Baer Belly Bikinis Inc. (BBB) is a small business located in Santa Monica, California. It sells swimwear and related products to specialty stores throughout the United States. It also sells its products to individuals over a company website. Paige Baer founded BBB almost 10 years ago after she graduated from the Fashion Institute of Design and Merchandising. She recognized the need for swimsuits sold as separates. Her business has grown rapidly, and now BBB has a large following of customers who want to be able to mix and match to find their ideal swimsuit. Currently, BBB products are carried in more than 1,000 specialty swimwear boutiques and online retailers.

During an initial interview with Paige Baer, she outlined BBBs business processes. She acknowledged that she doesnt know much about accounting and information technology. As the business grew, her accounting suffered and information systems were added piecemeal. So, she is looking forward to an assessment of her requirements and recommendations that would position BBB for substantial further growth.

First, Paige described BBB sales to independent boutique retailers. BBB uses a group of independent sales representatives to sell its products to boutique retailers around the country. These sales representatives are not BBB employees. They are paid commissions based on the dollar volume of sales. After working with the sales representatives, individual retailers call BBB to place their order for the upcoming season. BBB will then ship the products when they become available. The retailers are expected to pay for shipments within 30 days. BBB offers a prompt payment discount for payment within 10 days. The following material summarizes BBBs activities to prepare for and conduct the sales process:

• Summer
  • BBB finalizes designs for next year's products and prepares catalog materials with information on its future products.
• Fall to Spring
  • BBB sales representatives (independent agents working on commissions) visit retailers to develop sales. (BBBs payment of commissions to sales representatives is outside the scope of this case, although you should include the Sales Reps in your model and database.)
  • BBBs retailer customers place orders for one of two deliveries in season: (1) early spring (April) and (2) early summer (May/June). BBB records information on its retailers before they place any orders.
• Upon receipt of finished goods from their manufacturer in April and May, BBB ships products to retailers.
• Retailers payments are due 30 days after shipment and include shipping costs. Some retailers pay late. Some take advantage of the prompt payment discounts.

BBB Finished Goods Inventory BBB tracks its inventory by catalog number (catalog#). Each product is identified by color code, use (e.g., tops or bottoms), and type (e.g., the specific design of the piece). The color codes reflect the color and fabric design options, and they can change each year. At the beginning of the season, the quantity on hand of each item is zero. The quantity on hand increases when BBB gets deliveries from its manufacturer (outside the scope of this case) and decreases as it ships the products to the retailers to fill orders.

BBB Shipments BBB makes one shipment for each retailer order and records revenue when the products are shipped. Warehouse employees prepare the shipments. All shipments are made under BBBs contract with a shipping company. BBB charges customers for the cost of the shipment, so the amount due from the retailers depends on the wholesale price of each item, the quantity shipped, and the shipping cost for the shipment. Payments to the shipping company are outside the scope of this case.

BBB Cash Receipts Retailer customers send payment by check according to the payment terms (BBB standard payment terms are 2% 10 days net 30, meaning they receive a 2% discount on any amount they pay within 10 days with the net balance due within 30 days). The payment from the retailer customer always applies to only one order, but sometimes the retailers send multiple checks for that order. A BBB employee (accounts receivable) logs cash receipts from retailers. At the end of the day, the cash receipts are deposited intact into one bank account (BBBs main account). Each cash receipt is tracked by unique sequential cash receipt number.

Connect Requirements

Based on the above information, answer the following multiple choice questions.

Required:

1. In the above diagram, the correct name of the class designated with the letter A is which of the following?

Multiple Choice

• None of these

• Inventory Types

• Retailer Customers

• Fabric Colors

• Finished Inventory

2. In the above diagram, the correct name of the class designated with the letter B is which of the following?

Multiple Choice

• None of these

• Fabric Colors

• Finished Inventory

• Retailer Customers

• Inventory Types