The Trailspan Travel Club markets travel books across the United States and Canada. Members of the travel club place orders online through Trailspans website, over the phone by calling an 800 number, or by mail. Online orders are entered into the club computer system automatically. Telephone and mail orders are entered into Trailspans computer system by the clubs sales representatives. Once the orders have been entered, an order notification is sent to the shipping department. A shipping clerk retrieves the ordered items from inventory and then packs and ships each order. Trailspan only ships complete orders; if an item is temporarily out of stock, it notifies the customer that the entire shipment will be delayed. Once an order has been shipped, the computer system sends an invoice to the member and sends a notification to accounts receivable. Members who do not pay within 30 days are charged 6% interest on their outstanding balance. When making payments, members may pay part or all of their remaining balance. A clerk in the cash receipts department processes all cash receipts and makes deposits into the companys bank account.

When a particular inventory item meets its reorder point, Trailspans computer system generates a purchase order and the purchasing agent sends the purchase order to the appropriate vendor. Suppliers fill each order individually; sometimes, however, they are out of stock of an item. In such cases, they immediately ship what is in stock and then make a second delivery for items that they had to back order. Once an inventory order is received by the receiving clerk, it is counted and sent to inventory. The cash disbursements clerk pays all vendor invoices individually as they become due to take advantage of any purchase discounts.

REQUIRED

a. Prepare an integrated REA diagram for the revenue and expenditure cycles of Trailspan Travel Club.

b. Prepare a set of tables to implement your data model in a relational database. Assign every attribute mentioned in the narrative to the appropriate table(s).

DISCUSSION QUESTIONS

18.2. Why take the time to develop separate REA diagrams for each business cycle if the ultimate objective is to combine them into one integrated enterprise-wide data model? Why not just focus on the integrated model from the start? (Romney 549)