ENTERPRISE INFORMATION SYSTEMS

A PATTERN BASED APPROACH

Chapter 9

The Acquisition/Payment Business Process

McGraw-Hill/Irwin

Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Learning Objectives

1. Identify activities and documents common to acquisition/payment business processes for various enterprises 2. Identify the components of the REA ontology in the acquisition/payment business process 3. Explain how the acquisition/payment business process fits into an enterprises value system 4. Explain how the acquisition/payment business process fits into an enterprises value chain 5. Create a REA business process level model for an enterprises acquisition/payment business process 6. Identify common information needs within the acquisition/payment process 7. Create queries to meet common information needs in the acquisition/payment process

9-2

Acquisition/Payment Process in an Enterprise Value System

9-3

Acquisition/Payment Business Process in Enterprise Value Chains

Partial value chain for a manufacturer

Partial value chain for a distributor

9-4

REA Acquisition/Payment Business Process Level Pattern

9-5

REA Acquisition/Payment Business Process Level Pattern: Operating Assets

9-6

Acquisition/Payment Process Events

Instigation Events in the Expenditures
Are usually internally instigated; triggered by an identified need External instigation is possible, e.g. need may be identified as result of supplier visit Internal agents involved in acquisition cycle instigation events usually are department supervisors (who identify the need and who authorize the eventual expenditure) and purchasing agents (who process the requisitions) External agents involved in acquisition cycle instigation events usually are suppliers Typically there is no need to specifically identify a good or service for purposes of instigation events; information about the type of good or service promoted is usually sufficient

9-7

Purchase/Requisition Event
Purchase Requisition Event
An instigation event that is entirely internal; typically involves a department supervisor identifying a need for a type of good or service and communicating that need to the purchasing department Is usually symbolized by a purchase requisition document or data entry screen that summarizes information about this event (e.g. which department supervisor and which purchasing agent participated, date of request, date by which goods or services are needed, what goods and/or services are needed, any recommended source/supplier, etc.)

9-8

Purchase Requisition

9-9

Relational Tables Encompassing Purchase Requisition event

9-10

Acquisition/Payment Process Events

Mutual Commitment Events in the Acquisition/ Payment Process
Involve the enterprise and an external business partner agreeing to exchange resources at a defined future time Dont always happen at a discrete point in time; often involves a series of activities Internal agents are usually purchasing agents External agents usually are suppliers Typically there is no need to specifically identify a good or service for purposes of mutual commitment events; information about the type of good or service promoted is usually sufficient Ideally enterprises would like to be able to trace mutual commitment events to the instigation events that triggered them
9-11

Purchase Order Event

A mutual commitment event whereby a supplier agrees to provide goods to the enterprise and the enterprise agrees to pay an ascertained price for those goods Is usually symbolized by a purchase order document or data entry screen that summarizes information about this event (e.g. order date, promised delivery date, payment terms, dollar amount, which supplier and purchasing agent participated, what products the enterprise ordered, etc.)

9-12

Rental Order Event

A mutual commitment event whereby a supplier agrees to transfer possession of some goods to the enterprise for a defined time period and bestows on the enterprise the right to use the goods for a prescribed purpose; in exchange the enterprise agrees to pay an ascertained price Is usually symbolized by a rental contract document that summarizes information about this agreement (e.g. contract date, dollar amount, goods to be rented, time period for which each good is to be rented, payment terms, which purchasing agent and suppliers participated, etc.)

9-13

Service Order Event

A mutual commitment event whereby a supplier agrees to perform one or more services for the enterprise during a defined time period for an agreed upon price to be paid by the enterprise Is usually symbolized by a service contract document that summarizes information about this agreement (e.g. contract date, dollar amount, services to be performed by supplier, time period during which services will be performed, payment terms, which purchasing agent and supplier participated, etc.)

9-14

Purchase Order

9-15

Relational Tables Encompassing Purchase Order Event

9-16

Acquisition/Payment Process Events

Economic Increment Events in the Acquisition Cycle
Represent the receipt of goods or services for which the enterprise will give up some other resource (usually cash) Do not always happen at discrete points in time; may involve a series of workflow activities Resources vary for different types of businesses
Inventory (Inventory type may substitute for Inventory), Services (Service Type may substitute for Services), Temporary use of asset (as in a rental)

Internal Agents are typically purchasing agents and receiving clerks External Agents are typically suppliers or vendors

