employee

Employee

Agents

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+REA Diagram Rules1. Each event is linked to at least one resource that it affects.

Get Events Increase the Quantity of a Resource

Give Events Decrease the Quantity of a Resource

Commitment Events No Change in the Quantity of a Resource Usually Change occurs in the future

Sales Order, Purchase Order

2. Each event is linked to at least one other event. Give-Get Commitment

Show cause-effect relationships E.g. Order leads to Sales

3. Each event is linked to at least two participating agents. External Party Involvement

One Internal (Employee) One External (Outside Party, Customer Vendor)

Internal Party Involvement One Internal (Transfers responsibility over resource) One External (Assumes responsibility over resource)

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Basic REA Diagram17-11

Inventory

Cash

Resources

Sales

ReceiveCash

Events

Customer

Employee

Employee

Agents

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Business Cycle Give-Get Relationships

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+Developing an REA Diagram

1. Identify the events about which management wants to collect information.

2. Identify the resources affected by each event and the agents who participate in those events.

What economic resource is reduced by the “Give” event? What economic resource is acquired by the “Get” event? What economic resource is affected by a commitment

event?

3. Determine the cardinalities of each relationship.

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+Revenue Cycle Activities

1. Sales order entry Commitment

2. Shipping/Fill Order Give

3. Billing Information

Processing

4. Cash collections Get

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+REA Diagram Guidelines

Resources on the Left

Agents on the Right

Events in the Middle Event Order should correspond to Timing of Event from Top-

to-Bottom

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Revenue Cycle REA Diagram17-11

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+Cardinalities

Describe the nature of relationships between entities how many instances of one entity can be linked to each specific

instance of another entity Minimum can be: 0 or 1 Maximum can be: 1 or Many

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Read Inner to Outer

Inner = Minimum

Outer = Maximum

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+Three Types of Relationships

Relationship type is based on Maximum Cardinality: One-to-One:

One-to-Many:

Many-to-Many:

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Read Inner to Outer

Inner = Minimum

Outer = Maximum

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+Cardinalities = Business Policy

Each Sale is related to one Cash Receipt No installment Payments

Each Cash Receipt is related to only one Sale Customers must pay for each unique sale Separately

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Cardinalities = Business Policy

Each Sale may be related to one or more Cash Receipts Installment Payments are

allowed

Each Cash Receipt is related to only one Sale Customers must pay for

each unique sale Separately

Each Sale is related to only one Cash Receipts No Installment Payments

Each Cash Receipt is related to one or more Sales Ability to pay for multiple

Sales with one Payment (e.g. after receiving a monthly invoice)

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SalesReceive

Cash

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+Cardinalities = Business Policy

Each Sale may be related to one or more Cash Receipts Installment Payments are allowed

Each Cash Receipt is related to one or more Sales Customers may pay for multiple sales with one payement

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One-to-One Cardinality17-22

Customer Sales

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One-to-Many Cardinality17-23

Customer Sales

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Many-to-Many Cardinality17-24

Customer Sales

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Revenue Cycle REA Diagram17-11

Agent:Event is 1:N

This allows for an Agent to be related with multiple events (e.g. a Customer can have many Orders/Sales/Payments) Note: the optional minimum cardinality, this denotes that an Agent does NOT have to be related to an Event

Event:Agent is N:1

This means that each event can only be related to one agent (and only one)

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Revenue Cycle REA Diagram17-11

Resource:Event is N:N

The same inventory Item can be linked to multiple sales (non-unique inventory) Note: the optional minimum cardinality, this denotes that an Inventory item does NOT have to be related to an Order/Sale

Event:Resource is N:N

This means that each Order/Sale can can be related to multiple Inventory items, but must be to at least one

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Revenue Cycle REA Diagram17-11

Resource:Event is 1:N

A cash account may be related to multiple Cash Receipts Note: the optional minimum cardinality, this denotes that a Cash Account does NOT have to be related to an Cash Receipt

Event:Resource is N:1

This means that each Cash Receipts must be related to one and only one Cash Account.

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Revenue Cycle REA Diagram17-11

Event:Event is 1:1

The maximum cardinality reflects the policy that an Order can only be for One Sale and each Sale must be from One order -

Event:Event is 0:0

The minimum cardinality reflects the sequence of events. You can have a Sale without an Order and an Order that has been placed but has not resulted in a Sale

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Revenue Cycle REA Diagram17-11

Event:Event is N:N

The maximum cardinality reflects the policy that a Cash Receipt can be for multiple Sales and a Sale may be paid in installments.

Sale:Receive Cash minimum cardinality is optional since a payment may not have been received.

Receive Cash:Sales minimum cardinality is 1 because each Payment must be for a Sale (i.e. no Advanced payments)