REA analysis and E-R diagramming

1. REA analysisand E-R diagramming 4/18/2012

2. What are we hoping to achieve? • Tool for designing a database system to meet the needs of the organization • REA modeling is a method of analyzing and thinking about the system • E-R diagramming is a means of diagramming what the database should look like based upon the analysis above.

3. What are we hoping to achieve? • What we want to do is follow a structured approach for designing databases. • The basic element in a database is called an entity - • What do you think an entity might be relative to an ACCESS database?

4. Some of the usual suspects… • Entities from the DFD/flowchart world(people) • Events • Resources

5. Resource-Event-Agent modeling • REA modeling is a hot topic in systems circles • Some books combine REA and E-R diagramming and some make no distinction

6. Resource-Event-Agentanalysis and modeling • We focus on events, which are things that get recorded in our system • For each event we will possibly have • The event itself • Resources consumed or obtained • Internal agents (entities) • External agents (entities) • The reason that the word entities is in parentheses is that with this type of modeling, all five of these things are referred to as “entities”

7. REA analysis • Think back to the purchase order in the SUA that we looked at a few days ago…

8. Location Event External Agent Resources Internal Agents Who What Where

9. Entity-Relationship diagramming • It uses three symbols • A rectangle • An entity (but not the same as in DFDs and flowcharts • A diamond • A relationship • An oval • An attribute • A specific form of E-R model is called REA (Resource-Event-Agent) modeling

10. Resource-Event-Agent modelingbasic template Resource Internal agent Event Location (if needed) External Agent (if needed) Resource Internal agent These are all considered entities Event Location (if needed) External Agent (if needed)

11. Entity-Resource-Agent modeling • Resource - such as merchandise or cash • Person (what we referred to as entities in DFDs) • Event Entity Relationship • Describes how two entities relate Attribute • Provides specifics for an entity (the column information)

12. Entity-Relationship modeling

13. Entity-Relationship modeling tblCashDisbursementCheck No. tblCashDisbursementInventoryReceipt Inv Rec No. + Chk No Check No. Date tblInventoryReceiptInv Rec No Inv Receipt No. PONo. tblPurchaseOrderPO No. tblPOInventoryReceiptPO No. + Inv Stck No. tblMaterialsInventoryInv. Stck No PONo. VendorNo. Inv Stock No. Inventory data tblVendorVendor No. Vendor data

14. Entity-Relationship modeling tblCashDisbursementCheck No. tblCashDisbursementInventoryReceipt Inv Rec No. + Chk No Check No. Date tblInventoryReceiptInv Rec No Inv Receipt No. PONo. tblPurchaseOrderPO No. tblPOInventoryReceiptPO No. + Inv Stck No. tblMaterialsInventoryInv. Stck No PONo. VendorNo. Inv Stock No. Inventory data tblVendorVendor No. Vendor data

15. Entity-Relationship modeling • Cardinality • Within the context of ER modeling, we can characterize the cardinality of a relationship. • Cardinality has to do with the number of possible outcomes that we are combining together • Designations • 1-1 (one to one) • This is when two tables are related and for every occurrence of the primary key in the first table, there is one and only one occurrence of the foreign key in the second table. Third normal form does not require any 1 - 1 relations • Example:

16. Entity-Relationship modeling Example from last class Notice how each SSN is unique in the first AND the second table. If youknow any of the information in the table, you know it all. There are reasons you might want to design things this way though... Let’s rewrite this ONE table as two separate tables (like we did last class)

17. Entity-Relationship modeling Person ID Plate ID SSN • Designations • 1-1 (one to one)

18. Entity-Relationship modeling • Designations • 1-M (one to many) • This is the most common relationship • The primary key of the first table is unique in the second table • Consider a customer table and an invoice table • Each customer may have MANY invoices • Each invoice relates to ONLY ONE customer tblCustomer CustNo. tblInvoiceInvoiceNo. CustNo. 1 M

19. Entity-Relationship modeling • Designations • M-M (many to many) • This is frequent in accounting contexts. • You have two tables • In each table, there are multiple occurrences of the primary key of the other table • Example is Invoices and Inventory Items • Each invoice may have several items in inventory • Each item in inventory may appear on several invoices • The solution is to create a table that has a COMPOSITE PRIMARY KEY and build TWO relations tblInventory ItemNo tblInvoiceLine ItemNo InvoiceNo tblInvoiceInvoiceNo 1 ItemNo. M M InvoiceNo. 1