9-17

Purchase (aka Acquisition) Event

Economic increment event in which title (ownership) of one or more products is transferred from a supplier to the enterprise. The transfer may take place in person (e.g., purchase agent goes to Office Depot to buy paper, or supplier hand-delivers goods to enterprise) or via transit (supplier shipped goods to enterprise) Usually symbolized by a receiving report document or data entry screen that summarizes information about the title transfer (e.g. date, dollar amount, product(s) for which title transferred, payment terms, which purchase agent and supplier participated, etc. Supplier invoice information may also be included in recording this event, but should not be used as the exclusive representation of this event (because there is usually a time lag between title transfer and receipt of supplier invoice)

9-18

Rental Acquisition Event

Economic increment event in which possession of goods is transferred to the enterprise by a supplier for an agreed upon length of time for an agreed upon purpose and price Usually occurs over an extended period of time, rather than occurring at a single point in time Is usually symbolized by documents or data entry screens that summarize information about the transfer of possession of goods from the supplier to the enterprise and then the return of goods to the supplier (e.g. dates, times, which products, suppliers, and employees were involved, etc.)

9-19

Service Acquisition Event

Economic increment event in which a supplier performs one or more types of service for the enterprise May occur over a period of time or may be performed at a single point in time Is usually symbolized by a document indicating the receipt of services (or equivalent data entry screens) that summarize the information (e.g. dates, times, types of service performed, the supplier and employee involved, possibly some notes as to the quality of services received, etc.)

9-20

Receiving Report

9-21

Vendor (Supplier) Invoice

9-22

Relational Tables Encompassing Purchase Event

9-23

Acquisition/Payment Process Events

Economic Decrement Events in the Acquisition Cycle
Almost always is a Cash Disbursement event
An economic decrement event whereby the enterprise transfers ownership of cash (or equivalent) to a supplier Is usually symbolized by a check or disbursement voucher document or data entry screen that summarizes the information about the event (e.g date, dollar amount, supplier to whom cash was disbursed, employee who authorized the payment, acquisition or other event to which cash disbursement applied, etc.) Resource is typically cash (a type-level resource usually a listing of cash accounts owned by the enterprise) Internal agents are usually cashiers, accounts payable clerks, or other financing personnel External agents are usually suppliers or vendors

9-24

Disbursement Voucher

9-25

Relational Tables Encompassing Cash Disbursement Event

9-26

Acquisition/Payment Process Events

Economic Increment Reversal Events
Events in which previous economic increment events are reversed or negated Although similar in mechanics, such events are inherently different from economic decrement events
Giving something back that you had hoped would satisfy your needs, even though you will receive back what you gave in exchange, is not the same as giving something up in exchange for something you want more

Resources, Internal Agents, and External Agents are the same as those for economic increment events

9-27

Purchase Return Event

Economic event in which title (ownership) for goods previously transferred from a supplier to the enterprise are transferred back from the enterprise to the supplier Although a resource (or resource type) is decreased as a result, the nature of purchase returns is different from other economic decrement events. The substance of the event is such that the original economic increment event is negated. Thus we label such events as economic increment-reversal events Is usually symbolized by authorized request to return, packing list, and debit memorandum documents or data entry screens that summarize information about the event (e.g. date, what quantities of which products were returned to supplier, dollar amount, etc.)

9-28

Request to Return

9-29

Packing List

9-30

Debit Memorandum

9-31

Relational Tables Encompassing Purchase Return Event

9-32

Acquisition/Payment Process Relationships

Fulfillment relationships
Between Purchase Requisition and Purchase Order events Between Purchase Order and Purchase (or Rental or Service Acquisition) events

Duality relationships
Between Purchase (or Rental or Service Acquisition) and Cash Disbursement (or Disbursement of Bartered Goods/Services) events

Reversal relationships
Between Purchase and Purchase Return events

Participation relationships
Between each event and each internal and external agent
9-33

Acquisition/Payment Process Relationships

Proposition relationships
Between Purchase Requisition event and Inventory (or Inventory Type or Service Type)

Reservation relationships
Between Purchase Order, Rental Contract, or Service Contract and Inventory (or Inventory Type or Service Type) Also between Purchase Order, Rental Contract, or Service Contract and Cash

Stock flow relationships

Between Purchase (or Rental or Service Acquisition) and Inventory (or Inventory Type or Service Type) Between Purchase Return and Inventory (or Inventory Type) Between Cash and Cash Disbursement

