McDonald’s Rea Model

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Figure xxx gives us the information about the REA model for the acquisition process of McDonald’s. To be consistent with the integrated system, resources, events and agents must be included in the REA model.

The resources about the McDonald are inventory and the bank account. The company get the inventory from suppliers and pay suppliers money through their bank account. The Events in the model are the purchase order, purchase cash disbursement and purchase return. The purchase order is a commitment event because in this event purchase order agreements are made with suppliers which result in future economic events, notably the purchase and cash disbursement. The purchase order is used to control the purchasing of products and services from external suppliers. The purchase is an economical increment event because the money must be used up in exchange for raw materials from suppliers. On the other hand, the cash disbursement is an economic decrement event, because cash must be used when the company has collected raw materials for convention process. Each purchase order will lead to no more than one purchase and each purchase has to be related to at least one purchase order. The relationship between these two is called fulfillment. The purchase will collect raw materials, which will be paid through the cash disbursement. In addition, each cash disbursement does not need to be associated with at least one purchase, but can be related to multiple purchases. From the point of purchase, one purchase can be related with a lot of cash disbursements. But one purchase in the database has to be associated with at least one purchase order. Cash disbursements are paid and processed by an account payable clerk. And the money used for acquisition is from the bank account. Therefore, each cash disbursement can only exist from the bank account once and bank account may be associated with more than one cash disbursement. The relationship between bank account and cash disbursement is called stock flow and the relationship between cash disbursement and purchase is called duality. After receiving the supplies, here will also be a few purchase returns happen that will affect the cash inventory. Therefore, purchase return happen with multiple inventory.

Here are two kinds of agents in the REA model which are internal agents and external agents. The external agent is the supplier. The four internal agents are purchase employee, cashier， sales employee and quality inspectors. Here, to simplify the situation, we assume there is only one sales employee, one purchase employee and one quality inspector. Sales employee and purchase employee would certain the number of the purchase order the company needed and set the purchase order. Within this purchase process, purchase employee play the role of buyer and sales employee play the role of seller. And a sales employee or purchase employee can set a lot of purchase orders. But one purchase order can only exist with one sales or purchase employee. The purchase behavior through the agent is called participation. Then the suppliers get the payment after providing the raw materials. Also the payment is through the agent of cashier. One cashier can be related to many cash disbursements but a cash disbursement can only exist with one cashier. The quality inspector is the person who takes charge of checking the purchase returns. One quality inspector can be associated with a lot of purchase returns. The relationship between the agents is called assignment. The purchase employee who help the company buy raw materials can be related to a lot of suppliers and the supplier can be related to multiple purchase employee.

Figure 3. REA Model of Acquisition Process

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Relational Database and Relevant Queries

The database of McDonald’s that we created is focus on the acquisition process of the McDonald’s. There are several steps needed to complete in order to create the database.

The first step is according to the REA model picture drawn before to create tables for each resource, events, and agents, such as inventory, bank account, purchase order, cash disbursement, and suppliers. After created tables for each entity, then relationship of each tables can be created to indicate the relationship between each entities. Then after created tables and relationship, we created 15 queries to verify the practical applicability of the database created and also check various information inquire needs of McDonald’s in the daily operating. In addition, different report such as table report, query report, and relationship report to serve the company’s operating.

In the process of create the database, there are several parts needed to pay attention in order to build an accurate database of acquisition process of McDonald’s. First is accurately identify the primary key of each table and include essential attribute in each table to provide enough information in the database. Second, when building relationship of each table, about many to many relationship, a resolution table is needed as an intermediary to build one to many relationships among this three tables. Meanwhile, for many to one and one to many table, we need post primary key of table of one relationship to the table which has many relationships to build one to many relationships between each table. And the query table are showed below.

Queries

Relevant

How many boxes of beef needed to buy?

By searching quantity of beef needed to buy can help the manager and workers to details of coming inventory purchased to manage inventory. And it is also can help the manager to do the budgeting well.

How many boxes of eggs available to make new products?

Obtaining information of eggs’ quantity can help producer of McDonald’s to know the producing capability of daily operating of McDonald’s

How many boxes of eggs needed to return in the end?

Knowing the return quantity of inventory purchased can help the manager and related employee to knowing the details of items purchased.

How much money that the company has in the Scotiabank?

To search money quantity of the company in the bank can help the manger know the operating capital capacity of the McDonald’s

How much total money needed to pay on the end of February?