21. Entity-Relationship diagrams tblINVOICEInvoiceID tblINVITEMInventoryIDInvoiceID tblINVITEMInventoryIDInvoiceID CustomerID InvoiceID M M 1 M 1 tblCUSTOMERCustomerID tblITEMInventoryID InventoryID 1

22. Entity-Relationship diagrams

24. Entity-Relationship diagrams (1,M) tblEMPLOYEEEMPNUM tblIDTAGTAGNUM PACKID TAGNUM M 1 tblTAGNOTAGNUM tblTAGNOTAGNUM EMPNUM 1 M

25. Entity-Relationship diagrams

26. REA data model • REA is specifically for Accounting Information Systems • 3 types of entities • Resources • Events • Agents • Basic Template

28. Basic Template • This is a slightly more restrictive view than we previously took. • Exchange event is two sided (balance sheet equation) • Commitment events (inquiry events?) LEAD TO exchange events (don’t worry about these) • Every exchange must have an internal and external agent

29. Four steps to developing an REA Diagram • Identify the pair of economic exchange events • Identify resources (balance sheet accounts) and agents • There will always be at least one internal and one external agent for economic exchange events. • Examine whether it should be broken down to include “commitment-type” events • Determine cardinalities of relationships

30. Identify the pair of economic exchange events Example - Revenue Cycle: Give Inventory Get Cash

31. Identify resources and agents • Resources for the sales (revenue) cycle: • Inventory • Cash • Agents for the sales cycle: • Internal - Salesperson/Cashier • External -Customer

32. USING the REA diagram • Create a table for each entity and one for each M:N relationship • You need a table for each M:N relationship to concatenate the primary keys for the two tables • Put the appropriate attributes (columns) in the tables • Implement relationships

33. Example WE-FIX-COMPUTERS operates a repair shop for PCs. This describes their purchase system for parts. They order parts from more than a dozen vendors. Sometimes vendors ship partial orders. We-Fix pays for purchases by the 10th of the next month. It always pays each invoice in full (no installment payments). There is a single purchase manager through which all purchases are made. Let’s consider the Order event and the Purchase event. We will have “place holders” for the Cash Disbursement event, but will not worry about it.

34. Order Invty Vendor Inventory Employee Vendor Receive Invty Employee Vendor Cash Cash Disb Employee

35. Order Invty Vendor Inventory Employee Vendor Receive Invty Employee Vendor Cash Cash Disb Employee

36. 1 M Order Invty PO Vendor 1 Inventory PO M Employee Vendor Receive Invty Here, there is only one employee… the purchase manager… that is called by the purchase order. Employee Vendor Cash Cash Disb Employee

37. 1 M PO- ItemID M Order Invty PO Vendor 1 Inventory M PO M Employee Vendor Receive Invty Here, we have a Many to Many relationship because each item in inventory can appear on several purchase orders and each purchase order has possibly several inventory items. See next slide for solution. Employee Vendor Cash Cash Disb Employee

38. PO- Line Item PO Order Invty PO Vendor 1 1 M M M ItemID 1 1 Inventory PO M Employee Vendor Receive Invty We create a NEW table with a composite primary key to resolve the M-M dilemma. Employee Vendor Cash Cash Disb Employee

39. PO- Line Item PO Order Invty PO Vendor 1 1 M M M ItemID 1 1 1 Inventory PO PO M Employee Vendor M Receive Invty We have a 1-M relation between orders and receipts ONLY because vendors might make partial shipments (so more than one shipment is received for a given PO) Employee Vendor Cash Cash Disb Employee

40. PO- Line Item PO Order Invty PO Vendor 1 1 M M M ItemID 1 1 1 Inventory PO M PO M Employee Vendor M M Receive Invty Again, we have a Many to Many relationship that we must resolve. Employee Vendor Cash Cash Disb Employee

41. PO- Line Item PO Order Invty PO Vendor 1 1 M M M ItemID 1 1 1 Inventory PO PO M Employee 1 ItemID Vendor M Rec. Rept. - Line Item M RR Receive Invty 1 M Employee Again, we create a NEW table with a composite primary key to resolve the M-M dilemma. Vendor Cash Cash Disb Employee

42. PO- Line Item PO Order Invty PO Vendor 1 1 M M M ItemID 1 1 1 Inventory PO PO M Employee 1 ItemID M RR Vendor M 1 Rec. Rept. - Line Item M RR Receive Invty 1 M 1 RR Employee M The internal and external agents are handeled in the same way as the order process, but there is a different employee. Vendor Cash Cash Disb Employee