9-34

Resource Query Types

Detailed status information at one or more points in time for each resource instance Detailed status information at one or more points in time for only those resource instances meeting specified criteria Summarized status information at one or more points in time for all resource instances Summarized status information at one or more points in time for only those resource instances meeting specified criteria

9-35

Acquisition Cycle Resource Queries

A list of each inventory item or item type normally stocked by an enterprise A list of all inventory items or item types that possess certain characteristics Quantity on hand of an inventory item type as of a specified date Total cost value of inventory on hand as of a specified date A list of all cash accounts owned by enterprise on a specified date Balance in a specific cash account as of a specified date Total balance in all cash accounts as of a specified date A list of general and administrative supply and service types for which the enterprise maintains descriptive data A list of fixed assets owned by an enterprise Book value of a depreciable fixed asset owned by an enterprise on a specified date Average age of an enterprises machinery on a specified date
9-36

Example Resource Tables

Cash CashAccountID Ca123501 Ca351235 Ca351327 Ca789125 Ca987654 AccountType Checking Petty Petty Savings Imprest checking Location DateAccountEstablished 1st Local Bank Thursday, April 01, 2010 Onsite Thursday, April 01, 2010 Cashier Onsite - Desk CEO Thursday, April 15, 2010 drawer Assistant's File 1st Local Bank Thursday, April 22, 2010 Cabinet 1st Local Bank Thursday, April 01, 2010
InventoryType ItemID Description BIS1 Big Stuff HUS1 Huge Stuff LIS1 Little Stuff MIN1 Miniature Stuff TIS1 Tiny Stuff TTP12 Tiara UnitOfMeasur Standard Cost List Price Each e $20.00 $50.00 Each $30.00 $70.00 Box of 6 $36.00 $72.00 Box of 24 $56.00 $110.00 Box of 12 $48.00 $96.00 Each $10.00 $25.00

Operating Assets Asset Description TagID OA1 BuildingOffice/Warehouse OA10 Manager task chair OA11 Task chair OA12 Task chair OA13 Task chair OA14 Task chair OA15 Toshiba tecra notebook OA16 Dell optima desktop OA17 Dell optima desktop OA18 Dell optima desktop OA19 Warehouse shelving OA2 Property OA20 Fax machine OA3 Executive desk OA4 Manager desk OA5 Manager desk OA6 Administrator desk OA7 Administrator desk OA8 Executive desk chair OA9 Manager task chair

Acquisition Acquisition Asset Date Cost Category 4/1/2010 $200,000.00 Buildings 4/10/2010 $350.00 Furniture 4/10/2010 $175.00 Furniture 4/10/2010 $175.00 Furniture 4/10/2010 $175.00 Furniture 4/10/2010 $175.00 Furniture 4/15/2010 $3,000.00 Computers 4/15/2010 $2,000.00 Computers 4/15/2010 $2,000.00 Computers 4/15/2010 $2,000.00 Computers 4/16/2010 $10,000.00 Fixtures 4/1/2010 $300,000.00 Land 4/17/2010 $400.00 Communication sEquipment 4/10/2010 $2,000.00 Furniture 4/10/2010 $1,500.00 Furniture 4/10/2010 $1,500.00 Furniture 4/10/2010 $1,000.00 Furniture 4/10/2010 $1,000.00 Furniture 4/10/2010 $500.00 Furniture 4/10/2010 $350.00 Furniture

Estimated Estimated IRSListed LifeYrs Salvage Property 40 $20,000.00 No 7 $50.00 No 7 $25.00 No 7 $25.00 No 7 $25.00 No 7 $25.00 No 5 $300.00 Yes 5 $200.00 Yes 5 $200.00 Yes 5 $200.00 Yes 40 $0.00 No 0 $0.00 No 3 $0.00 Yes 10 $200.00 No 10 $100.00 No 10 $100.00 No 10 $100.00 No 10 $100.00 No 7 $50.00 No 7 $50.00 No

9-37

Query to list each operating assets owned on a specific date

9-38

Query to list each operating assets owned on a specific date

9-39

Query to identify computers owned on a specified date

9-40

Event Query Types

Detailed information about each event instance
e.g., what happened, when and where did it happen, etc.

