Database Design Using the REA Data Model Chapter 17 Database Design Using the REA Data Model Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Database Design Process System Analysis Conceptual Design Physical Design Implementation & Conversion Operation & Maintenance Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

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. Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

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 8/17) Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Entity Relationship Diagrams Used to graphically represent a database schema Depicts Entities Anything an Organization wants to collect information about Relationships between Entities Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

E-R Diagram Variations Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Resources-Events-Agents An AIS E-R 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 Activities that comprise an Business Cycle Agents People and Organizations that participate in Events Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Basic REA Diagram Resources Events Agents Employee Inventory Sales Customer Cash Receive Cash Employee Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

REA Diagram Rules 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 Each event is linked to at least one other event. Give-Get Commitment Show cause-effect relationships E.g. Order leads to Sales 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) Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Basic REA Diagram Resources Events Agents Employee Inventory Sales Customer Cash Receive Cash Employee Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Business Cycle Give-Get Relationships Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Developing an REA Diagram Identify the events about which management wants to collect information. 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? Determine the cardinalities of each relationship. Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle Activities Sales order entry Commitment Shipping/Fill Order Give Billing Information Processing Cash collections Get Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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 Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Why is Billing Event not modeled? Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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 Read Inner to Outer Inner = Minimum Outer = Maximum Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Three Types of Relationships Relationship type is based on Maximum Cardinality: One-to-One: One-to-Many: Many-to-One Many-to-Many: Read Inner to Outer Inner = Minimum Outer = Maximum Cardinalities should be read from left-to-right AND right-to-left Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Cardinalities = Business Policy Each Sale is related to only one Cash Receipt No installment Payments Each Cash Receipt is related to only one Sale Customers must pay for each unique sale Separately Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

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) Sales Receive Cash Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

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 payment Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

One-to-One Cardinality Customer Sales Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

One-to-Many Cardinality Customer Sales Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Many-to-Many Cardinality Customer Sales Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Agent:Event is 0:N (min:max) 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 1:1 This means that each event can only be related to one agent (and only one) Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Resource:Event is 0:m (min:max) 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 1:m This means that each Order/Sale can can be related to multiple Inventory items, but must be related to at least one Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Resource:Event is 0:m (min:max) 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 1:1 This means that each Cash Receipts must be related to one and only one Cash Account. Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Event:Event is 1:1 (max:max) 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 (min:min) 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 Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Revenue Cycle REA Diagram Event:Event is m:m (max:max) 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) Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Let’s Practice Problem 5 Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Expenditure Cycle Activities Ordering materials, supplies, and services Receiving materials, supplies, and services Approving supplier invoices Cash disbursements Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Fred’s Train Shop Develop a data model of Fred’s Train Shop’s expenditure cycle activities related to the acquisition of office equipment and other fixed assets. Fred sometimes orders multiple pieces of equipment. Vendors usually ship the entire order, but sometimes are out of stock of some items. In such cases, they immediately ship to Fred what they have in stock, and then send a second shipment when they obtain the other items. Conversely, several orders placed within a short time period with the same vendor might be filled with one delivery. Assume that Fred makes installment payments for most fixed- asset acquisitions, but occasionally pays for some equipment in full at the time of purchase. Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Identify Events Order Office Equipment Receive Office Equipment Pay for Equipment Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Identify Resources / Give - Get Office Equipment (Get) Cash (Give) Order:Receive Commitment Receive:Pay (Get) Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Identify Agents Internal External Employee Purchasing Clerk Receiving Clerk Cashier External Supplier/Vendor Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

So what do we have so far? REA Diagram Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall

Identify Cardinalities Event:Agent Agent:Event Event:Resource Resource:Event Event:Event (x 2, i.e. both ways) Copyright 2012 © Pearson Education, Inc. publishing as Prentice Hall