*Produce an annotated list of at least 10 business relationship rules for the assigned NBD case. Include a reference to the case study section(s) that apply to each rule.

*For each rule draw the entity relationship diagram including the cardinality and existence dependency.

Background for Natural By Design

Natural by Design, Inc. (NBD) is a partnership that designs and develops interior and exterior landscapes for hotels, restaurants, condominiums, and large private estates. In their designs, they use a mixture of commonly available plants, flowers, and shrubs; imported rare and exotic plants; pottery; and other materials. NBD employs thirty people and has gross sales of $4.1 million with a before-tax profit of $1,000,000. Keri Yamaguchi and Stan Fenton own the partnership equally. Keri, a designer, manages the artistic side of the business including supervising the design activity and job production and selecting vendors. Stan is the general manager who purchases inventory and supervises the sales and financial activities.

Acquiring Projects

To acquire projects, the NBD salespeople contact potential customers that have indicated that they are interested in doing business with NBD. They collect information about the project, which is then passed to Keri. Based on this information Keri assigns one (or more) of NBD's six full time designers (or herself) to the client based on an assessment of the project requirements and designer skills. Each designer potentially could be working on many projects.

Design Group

NBD's Design Group employs six full-time designers; an administrative assistant, Connie Nguyen; a botanist, and a group manager, Cheryl Poy. Cheryl works closely with Keri, who remains the firm's chief designer. This arrangement could be problematic except that Cheryl and Keri have worked together for many years, and they have established a relationship in which Cheryl manages the more administrative concerns of the design group while Keri oversees and contributes to the major design activities.

Design Process

Once assigned to a project, the designer meets with the client to determine the client's needs, and then develops a design, illustrated by preliminary sketches. Depending on the size and complexity of a project, the designers may produce one or more preliminary sketches. The designers also prepare a written Design Bid that contains a general description of the project, a list of plants and materials with prices, and a listing of prices for labor, including the price for any designer hours that would be required once client approves the bid. Cheryl, the Design Group manager, must approve this Design Bid before it is shown to the client.

The designer presents the design bid and preliminary sketches to the customer for review. The customer provides feedback that the designer uses to make adjustments; this repeats until the customer approves (or rejects). If approved, the designer develops formal sketches and blueprints. Keri then forms a team consisting of the salesperson, the designer(s) and production workers. The project is turned over to the Production Group manager for resource planning.

Accounts Receivable follows up for installment payments based on the amounts listed on the design bid. NBD bills a client for pre-bid-approval design time only if the project is exceptionally large or risky; in all other cases, the costs of preparing the Design Bid and preliminary design drawings are factored into NBD's markup for plants, materials, and production-phase labor.

Tracking Designer Hours

Except for very small jobs, each designer (or the lead designer in the case of a larger project requiring two or more designers) is required to submit a budget of the time s/he expects to devote to preparing the bid. The Design Budget is submitted to Keri for approval after a preliminary meeting with a client so that the designer can realistically estimate the hours required to design each project.

Each designer submits a Designer Daily Work Report indicating the hours devoted to tasks accomplished each day for each of his or her projects

Issues

Except for very large and specialized jobs, the designers do not have the luxury of selecting plants that are not already on order or in inventory. Usually, customers are slow to approve a design, but, once they do approve it, they want near immediate implementation. Because NBD's procurement process is very slow, the designers have been told to work only with plants and materials that are in inventory or that will very soon be in inventory. This may hinder their ability to satisfy a customer.

Production Group

The Production Group implements the landscape designs. This group consists of the manager, Sue Kaufman; three gardeners; three laborers; and two drivers. The personnel in this group are assisted by outside specialists (for example, heavy equipment operators) and by part-time contract laborers. Production's work requires trucks, equipment, tools, supplies, materials, and plants. The vehicles, equipment, and tools must be moved from site to site.

Production Process

With many projects under way simultaneously, the scheduling of workers, equipment, and tools is critical. Sue is responsible for using the designer's bid and blueprint to generate a Production Plan. Data provided in the Production Plan includes information on the scheduling of labor and material delivery, project task completion dates, and other implementation data. Sue submits each Production Plan to Keri for approval before the plan is implemented. Keri returns the approved Production Plan to Sue who submits it to Connie for filing and tracking.

The lead production worker refers to the production plan details to get the daily instructions for materials, tasks, and staffing. Actual materials and labor hours are recorded and then forwarded to Connie.

