Rea Diagram for Food and Beverage Company

F&B Integrated REA Diagram This integrated REA diagram combines 4 individual cycles together, Revenue cycle indicated in blue shape, Expenditure cycle indicated in green shape, Production cycle indicated in red shape and Human Resource cycle indicated in orange shape. There are 4 integrated resources divided into 2 types which are tangible and intangible. Tangible resources include ‘Inventory (Raw material)’ , ‘Inventory (Finished goods)’, ‘machine&equipment’ and ‘Cash’. Only intangible resource shown in this REA diagram is ‘Employee time and skill’. There is also one integrated event, ‘Disburse cash’ , which is linked to 3 events, ‘receive raw material’ (Expenditure cycle) , ‘Acquire PPE’(Expenditure cycle) and ‘record time worked’( in Human Resource cycle). According to economic duality , Inventory (Raw material) is increased by ordering and receiving raw material (Expenditure cycle) and decreased by being used in issuing raw material(Production cycle). At the same time, Inventory(finished goods) is increased by producing finished goods(Production Cycle) and decreased by taking day-to-day order and shipping goods to customer. Cash resource is increased by collecting payment and is decreased by disbursing to employee as salary and to supplier as payment to ordered goods or PPE.
Revenue cycle
The cardinality between two events
Take estimated weekly order

Confirm&take day-to-day order

At this present, F&B has only two customers, its branch retail store and Starbuck. Every week both of them have to send ‘estimated order’ of demanded finished goods for the next coming week in advance so as to let F&B arrange sufficient inventory. Every afternoon F&B confirms and takes day-to-day order from both of the two customers. The ordered goods are going to be shipped tomorrow morning.
Collect payment

Ship goods to customer

Therefore, each ‘take estimated weekly order’ may involve zero ‘confirm&take day-to-day order’ due to cancelling estimated