REA diagrams make things easier, but the question is whether they are worth the time and...

REA diagrams make things easier, but the question is whether they are worth the time and cost. What things might you be able to see using an REA diagram that might not be apparent otherwise?

Expert Solution

The REA diagram may result to below mentioned advantages which might not be apparent otherwise:

1. The REA approach to modeling business processes is beneficial to management in focusing on the main elements of economic events and identify the non value-added activities which can be eliminated from operations. The improvement in the operational efficiency of individual departments is helpful in generating excess capacity that can be redirected to enhance the overall productivity of the firm.

2. The storage of both financial as well as nonfinancial data in a common database decreases the requirement for multiple data collection, storage, and maintenance procedures.

3. The storage of both financial as well as nonfinancial data about the events of business in detailed form allows a wider range of managerial decisions by supporting multiple user views.

4. The REA model allows management with more timely, relevant, and accurate information. This will translate into enhanced customer service, better-quality products, and flexible process of production.

ekkarill92 answered 1 year ago

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