Reference no: EM131808438

Mason Computers is in the industry of computer sales. Its main competition is other major computer companies. Its market share is small compared to the industry leaders, but it hopes to increase its share by becoming more responsive to its customers' orders through reengineering its sales order processing system. That is, Mason Computers is moving from a semi-automated system to an event-driven ERP system. Mason Computers has 147 employees, and the main office is located in Fairfax, Virginia.

Computers sells computer systems it manufacturers itself primarily to small businesses who have already established credit with the company. It offers many different packages to accommodate its end-user customers, about 15 different bundles in all. Customers receive a satisfaction guarantee for 30 days after receipt of their computers.

Last year, Mason Computers' market share dropped in comparison to its competition. A survey revealed that one reason was because customers were not getting their computers on time. The lead times were too long and were always a day or two late. Customer orders need to be sent out within 48 hours from the day they are received, and inventory records need to be updated as orders are placed to be able to accurately tell customers how long a lead time is or whether a back-order is necessary. The board of directors also suspects that internal control weaknesses exist that might lead to internal fraud. Hence, the reason management has decided to implement an ERP system.

When customers need to order new computers, they call Computers to place an order. A sales representative will create two copies of a formal sales order and one copy of a stock release document. The sales representative staples the one copy of the approved sales order to the stock release and sends it to the warehouse department. The other copy of the sales order is filed numerically in the sales department.

Willie, a warehouse employee, receives the stock release, picks the goods, and forwards the goods and the stock release to the shipping department. Clara, a shipping clerk, proceeds to update the inventory subsidiary ledger to account for the computers she is going to load on the truck, and prepares the packing list and three copies of the shipping notice. The shipping companies arrive every day at 4:30 PM, and Clara gives them the original shipping notice and the computers to be shipped. After she knows the goods are on their way to the customer, the stock release, a copy of the shipping notice, and the sales order are stapled together and sent to Barb in the billing department. The last copy of the shipping notice is filed in her department numerically.

Barb receives the order, stock release and shipping notice, prepares the invoice, makes a copy of it for filing in the department, and mails the copy to the customer. Barb updates the sales journal and then sends the original invoice, sales order, stock release, and shipping notice to the accounts receivable department.

At the end of each month, the accounts receivable department mails customer statements to customers with balances owing. Mason Computers accepts installment payments. Mickey in the mail room receives the checks and sends them to cash receipts. Mickey's boss, Muhammad, also works in the mail room, but is too busy with administrative work in his office behind closed doors to supervise the opening of the mail. This structure allows mail room clerks like Mickey to listen to music while they work and not disturb Muhammad. Mickey also happens to be the Adam's, the controller, son. Adam thought it would be wise to get his son's foot in the company's door by getting him a low-level job in the mail room.

Carol, the cash receipts clerk, receives the checks and updates the cash receipts journal. She stores them in her top drawer until the end of the week, at which point the controller prepares a deposit slip and deposits the checks at the Bank of New York.

At the end of the month, Adam makes sure all transactions are reconciled in the general ledger. If they are not, he asks the corresponding department to verify the books and report back to him. Usually the department in question can identify and correct the problem and tell Adam what adjusting entries to make.

Required:

1. Draw an REA model with cardinalities for the operating events in the sales/collection process described above. Make sure you differentiate between the operating and the information events. The REA model can be hand-drawn but neatness is required.

2. List each database table required, complete with key attributes (primary keys), foreign keys, and non-key attributes. Use proper notation as described in the lectures. This part of the requirement needs to be typewritten using word processing software. You will not use Microsoft Access for this assignment