Detailed information about each event instance that meets specified criteria
e.g. events of a specified type that occurred during a specified time period or that occurred at a specified location

Summarized information for all instances of an event type for a specified time period
e.g. total of the event instances during a specified time period

Summarized information for only those instances of an event type for a specified time period that meet specified criteria
e.g. average dollar value of the event instances for a specified location during a specified time period

9-41

Acquisition Cycle Event Queries

Total number of purchase orders made during a specified time period Total dollar amount for a specific purchase order, general & administrative service and supplies acquisition, operating asset acquisition, inventory acquisition, cash disbursement, or purchase return Total or average dollar amount of all acquisition/payment events of a specified type for one or more specified time periods Sellers tracking number for an expected purchase event Date a purchase event occurred

9-42

Example Event Tables

Purchase Requisition (Instigation) Event Purch Maximum Budget Date Purch Recommended FK FK FK ReqID Date for this purchase Needed SuperID AgentID SupplierID R17 R18 R19 R20 R21 4/22/2010 $30,000 5/5/2010 5/6/2010 5/15/2010 5/18/2010 5/2/2010 5/23/2010 5/20/2010 5/25/2010 5/26/2010 E5 E5 E5 E5 E5 E12 E12 E12 E12 E12 V7 V14 V7 V7

Purchase Order (Mutual Commitment) Event Purchase OrderDate DateNeeded DollarTotal OrderID PO16 PO17 PO18 PO19 PO20 PO21 4/24/2010 5/5/2010 5/5/2010 5/6/2010 5/6/2010 5/16/2010 5/2/2010 5/8/2010 5/12/2010 5/10/2010 5/24/2010 5/24/2010 $28,450.00

Purchase FK ReqID R17 R18 R18 R19 R19 R20

Purchase FK AgentID E12 E12 E12 E12 E12 E12

Supplier FK ID V7 V14 V90 V14 V7 V14

Purchase (Economic Increment) Event

Receiving ReportID RR18 RR19 RR21 RR22 RR25

Date 4/30/2010 5/8/2010 5/10/2010 5/12/2010 5/12/2010

Dollar Receiving FK Amount ClerkID $28,450.00 E111 $1,100.00 E111 $3,240.00 E111 $2,000.00 E111 $480.00 E111

SupplierID V7 V14 V14 V7 V90

FK

Vendor Invoice# VI4167 821536 821983 VI5213 312353

Invoice Cash DisbID Amount $28,450.00 40 $1,100.00 $3,240.00 $2,000.00 $480.00

FK

Cash Disbursement (Economic Decrement) Event DisbVoucherID VoucherDate DollarAmount 39 5/15/2010 $746.57 40 5/25/2010 $28,450.00 41 5/29/2010 $398.12

CheckNbr 41234 41235 41236

CashAcctID Ca123501 Ca123501 Ca123501

FK

APClerkID E36 E36 E36

FK

PayeeID E23 V7 E41

FK

Purchase Return (Economic Increment Reversal) Event Purchase Dollar Packing Debit Receiving Dept Shipping FK FK FK FK ReturnID Date Amount Slip# Memo# ReportID SupplierID SuperID ClerkID PR3 5/17/2010 $480.00 22 3 RR25 V90 E5 E41

9-43

Query to identify date and dollar amount of Purchase Order #18

Which table(s) do we need?
Purchase Order (Mutual Commitment) Event Purchase OrderDate DateNeeded DollarTotal OrderID PO16 PO17 PO18 PO19 PO20 PO21 4/24/2010 5/5/2010 5/5/2010 5/6/2010 5/6/2010 5/16/2010 5/2/2010 5/8/2010 5/12/2010 5/10/2010 5/24/2010 5/24/2010 $28,450.00 Purchase FK ReqID R17 R18 R18 R19 R19 R20 Purchase FK AgentID E12 E12 E12 E12 E12 E12 Supplier FK ID V7 V14 V90 V14 V7 V14

Which relational algebra operators apply? Project, Select What is SQL statement?
SELECT PurchaseOrderID, OrderDate, DollarTotal FROM PurchaseOrder WHERE PurchaseOrderID=18;

What is Access QBE?

What is the result?

9-44

Agent Queries
Detailed status information at one or more points in time for each agent instance Detailed status information at one or more points in time for only those agent instances meeting specified criteria Summarized status information at one or more points in time for all agent instances Summarized status information at one or more points in time for only those agent instances meeting specified criteria

9-45

Acquisition Cycle Agent Queries

A list of all purchase agents, accounts payable clerks, inventory clerks, or supervisors for an enterprise A list of employees that possess certain characteristics (e.g. all accounts payable clerks who have a specified minimum fidelity bond A list of employees that live in a specified city or state A list of all employee names and telephone numbers for an emergency phone tree

