• Submitted By: Hung-Do
  • Date Submitted: 01/16/2016 10:38 PM
  • Category: Business
  • Words: 304
  • Page: 2

17.2 The basic REA template includes links between two events and links between events and resources and between events and agents. Why do you think the basic REA template does not include direct links between (a) two resources, (b) two agents, or (c) between resources and agents?

a. The basic REA template was developed to assist in modeling an organization’s economic transactions and, therefore, centers on events, the resources they affect, and the agents who participate in them. Two events can be linked to reflect economic duality (the give-to-get relationship) or causal sequence (orders precede sales).

Most resources are independent of one another and thus do not need to be directly linked. For example, inventory and cash do not directly affect one another, but only do so through events such as the sale of inventory and subsequent receipt of cash. Nevertheless, in chapter 19 we will see that sometimes two resources may be directly linked to one another in order to represent information about location, such as in which warehouse inventory is stored.

b. Similarly, the basic REA template does not directly link agents to one another because they often do not influence one another. As with resources, however, we will see in chapter 19 that it is sometimes desirable to directly model links between agents. One reason would be to represent supervisory relationships; another would be to reflect the assignment of employees to service specific subsets of customers or suppliers.

c. Finally, the basic REA template does not include direct links between agents and resources because in many situations there is no reason to track such relationships. As chapter 19 will show, however, if management wants to assign and track custody over specific resources, it is possible to enhance the basic REA template to include direct links between resources and agents.