Question

(Expenditure Cycle) Create a Rea Data Model

Purchase orders are made with vendors by a purchasing clerk at Upscale, Inc. If all items on the purchase order are not in stock at the vendor, some vendors send partial shipments and then ship the remaining order when items become available. A shipping clerk inspects items upon receipt from the vendor and forwards them to the appropriate department.

Once an invoice from the vendor has been approved for payment, a cash disbursements clerk sends a check to the vendor. Vendors offer credit to Upscale where they can pay the invoice within 30 days of receipt. Some vendors also send monthly statements, where all purchases for a month are paid with one payment.

Using the information provided for Upscale, Inc. prepare an REA Data Model for the Expenditure Cycle, including cardinalities.

Answer 1

REA Data Model for the Expenditure Cycle, including cardinalities for Upscale, Inc.

To create an entity-relationship diagram using the REA model, follow the three basic steps-

1 ldentifyEvents

As explained in the chapter, the first step is to identily all releyant events or tansactions using .$-e basic "give-to-get" exchange. After talking to Fred about how he buys the inventory he needs, Paul.identifies three basic events that occur .

1. Order Inventory.

2. Receiye Inyentory.

3. Pay for Inventory which Paul decides to call "Disburse Cash."

2 ldentify Resources and Agents

Next, identify the resources involved with these events. Paul determines that there are two resources involved with these events:

1, Inventory

2. Cash

Then identify the agents or people needed to make t}lese eyents happen, remembedng that there are usually two agerts for each eyent, one intemal to Fred's store (i.e., an employee) and one extemal to Fred's store (i.e., the supplier). Paul lists the following agents as being involved in the Order Inventory event:

1. Purchasing Clerk

2. Supplier

The follbwing are the agents involved in the Receiye Inventory eyent:

3. Receiving Clerk

4. Supplier

The following are the agents involved in the Disburse Cash event:

5. Supplier

6. Cashier

3 Determine Cardinalities of Relationships

After all events, resources, and agents are identified, the next step is to determine how all of these entities inieract by determiring the cardinalities of all of the relationships between and among rhe entities. The involves tfuee sleps: 1. Speciry cardinalities of eyent-agent relationships.

2- Specify cardinalities of event-resource relationships.

3. Specify cardinalities of eyent--€vent relationsbips.