AFM241 Study Guide - Final Guide: Accounts Receivable, Profit Margin, Database
30 May 2018
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AFM241 Chapter 5 Notes: Introduction to Database Theory
News Based Context and Perspective
• Analogy that has been made a lot is that of a database and library
o While the library collects and organizes books – source of knowledge – a
database collects and organizes data which is a source of information
o “Lost in cyberspace” implies destruction of accumulated knowledge with dire
implications for future generations
• From an organization’s perspective, database plays similar role
o It is like a library that captures important information related to company’s
employees, customers, partners and their organization related actions
• This chapter will use BlueBikes as an example throughout
o Company assembles and distributes bikes to retail bike shops
o Company’s database records: sales of certain product (road bikes, Model is RC
Hybrid Whistler 10 2012 Large), to a specific customer, over a certain period (Jan
– May 2013), by one of the company’s sales associates (Alpha Salespearson)
o Capturing this information lets management evaluate which products are
selling, how to manage inventory, which customers are most profitable and
which salesperson are most active
• Trying to manage and plan the company’s future without that knowledge could take a toll
on firm’s success
• Main objective of this chapter is to introduce the basics of database theory
o Vast majority of databases used by business today are relationship, we are
going to focus on relational database theory
Learning objectives
• Business process
• Order-to-cash and purchase-to-pay
• Data vs. information
• Database and database management systems
• Relationship database
• Production v. Decision Support System database and data warehouse
• Entity, attribute, occurrence and associations
• Associations among attributes and associations among entities
• Primary and foreign key
• Normalization and Normal Forms
• Data redundancy and data anomalies
• Entity relationship diagram
5.1 Introduction
• Typical organization engages in various business processes such as purchasing
inventory and making payment to suppliers, selling products and collecting payments
from customers, and hiring employees
• BlueBikes is a wholesale company that buys bikes, parts and accessories as well as kits
for bikers in large volume from manufacturers
• One can classify the business processes at BlueBikes as customer or supplier based
o Customer’s side: process of generating sales and collecting payments from
customers known as Order-to-Cash process:
1. Generate and record sales orders
2. Ship content of orders to customers
3. Send invoice for products to customers and record amount to be received
4. Receive and record payments
o Supplier’s side: the process of acquiring products from various vendors and
making payments known as Purchase-to-Pay process:
1. Prepare and record purchase order
Document Summary
Afm241 chapter 5 notes: introduction to database theory. Lost in cyberspace implies destruction of accumulated knowledge with dire implications for future generations: from an organization"s perspective, database plays similar role. Hybrid whistler 10 2012 large), to a specific customer, over a certain period (jan. Ideally the data captured during a business process will be sufficient for someone in sales, marketing, accounting or warehouse to reconstruct all important steps of that business process. In the warehouse, beta stockeroom will receive the packing list and shipping label pick bikes, package them and attach the shipping label and send them off to customer (cid:131) If sale has brought the stock level below a safety level, a purchase order will be prepared initiating the first stage in purchase-to-pay process. Data vs. information: data are facts about people, places, things or events, business data factors about employees, customers, vendors, products, inventories.
