Case Scenario:
Bowerkate Corporation sells handcrafted surfboards to customers through its network of company salespeople. Each surfboard is given a unique identification number and a suggested selling price when finished. Upon employment each salesperson is immediately assigned to service a separate group of customers. When customer data are initially entered into Bowerkate’s information system, the customer is immediately assigned to a salesperson. Each sale can include one or more surfboards and can be paid for in any of three ways: (1) immediately in cash, (2) on the 15th of the following month, or (3) over the course of six months. No more than one salesperson participates in making a particular sale. A salesperson may negotiate with a customer and agree on a selling price for any surfboard that is lower than that surfboard’s suggested selling price, especially if the customer is a high-volume customer or if that surfboard is a slow seller (i.e., it has been in stock for a long time). Although the vast majority of cash receipts come from customers (any particular cash receipt would be from only one customer) for sales, some cash receipts come from other sources (e.g., bank loans). Every cash receipt is processed by exactly one of Bowerkate’s several cashiers and is deposited into one of Bowerkate’s bank accounts. Information about surfboards, employees, and customers often needs to be entered into the database before any transactions involving them have occurred. The following data items (attributes) are of interest to potential users of this model:
surfboard-id# cash-account-balance
customer-name qty-of-items-sold-on-a-particular-invoice
salesperson-name cashier-name
cash-receipt-total-amount description-of-surfboard
location-of-cash-account customer-accounts-receivable-balance
sale-number salesperson-number
cash-receipt-amount-applied to-a-sale cashier-ID-number
cash-account-number cash-account-type
customer-number suggested-selling-price-for-a-surfboard
actual-selling-price-for-a surfboard sale-total-amount
salesperson-commission-rate remittance-advice-number
Note: Salesperson commission rate is determined per contractual arrangement with each salesperson and for a particular salesperson it is the same percentage rate no matter what items he or she sells.
Instructions:
Problem: Create an REA model (in either BNF Grammar format or in ER diagram format) for Bowerkate Corporation’s revenue cycle as just described. Be sure to include all relevant entities, relationships, attributes, and participation cardinalities.