Production Materials and Hours

Production workers submit a Production Daily Work Report, indicating the material and labor expended on each project each day. As a control measure, Bill Johnson, the Greenhouse clerk, must verify the cost of all plants, pots, and materials and must approve their removal from inventory..

NBD needs to track actual costs because, once the bid has been approved, NBD is committed to complete the project for the amount bid, Thus, if the net cost of plants and materials increases or the designers or laborers invest more time than expected, NBD must absorb the added costs, Clients are responsible for extra charges only if they change the design after the bid has been approved.

Once per week, Connie consolidates information from the Production Daily Work Report and the Designer Daily Work Report into a report showing the estimated and actual costs to date for each project and emails it to Stan, Keri, and the Group managers. She also prepares individual project reports that she distributes to them and the appropriate designers.

Issues

If a client requests changes to the design after production has begun, the designer prepares a revised bid and submits it to Sue Kaufman. Sue uses the revised bid data to generate a revised Production Plan and sends the revised plan to Keri for approval. There is sometimes confusion in managing the various versions of the plans and bids.

Changes to the Production Plan can also occur when the instructions for the day are not met. The reasons for this may vary from absenteeism to inclement weather. The original Production Plan is updated to accommodate postponed tasks.

Managing Inventory

Effective inventory management is critical to NBD's success. They must have appropriate plants and other materials available when needed; however, because their inventory is expensive to maintain, they do not want more inventory than necessary. But with order lead-time averaging 5 to 6 weeks on some of their more exotic plants, they need to maintain sufficient stock to carry them until the ordered items are delivered.

The Design Group keeps inventory records to facilitate the effective use of inventory. Specifically, for each plant type, they maintain data about the plant type, size, average net cost, list price, quantity in stock, quantity in stock and on bid, quantity on order, and quantity on order and on bid. The on-bid quantities are tracked so that designers know the quantity of uncommitted inventory available at any point in time. Similar information is maintained about pottery and decorative items, but only in stock and in stock/on bid quantities are maintained. For landscaping materials, only the description, unit, net and list prices, and quantity in stock are recorded.

Ordering Stock

Stan Fenton is responsible for ordering stock, but because he lacks Keri's knowledge of plants, he relies on her expertise to select suppliers for all NBD's plant stock. Once a year, Keri evaluates the price and quality of the plants and the quality of service provided by each plant supplier. She compiles this information into a report that lists the preferred and secondary supplier for each plant type. Stan refers to this report when he is preparing a purchase order to determine what to order.

The supplier report also lists the total quantity of each plant type used by NBD in the previous 12 months and each supplier's order lead-time. NBD does not need to maintain similar information for its other pottery and materials. These items are obtained from local suppliers who can usually deliver an order within 48 hours.

Tracking Inventory Transactions

Each day, Connie updates the inventory spreadsheet each time an order is placed, a shipment arrives, or a designer includes an item in a bid, Connie also keeps track of the stock items removed from physical inventory.

Overseeing the physical inventory is the responsibility of the Greenhouse Department, which performs all delivery and receiving tasks as well as caring for the plants in inventory. As Production crews load plants and other materials from inventory onto their trucks each morning, Bill Johnson, the Greenhouse clerk, monitors and controls the quantities leaving the loading dock. Bill signs off on a written list and gives it to the Production crew. At the end of the day, each Production crew submits these forms to Connie.

Issues

Connie Nguyen, the Design Group's administrative assistant, maintains inventory data in an Excel worksheet. Each day, Connie updates the numbers, and emails the updates to each designer. The designers work against these figures in deciding which plants to include in their designs.

There are a number of problems with this arrangement. First, designers work simultaneously, and sometimes they unknowingly use the same last items from inventory in their bids. They try to coordinate their activities to prevent this, but sometimes it is not possible.

Second, if a design bid is rejected or changed to eliminate plants or other materials, these items are not consistently placed back in available inventory. Sometimes designers forget to tell Connie about these changes. As a result, the number of items available to be used in bids is often larger than the records show.

Increasing Competition

A major concern for NBD is competition. In recent years, a number of similar firms have begun operation, and business that at one time was easy to obtain has now become very competitive. Due to competitive pressure, NBD is increasingly required to reduce its prices. While, on the one hand, Keri and Stan strive to provide the best and not necessarily the cheapest product, on the other hand, they cannot entirely ignore price levels set by their competition. To retain profitability in this environment, NBD must be as efficient as possible in all aspects of its business. This means buying at a low price, minimizing inventory costs, and passing on these savings to their customers.