9-46

Example Agent Tables

Shipping Clerk (Internal Agent) ShippingClerkID Name Address Telephone DateOfBirth E41 Amy Milano 8892 Eddy Ave. 555-9557 January 3, 1964 Department Supervisor (Internal Agent) DeptSupervisorID Name Address Telephone DateOfBirth E5 Patrick Wellesley 53125 Fenton Dr. 555-1112 March 4, 1958 Accounts Payable Clerk (Internal Agent) APClerkID Name Address Telephone DateOfBirth E36 Diane Bowersox 9115 Wolfgang Ct. 555-7244 September 15, 1963
Receiving Clerk (Internal Agent) ClerkID Name Address E247 E251 Telephone DateOfBirth April 14, 1945 May 22, 1948

Kenneth Barki 4312 Monticello Dr. 556-4891 Rita Barki 4312 Monticello Dr. 556-4891

Supplier (External Agent) SupplierID Name V7 Joes Favorite Vendor V14 Reliable Rudys V90 Trinas Trinkets

Address 89056 Ransom Hwy. 34125 Michigan Ave. 1612 Myway Rd.

Telephone PerformanceRating 555-7655 Excellent 555-1199 Very Good 555-2424 Very Good

9-47

Identify Suppliers with Performance Rating of Very Good

Which table(s) do we need?
Supplier (External Agent) SupplierID Name V7 Joes Favorite Vendor V14 Reliable Rudys V90 Trinas Trinkets Address 89056 Ransom Hwy. 34125 Michigan Ave. 1612 Myway Rd. Telephone PerformanceRating 555-7655 Excellent 555-1199 Very Good 555-2424 Very Good

Which relational algebra operators apply? Select What is SQL statement?

What is Access QBE?

SELECT * FROM Supplier WHERE PerformanceRating=Very Good;

What is the result?

9-48

Duality Relationship Query Types

Identification as to whether a specified exchange is completed Identification of completed exchanges for a specified time period Identification of incomplete exchanges for a specified time period Calculation of the amount of claims, e.g. prepaid expenses, payables, unearned revenues, or receivables, either in total or for a specified exchange event Calculation of the total or average length of the timing difference(s) between the events involved in one or more exchanges

9-49

Acquisition Cycle Duality Queries

Calculation of the outstanding payable balance for a purchase Calculation of total accounts payable at a point in time Calculation of prepaid expenses at a point in time Aging of accounts payable Calculation of the average number of days it takes to pay vendor invoices

9-50

Example Duality & Reversal Relationship Tables

Purchase (Economic Increment) Event

Receiving ReportID Date RR18 4/30/2010 RR19 5/8/2010 RR21 5/10/2010 RR22 5/12/2010 RR25 5/12/2010

Dollar Amount $28,450.00 $1,100.00 $3,240.00 $2,000.00 $480.00

Receiving Vendor ClerkIDFK SupplierIDFK Invoice# E111 V7 VI4167 E111 V14 821536 E111 V14 821983 E111 V7 VI5213 E111 V90 312353

Invoice Cash Amount DisbIDFK $28,450.00 40 $1,100.00 $3,240.00 $2,000.00 $480.00

Cash Disbursement (Economic Decrement) Event DisbVoucherID VoucherDate DollarAmount CheckNbr CashAcctIDFK APClerkIDFK 39 $746.57 41234 E36 5/15/2010 Ca123501 40 41 5/25/2010 5/29/2010 $28,450.00 41235 $398.12 41236

PayeeIDFK E23 V7 E41

Ca123501 Ca123501

E36 E36

Purchase Return (Economic Increment Reversal) Event Purchase Dollar Packing Debit Receiving Dept Shipping FK FK FK FK ReturnID Date Amount Slip# Memo# ReportID SupplierID SuperID ClerkID PR3 5/17/2010 $480.00 22 3 RR25 V90 E5 E41

9-51

Querying for Accounts Payable

Conceptually
Dollar value of acquisitions of goods and services (except employee labor) not yet paid in full

Practically
Total of acquisitions through balance sheet date minus total of cash disbursements through balance sheet date that applied to acquisitions. Also minus purchase returns/discounts through balance sheet date. MUST include ONLY ending date constraint (balance sheet items reflect cumulative data from beginning of company through balance sheet date). Use acquisition date to determine which acquisitions to include. Use cash disbursement date and duality relationships to determine which cash disbursements to include. Be sure to aggregate cash disbursements that apply to the same purchase before subtracting from purchase amount
Note: Acquisitions Cash disbursements from Vendors is not acceptable as it is theoretically less sound than using the duality relationships

