1. Database Design Using the REA Data Model
Chapter 17
Database Design Using the REA Data Model
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2. 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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3. Database Design Process
System Analysis
Conceptual Design
Physical Design
Implementation & Conversion
Operation & Maintenance
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4. 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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5. 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)
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6. 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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7. E-R Diagram Variations
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8. 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
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9. Basic REA Diagram Resources Events Agents Employee Inventory Sales
Customer
Cash
Receive
Cash
Employee
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10. 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)
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11. Basic REA Diagram Resources Events Agents Employee Inventory Sales
Customer
Cash
Receive
Cash
Employee
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12. Business Cycle Give-Get Relationships
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13. 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.
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14. Revenue Cycle Activities
Sales order entry
Commitment
Shipping/Fill Order
Give
Billing
Information Processing
Cash collections
Get
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15. 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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16. Revenue Cycle REA Diagram
Why is Billing Event
not modeled?
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17. 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
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18. 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
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19. 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
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20. 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
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21. 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
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22. One-to-One Cardinality
Customer
Sales
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23. One-to-Many Cardinality
Customer
Sales
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24. Many-to-Many Cardinality
Customer
Sales
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25. 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)
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26. 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
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27. 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.
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28. 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
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29. 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)
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30. Let’s Practice Problem 5
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31. Expenditure Cycle Activities
Ordering materials, supplies, and services
Receiving materials, supplies, and services
Approving supplier invoices
Cash disbursements
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32. 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.
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33. Identify Events Order Office Equipment Receive Office Equipment
Pay for Equipment
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34. Identify Resources / Give - Get
Office Equipment (Get)
Cash (Give)
Order:Receive
Commitment
Receive:Pay (Get)
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35. Identify Agents Internal External Employee Purchasing Clerk
Receiving Clerk
Cashier
External
Supplier/Vendor
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36. So what do we have so far? REA Diagram
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37. Identify Cardinalities
Event:Agent
Agent:Event
Event:Resource
Resource:Event
Event:Event (x 2, i.e. both ways)
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