Fairfax Bread Company Fairfax Bread Company (FBC) is a national bread company focused on using high quality ingredients with retail locations in…

Fairfax Bread Company

Fairfax Bread Company (FBC) is a national bread company focused on using high quality ingredients with retail locations in Fairfax, Washington DC, Baltimore and Philadelphia.  The company was started by a father and son who each have an entrepreneurial spirit and a love of warm bread. 

In order to manage the various locations and maintain consistent product quality between those

locations, ingredients for each location are ordered from thecorporate office headquarters in

Fairfax.  The orders are based on input from each store manager and shipped directly to each

store location. 

Description of the Acquisition Process

The Fairfax Bread Company acquisition cycle begins when the store manager reviews the

ingredient inventory on a daily basis to determine what is needed.  If the review shows an order

is needed, the store manager creates a purchase requisition in the system using the inventory and

purchase requisition files.  Once the purchase requisition for their store location is entered, the

store manager prints one copy of the purchase requisition which is filed in the store manager’s

office by date.A purchasing agent at corporate prints the day’s purchase requisition requests entered for each location from the system.  Based on the purchase requisition form and contact with vendors, the

purchase agent enters the information into the company database to create a purchase order.  The

purchase agent pays for goods at the time of order using the company credit card.  In order to

take advantage of possible price discounts, the purchase agent may negotiate costs with the

vendor if necessary.  The purchase agent may also combine purchase requisitions to achieve

volume discounts.  Since each vendor does not supply all ingredients, multiple purchase orders

are often needed in order to fulfill each request.  The computer process accesses the vendor and

inventory files and updates the purchase order and cash disbursement files.  Three copies of the

purchase order are subsequently printed.  One copy is sent to the vendor, one copy is sent to store

receiving and one copy is filed with the purchase requisition by date in the purchasing

department. 

 As a general corporate policy, FBC requires disclosure of related party transactions and in an

attempt to avoid kickback schemes, this policy applies to vendor and purchasing department

employees.  If a related party is identified, the accounting manager will determine how best to

maintain arms-length transactions. A receiving clerk at each location is responsible for receiving, inspecting and recording each delivery for correct items, quantity and quality.  When a delivery comes in, a receiving clerk reviews the goods and compares them to the purchase order document

 received from purchasing. 

If there is a difference between received goods and the purchase order, the store manager

resolves the discrepancy.  Sometimes the difference is because the vendor allows items to be

backordered and has only sent the items available at that time.  The receiving clerk keys the data

into the system to update the inventory file and the received goods file and prints 2 copies of the

receiving report.  Then the receiving clerk files the purchase order form and receiving report part

1 together by vendor name and sends part 2 of the receiving report to Accounting.  Fairfax Bread Company may need to return ingredients to vendors if the items were sent incorrectly or do not meet quality standards.  The receiving clerk will contact the vendor and arrange for the return of goods.

Required:

1.Conceptual Model:  Draw an REA model with cardinalitiesfor the operating events in the

acquisition process described above.  Make sure you differentiate between the operating

events and the information events.

2.Logical Model:  List each database table required, complete with key attributes (primary

keys), foreign keys, and non-key attributes.  Label each keys.