Likely need for outer join and Nz function in Access (for acquisitions with no matching cash disbursements)

9-52

Accounts Payable Query Steps

9-53

Accounts Payable Query Steps

9-54

Accounts Payable Query Steps

9-55

Accounts Payable Query Steps

9-56

Accounts Payable Query Steps with Nz

9-57

Accounts Payable Query Steps with Nz

9-58

Stockflow Relationship Query Types

What resources or resource types were increased or decreased by an economic event? What quantity of a resource or resource type was increased or decreased by an economic event? What dollar value of a resource or resource type was increased or decreased by an economic event? When did an event increase or decrease a specific resource or resource type? Where did an event increase or decrease a specific resource or resource type?

9-59

Acquisition Cycle Stockflow Queries

Which inventory types were increased by a specific purchase event? What quantity of each inventory type was increased by a specific purchase event? Which inventory types were decreased by a purchase return event? What quantity of each inventory type was decreased by a specific purchase return event? What unit cost was charged for an inventory type on a specific purchase event? What unit cost was granted as credit for an inventory type on a specific purchase return event? What was the total dollar value of purchases for a specified time period? (Note: if total purchase dollar amount is stored in the purchase event table, then it is not necessary to use the stockflow relationship to meet this information need) What is the average dollar value of purchases of a specified inventory type for a specified time period?

9-60

Querying for Inventory Weighted Average Unit Cost

Tables to consider
Purchase (Economic Increment) Event

Receiving ReportID Date RR18 4/30/2010 RR19 5/8/2010 RR21 5/10/2010 RR22 5/12/2010 RR25 5/12/2010

Dollar Receiving Vendor FK FK Amount ClerkID SupplierID Invoice# $28,450.00 E111 V7 VI4167 $1,100.00 E111 V14 821536 $3,240.00 E111 V14 821983 $2,000.00 E111 V7 VI5213 $480.00 E111 V90 312353

Invoice Cash FK Amount DisbID $28,450.00 40 $1,100.00 $3,240.00 $2,000.00 $480.00

Stockflow1 Relationship (Purchase Inventory Type) PurchaseID ItemID PurchaseQuantity ActualUnitCost

RR18 RR18 RR18 RR18 RR19 RR21 RR22 RR25

BIS1 LIS1 HUS1 TIS1 MIN1 MIN1 BIS1 TTP12

100 200 150 300 20 60 100 48

$20.00 $35.50 $29.00 $50.00 $55.00 $54.00 $20.00 $10.00

InventoryType ItemID Description BIS1 Big Stuff HUS1 Huge Stuff LIS1 Little Stuff MIN1 Miniature Stuff TIS1 Tiny Stuff TTP12 Tiara

UnitOfMeasur Standard Cost List Price Each e $20.00 $50.00 Each $30.00 $70.00 Box of 6 $36.00 $72.00 Box of 24 $56.00 $110.00 Box of 12 $48.00 $96.00 Each $10.00 $25.00

9-61

Querying for Inventory Weighted Average Unit Cost

9-62

Querying for Inventory Weighted Average Unit Cost

9-63

Querying for Inventory Weighted Average Unit Cost

9-64

Fulfillment Relationship Query Types

Identification of unfulfilled commitments or instigation events Identification of fulfilled commitments or instigation events Identification of commitment events that were not preceded by instigation events, or identification of economic events that were not preceded by commitment events Calculation of length of time between instigation and commitment events or between commitment and economic events Identification of causes of commitments and/or of economic events Identification of results of instigations and/or of commitment events
9-65

Acquisition Cycle Fulfillment Queries

Identification of unfilled purchase orders Identification of filled purchase requisitions (i.e., those purchase requisitions that resulted in purchase orders) Calculation of average number of days the enterprise takes to fill purchase requisitions for a given time period Identify the purchase order that corresponds to a purchase

9-66

Calculation of Average Number of Days to Fulfill Purchase Requisition

Tables to consider
Purchase Requisition PurchReqID Date MaxBudget DateNeeded SupervisorID R17 4/22/2010 forPurchas $30,000.00 5/2/2010 E5 e R18 5/5/2010 $1,400.00 5/23/2010 E5 R19 5/6/2010 $5,500.00 5/20/2010 E5 R20 5/15/2010 $200.00 5/25/2010 E5 R21 5/18/2010 $7,500.00 5/26/2010 E5 PurchaseAgentID E12 E12 E12 E12 E12 RecommendedSupplier V7 V14 V7 V7

