AFM241 Chapter Notes - Chapter 5: Database, Database Theory, Data Warehouse

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lilacmouse857

17 May 2018

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM241

Professor

Will Xiang

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Chapter 5- Introduction to Database Theory

5.1 Introduction

• BlueBikes is a wholesale company that buys bikes, parts and accessories, as well as various kits for

bikers in large volume from manufacturers.

• Sells to retail stores

• On the customer side (Order to cash process), they have

• Generate and record sales orders

• Ship content of orders to customers

• Send invoice for products to customers and record amount to be received

• On the supplier side (Purchase to Pay process)

• Prepare and record P.O

• Receive goods and record the receipt of inventory

• Receive invoice from vendor and record amount to be paid

• Submit and record payment

• For the captured data to be able to evaluate the firm`s ability to be efficient and effective at the

processes. The minimum data to be collected should capture the following elements:

• All individuals or organizations involved in each activity. E.g. name of salesperson

• All assets that are exchanged as a result of this activity

• All locations in which the activity took place; all locations where exchanged assets were

before and after the event; and the location of all parties related to the activity during the

activity and for future correspondence

• All the time periods related to the completion of the activity

• In the case of BlueBikes the order to cash process

• Salesperson (Alpha) → generate a sales order from a customer (Rims) for certain products (5

road bikes- RC model) at a certain price ($1100 per bike)→ look at the availability of RC

odel i fi’s aehouse → establish a delivery date or determine whether the product

should go on back order

• In the warehouse, Beta will receive the packing list and shipping label → pick bikes →

package them → attach shipping label → send to customer → purchase order will be

prepared if the sale brings the inventory below certain level

• These sales data will be helpful for management to perform a sales analysis by salesperson, by

territory, by product, by customer, and time period

• A database management system (DBMS) is a program for capturing, accessing, and managing data

• Provide the information for BlueBikes for coordinating the activities of its functional areas

ad plaig fo the opa’s futue

• Data are facts about people, places, things, or events

• Information is what you get when you process the data into something useful

5.2 Relational Databases

• Two of the most common databases are production and decision support system (DSS)databases

• A production database is used mainly to track data about frequent and complex transactions

• Each transaction involves one or multiple actions related to reading from or writing to a database

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• E.g. when BlueBikes purchases a bike from one of its suppliers on credit, the AP will have to

be updated to reflect the amount outstanding and inventory account too

• A DSS is more complicated, offers more extensive information generation and processing, as well as

management capabilities

• Focuses on the information requirements instead of the transaction requirements

characteristic of production databases

• The most popular DSS databases are called datawarehouses- primarily storage facilities

dedicated to processing existing data taken from production databases into useful

information

• updated infrequently because of lower volume of transactions to record

• data about the data is referred to as metadata which is kept in a data dictionary – a

compilation of all the components of the data, their names, their characteristics, and also

facts about the nature of relations between the different sets of data

• the program that manages all this data and metadata is called a database management

system (DBMS). Performs the following functions:

• manages metadata in a data dictionary

• produces complex data storage functions, including enforcing data input

requirements

• creates and enforces a secure environment for the storage of data

• manages the complex needs of a multi-user environment

• enforces data integrity at all levels of the database

• four different database models

• 1. Hierarchical

• 2. Network

• 3. Relational

• 4. Object-oriented

• The most prevalent is the relational database, implemented in the form of a relational Database

management system (RDBMS)

• E.g. Microsoft access

• Data is conceptually represented in two-dimensional tables (files, relations) consisting of

rows (records) and columns (attributes, fields)

• Uses attributes to associate data from different tables

• Allows user to link sets of data in a tabular format, creating relations that are easy to

visualize

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5.3 Database Theory & Terminology

5.3.1 Terminology

• Databases generally store data about entities and their attributes.

• An entity (also referred as table or file or relation) is something that users want to track

• Entity can be a person, a concept, or event

• It can be tangible or intangible

• Anything a company wants to record is an entity

• Typically, they are written as tCustomer, tOrder, and tProduct.

• Each of these entities has several characteristics or properties known as attributes (also referred to

as a fields or columns)

• If entity is a noun then attributes are adjectives describing the noun

• E.g. the entity customer in the BlueBikes database has the following attributes: CID (customer

identification number), company, contract, address, city, province, postal code, phone, salesperson

• An entity occurrence (also referred as record or row) refers to an individual instance of an entity

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Document Summary

The minimum data to be collected should capture the following elements: all individuals or organizations involved in each activity. Information is what you get when you process the data into something useful: data are facts about people, places, things, or events. Object-oriented: the most prevalent is the relational database, implemented in the form of a relational database management system (rdbms, e. g. 5. 3. 1 terminology: databases generally store data about entities and their attributes, an entity (also referred as table or file or relation) is something that users want to track. A set of data describing a specific customer or product. But there will be unnecessary null values for customers who only have one number. A (eid) functionally determines b (name, date of birth, date of joining, etc. ) if and only if there is a one association from a to b. depicted as a b. If a functionally determines b (a b), and b c, then a c.