Purchase Order PurchaseOrderID OrderDate DateNeeded DollarTotal PurchaseReqID PO16 4/24/2010 5/2/2010 $28,450.00 R17 PO17 5/5/2010 5/8/2010 $1,100.00 R18 PO18 5/5/2010 5/12/2010 $200.00 R18 PO19 5/6/2010 5/10/2010 $3,240.00 R19 PO20 5/6/2010 5/24/2010 $2,000.00 R19 PO21 5/16/2010 5/24/2010 $220.00 R20

PurchAgentID E12 E12 E12 E12 E12 E12

SupplierID V7 V14 V90 V14 V7 V14

9-67

Calculation of Average Number of Days to Fulfill Purchase Requisition

9-68

Proposition Relationship Query Types

What resources or resource types does the instigation event propose to increase or decrease? What quantity of a resource or resource type is the proposed increase or decrease for an instigation event? When did an instigation event propose to increase or decrease a specific resource or resource type?

9-69

Acquisition Cycle Proposition Queries

Which inventory types were identified as needed in a purchase requisition event? What unit cost was estimated for an inventory type in a specific purchase requisition event? How many different times has a specified inventory type been requisitioned during a time period? How many different types of inventory were requisitioned in a specific purchase requisition event?

9-70

Query to calculate number of times an item has been requisitioned during a time period
Tables to consider
Purchase Requisition PurchReqID Date MaxBudget DateNeeded SupervisorID R17 4/22/2010 forPurchas $30,000.00 5/2/2010 E5 e R18 5/5/2010 $1,400.00 5/23/2010 E5 R19 5/6/2010 $5,500.00 5/20/2010 E5 R20 5/15/2010 $200.00 5/25/2010 E5 R21 5/18/2010 $7,500.00 5/26/2010 E5
PropositionPurchaseRequisitionInventoryType PurchRequistionID ItemID QuantityNeeded EstimatedUnitCost R17 BIS1 100 $20.00 R17 HUS1 150 $30.00 R17 LIS1 200 $36.00 R17 TIS1 300 $48.00 R18 MIN1 20 $56.00 R18 TTP12 20 $10.00 R19 BIS1 100 $20.00 R19 MIN1 60 $56.00 R20 TTP12 20 $10.00 R21 LIS1 200 $36.00

PurchaseAgentID E12 E12 E12 E12 E12

RecommendedSupplier V7 V14 V7 V7

InventoryType ItemID Description BIS1 Big Stuff HUS1 Huge Stuff LIS1 Little Stuff MIN1 Miniature Stuff TIS1 Tiny Stuff TTP12 Tiara

UnitOfMeasur Standard Cost List Price Each e $20.00 $50.00 Each $30.00 $70.00 Box of 6 $36.00 $72.00 Box of 24 $56.00 $110.00 Box of 12 $48.00 $96.00 Each $10.00 $25.00

9-71

Query to calculate number of times an item has been requisitioned during a time period

9-72

Reservation Relationship Query Types

What resources or resource types is a commitment event agreeing to increase or decrease? What quantity of a resource or resource type is a commitment event agreeing to increase or decrease? What dollar value of a resource or resource type is a commitment event agreeing to increase or decrease? When did an event commit to increase or decrease a specific resource or resource type? Where did an event commit to increase or decrease a specific resource or resource type?

9-73

Acquisition Cycle Reservation Queries

Which inventory types does a specific commitment event agree to increase? What quantity of each inventory type does a specific commitment event agree to increase? What unit cost was quoted for each inventory type in a specific commitment event? What was the total dollar value of purchase orders for a specified time period? (Note: if total dollar amount is stored in the purchase order event table, then it is not necessary to use the reservation relationship to meet this information need) What is the average dollar value of purchase orders of a specified inventory type for a specified time period?

9-74

Participation Relationship Query Types

Which agent(s) participated in a specified event? How many events of a specified type has a specified agent participated? What is the total dollar value of events of a specified type in which a specified agent has participated for a specified time period? When did a specified event in which a specified agent participated occur? Where did a specified event in which a specified agent participated occur?

9-75

Acquisition Cycle Participation Queries

From which supplier was a specific purchase made? By which purchase agent was a specific purchase order placed? How many purchase orders did a specified purchase agent make during a specified time period? What is the total (or average) dollar amount of purchases made by each purchasing agent during a specified time period? When was a specified purchase received, and by which receiving clerk (include clerks id, name, and telephone number)? To which supplier have the most purchase returns been made?

9-76

Query for date and receiving clerk associated with specific purchase
Tables to consider
Purchase ReceivingReportID RR18 RR19 RR21 RR22 RR25 Date DollarAmount ReceivingClerkID 4/30/2010 $28,450.00 E247 5/8/2010 $1,100.00 E247 5/10/2010 $3,240.00 E247 5/12/2010 $2,000.00 E251 5/12/2010 $480.00 E247 SupplierID V7 V14 V14 V7 V90 VendorInvoice InvoiceAmount CashDis burseme VI4167# $28,450.00 40 ntID 821536 $1,100.00 821983 $3,240.00 VI5213 $2,000.00 312353 $480.00

Receiving Clerk ReceivingClerkID Name E247 Kenneth Barki E251 Rita Barki

Address 4312 Monticello Dr. 4312 Monticello

Telephone 556-4891 556-4891

DateOfBirth 4/14/1945 5/22/1948

9-77

Query for date and receiving clerk associated with specific purchase

9-78

Multiple-Relationship Acquisition Cycle Queries

Which purchase orders have been partially filled?
requires stockflow, reservation, and fulfillmentpurchaseorder-purchase relationships

What is the total dollar value of accounts payable for a specified supplier at a point in time?
requires duality, participation-supplier-purchase, and participation-supplier-cash disbursement relationships

On which requisitions has a specified vendor been recommended as the recommended supplier?
requires proposition and participationpurchaserequisition-supplier relationships

9-79

Multiple-Relationship Acquisition Cycle Queries

Which purchase agent ordered a specified inventory type from a specified supplier?
requires reservation, participation-supplierpurchaseorder, and participationpurchaseagent-purchaseorder relationships

What is the total dollar amount of purchases of a specified inventory type that have been made from suppliers in a specified region?
requires stockflow-purchase-inventory and participation-supplier-purchase relationships

9-80

Accounts Payable per Supplier

Tables to consider
Purchase ReceivingReportID RR18 RR19 RR21 RR22 RR25 Date DollarAmount ReceivingClerkID 4/30/2010 $28,450.00 E247 5/8/2010 $1,100.00 E247 5/10/2010 $3,240.00 E247 5/12/2010 $2,000.00 E251 5/12/2010 $480.00 E247 SupplierID V7 V14 V14 V7 V90 VendorInvoice InvoiceAmount CashDis burseme VI4167# $28,450.00 40 ntID 821536 $1,100.00 821983 $3,240.00 VI5213 $2,000.00 312353 $480.00

Cash Disbursement DisbVoucherID VoucherDate DollarAmount CheckNumber 39 5/15/2010 $746.57 41234 40 5/25/2010 $28,450.00 41235 41 5/29/2010 $398.12 41236

CashAccountI APClerkID D Ca123501 E36 Ca123501 E36 Ca123501 E36

PayeeID E23 V7 E41

Purchase Return Purch Date Dollar Packing Debit Receiving SupplierID Dept Shipping ReturnID Amount Slip# Memo# Report# SupervisorID ClerkID PR3 5/17/201 $480.00 22 3 RR25 V90 E5 E41 0

9-81

Accounts Payable per Supplier

Constrain purchase date and sum purchase dollar amount for each supplier

9-82

Accounts Payable per Supplier

Join purchase and cash disbursement tables and constrain cash disbursement date

9-83

Accounts Payable per Supplier

Sum the cash disbursements by supplier

9-84

Accounts Payable per Supplier

Join purchase and purchase return tables; Constrain purchase return date

9-85

Accounts Payable per Supplier

Sum purchase returns by supplier

9-86

Accounts Payable per Supplier

Combine purchases and purchase returns by supplier to get unreturned purchases

9-87

Accounts Payable per Supplier

Combine unreturned purchases and cash disbursements by supplier to get unpaid purchases

Result for May 31, 2010

9-88

Summary
We discussed the acquisition/payment process and how it fits in at the value system and value chain levels We discussed the extended REA pattern at the business process level We examined documents typically used to represent events and discussed related resources and agents We examined examples of relational database tables for the acquisition cycle and discussed data input into those tables We systematically discussed types of queries for the acquisition/payment process that may be needed to support decision-makers in various functional areas We provided selected examples of queries of various types

9-89

ENTERPRISE INFORMATION SYSTEMS

A PATTERN BASED APPROACH

Chapter 9

End of Chapter

McGraw-Hill/Irwin

Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.