Related Questions

Question 1

Identify the item below that is not one of the four different types of data processing activities.

		deleting
		reading
		creating
		using

Question 2

All of the following are advantages of an ERP system except

		ERPs permit manufacturing plants to receive new orders in real time.
		in an ERP, data input is captured or keyed once.
		it takes considerable experience and training to use an ERP system effectively.
		ERPs permit management to gain greater visibility into every area of the enterprise.

Question 3

Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records. The audit has been unable to reproduce financial reports that were prepared by Sam. While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies might contribute to poor decisions. Which of the following characteristics of useful information is absent in the situation described above?

		relevant
		reliable
		complete
		timely
		understandable
		verifiable
		accessible

Question 4

An ERP system might facilitate the purchase of direct materials by all of the following except

		preparing a purchase order when inventory falls to reorder point.
		routing a purchase order to a purchasing agent for approval.
		communicating a purchase order to a supplier.
		selecting the best supplier by comparing bids.

Question 5

Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the price of the Japanese fans is a(n)

		entity.
		attribute.
		field.
		record.

Question 6

Which of the following is not considered a source document?

		A copy of the company's shipping document.
		A copy of the company's ledger.
		A copy of the company's sales journal.
		A copy of the company's financial statements.

Question 7

In an ERP system, the module used to record data about transactions in the disbursement cycle is called

		financial.
		order to cash.
		customer relationship management.
		purchase to pay.

Question 8

Baggins Incorporated identifies new product development and product improvement as the top corporate goals. An employee developed an innovation that will correct a shortcoming in one of the company's products. Although Baggins current Return on Investment (ROI) is 12%, the product innovation is expected to generate ROI of only 10%. As a result, awarding bonuses to employees based on ROI resulted in

		goal conflict.
		information overload.
		decreased value of information.
		goal congruence.

Question 9

________ are examples of activities that constitute inbound logistics.

		Activities that transform inputs into final products or services
		Activities that provide post-sale support to customers
		Activities that consist of receiving, storing, and distributing the materials used as inputs by the organization to create goods and/or services it sells
		Activities that help customers to buy the organization's products or services

Question 10

In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems?

		the revenue cycle
		the expenditure cycle
		the human resources / payroll cycle
		the financing cycle

Question 11

The collection of customer payment is part of which transaction cycle?

		the human resources cycle
		the production cycle
		the revenue cycle
		the expenditure cycle

Question 12

Which of the following is an example of source data automation?

		POS (point-of-sale) scanners in retail stores
		a bill of lading
		a subsidiary ledger
		a utility bill

Question 13

All of the following are guidelines for developing a good coding system except

		be as sophisticated as possible to promote usage.
		be consistent with its intended use.
		be flexible to allow for growth.
		be consistent with the company's organization structure.

Question 14

What is a key decision that needs to be made with regards to borrowing money from lenders?

		the location
		pro forma income statement
		how much capital to acquire
		job descriptions

Question 15

Identify the false statement below.

		A service company does not have an inventory system.
		Retail stores do not have a production cycle.
		Financial institutions have installment-loan cycles.
		Every organization should implement every transaction cycle module.

Question 16

The chart of accounts of a fast-food restaurant would probably include

		a list of customers.
		a list of financial statement accounts.
		a list of vendors.
		a list of employees.

Question 17

Which statement below regarding the AIS is false?

		Traditionally, most AIS have been designed so that both financial and operational data are stored in a manner that facilitates their integration in reports.
		The AIS must be able to provide managers with detailed and operational information about the organization's performance.
		Both traditional financial measures and operational data are required for proper and complete evaluation of performance.
		The AIS was often just one of the information systems used by an organization to collect and process financial and nonfinancial data.

Question 18

In Petaluma, California, electric power is provided to consumers by Pacific Power. Each month Pacific Power mails bills to 186,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate?

		well-designed paper forms
		turnaround documents
		source data automation
		sequentially numbered bills

Question 19

Data must be converted into information to be considered useful and meaningful for decision making. There are seven characteristics that make information both useful and meaningful. If the same information can be reproduced by two independent and knowledgeable people, it is representative of the characteristic of

		verifiability.
		truthful.
		relevance.
		reliability.

Question 20

		entity.
		attribute.
		field.
		record.

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AFM241 Chapter Notes - Chapter 5: Database, Database Theory, Data Warehouse

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