1.

The purpose of the TEXTBOOK INVENTORY SYSTEM at a campus bookstore is to supply

textbooks to students for classes at a local university. The universitys academic
departments submit initial data about courses, instructors, textbooks, and projected
enrollments to the bookstore on a TEXTBOOK MASTER LIST. The bookstore generates a
PURCHASE ORDER, which is sent to publishing companies supplying textbooks. Book
orders arrive at the bookstore accompanied by a PACKING SLIP, which is checked and
verified by the receiving department. Students fill out a BOOK REQUEST that includes
course information. When they pay for their books, the students are given a SALES
P a c k in g S lip
A C A D E M IC
DEPAR TM ENT

T e x tb o o k M a s te r L is t

TEXTBO O K
IN V E N T O R Y
SYSTEM

P U B L IS H IN G
CO M PANY
P u rc h a s e O rd e r

Book
R equest

S a le s
R e c e ip t

STU DEN T

RECEIPT.

2. The purpose of the PLANT SCIENCE INFORMATION SYSTEM is to document the study
results from a wide variety of experiments performed on selected plants. A study is
initiated by a researcher who submits a RESEARCH PROPOSAL. After a panel review by a
group of scientists, the researcher is required to submit a RESEARCH PLAN AND
SCHEDULE. A FDA RESEARCH PERMIT REQUEST is sent to the Food and Drug
Administration, which sends back a RESEARCH PERMIT. As the experiment progresses,
the researcher fills out and submits EXPERIMENT NOTES. At the conclusion of the
project, the researchers results are reported on an EXPERIMENT HISTOGRAM.

Process Modeling

9-2

R e s e a rc h P ro p o s a l
R e s e a rc h
P e r m it

R e s e a r c h P la n & S c h e d u le
RESEARCHER

P L A N T S C IE N C E
IN F O R M A T IO N
SYSTEM

E x p e r im e n t N o te s

FO O D & DRUG
A D M IN IS T R A T IO N
F D A P e r m it R e q u e s t

E x p e r im e n t H is to g r a m

3. The purpose of the production scheduling system is to respond to a PRODUCTION ORDER

(submitted by the SALES DEPARTMENT) by generating a daily PRODUCTION SCHEDULE,
generating RAW MATERIAL REQUISITIONS (sent to the MATERIALS MANAGEMENT
DEPARTMENT) for all production orders scheduled for the next day, and generating JOB
TICKETS for the work to be completed at each workstation during the next day (sent to the
SHOP FLOOR SHIFT SUPERVISOR). The work is described in the following statements.
The production scheduling problem can be conveniently broken down into three functions:
routing, loading, and releasing. For each product on a PRODUCTION ORDER, we must
determine which workstations are needed, in what sequence the work must be done, and
how much time should be necessary at each workstation to complete the work. This data is
available from the PRODUCTION ROUTE SHEETS. This process, which is referred to as
ROUTING THE ORDER, results in a ROUTE TICKET. Given a ROUTE TICKET (for a single
product on the original PRODUCTION ORDER), we then LOAD THE REQUEST. Loading is
nothing more than reserving dates and times at specific workstations. The reservations
that have already been made are recorded in the WORKSTATION LOAD SHEETS. Loading
requires us to look for the earliest available time slot for each task, being careful to preserve
the required sequence of tasks (determined from the ROUTE TICKET). At the end of each
day, the WORKSTATION LOAD SHEETS for each workstation are used to produce a
PRODUCTION SCHEDULE. JOB TICKETS are prepared for each task at each workstation.
The materials needed are determined from the BILL OF MATERIALS data store, and
MATERIAL REQUESTS are generated for appropriate quantities.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-3

Job Tickets
SHOP
FLOOR
SHIFT
SUPERVISOR
Production
Schedule
Production Order
SALES
DEPARTMENT

PRODUCTION
SCHEDULING
SYSTEM

Raw Material Requisition

MATERIALS
MANAGEMENT
DEPARTMENT

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-4
Production
Scheduling
System

Routing
Subsystem

Loading
Subsystem

Releasing
Subsystem

Process
Routing
Transactions

Process
Loading
Transactions

Process
Releasing
Transactions

Generate
Routing
Reports

Generate
Loading
Reports

Generate
Releasing
Reports

Production Order

SALES
DEPARTMENT

Workstations needed,
sequence,
time requirements

ROUTING
THE
ORDER

Route
Ticket

PRODUCTION
ROUTE SHEETS

Reservations
Already Made

LOAD
THE
REQUEST

WORKSTATION
LOAD SHEETS

New Reservations
BILL OF
MATERIALS
Materials Needed

Workstation Load Sheet

GENERATE
PRODUCTION
SCHEDULE
Production Schedule

Material Request

MATERIALS
MANAGEMENT
DEPARTMENT

Job Tickets

SHOP
FLOOR
SHIFT
SUPERVISOR

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-5

4. Policyholders must submit an EXPLANATION OF HEALTH CARE BENEFITS (EOHCB) along with
proof that their primary health policy claim has been paid. All CLAIMS are mailed to the
claims-processing department.
CLAIMS are initially sorted by the claims screening clerk. This clerk
returns all requests that do not include the EOHCB. For those requests returned, a PENDING
CLAIM is created, dated, and stored by date. Once each week, the clerk deletes all tickets
that are more than 45 days old and sends a letter to the policyholders notifying them that
their case has been closed. Requests that include the EOHCB are then sorted according to
type of claim. Requests that include an EOHCB REFERENCE NUMBER are matched up with an
EOHCB form, which is pulled from the OPEN CLAIMS file. At the end of each day, all these
claims are forwarded to the preprocessing department.
In the preprocessing department, clerks screen the EOHCB for missing
data. They complete the form if possible. Otherwise, a copy of the claim is returned to the
policyholder with a letter requesting the missing data. The original EOHCB is placed in the
OPEN CLAIMS file, and a PENDING CLAIM is sent to the claims screening clerk. Completed
claims are assigned a claim number, and the claim is microfilmed and filed for archival
purposes.
A different clerk checks to see if the PROOF OF PRIMARY HEALTH CARE
POLICY PAYMENT was included or is on file in the PRIMARY PAYMENT file. If it is not available,
the policyholder is sent a letter requesting the proof. The EOHCB is placed in a PENDING
PROOF file. Claims are automatically purged if they remain in this file for more than 14 days
(a letter is sent to policyholders whose claims have been purged).
If proof is available, another clerk pulls the policyholders policy
record from the POLICY file, records policy and action codes on the EOHCB, and re-files the
policy. At the end of the day, all preprocessed claims are forwarded to Information Systems.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-6

5. The purpose of the GREEN ACRES REAL ESTATE SYSTEM is to assist agents as they sell houses.
Sellers contact the agency, and an agent is assigned to help the seller complete a LISTING
REQUEST. Information about the house and lot taken from that request is stored in a file.
Personal information about the sellers is copied by the agent into a sellers file.
When a buyer contacts the agency, he or she fills out a BUYER
REQUEST. Every two weeks, the agency sends prospective buyers AREA REAL ESTATE LISTINGS
and an ADDRESS CROSS-REFERENCE LISTING containing actual street addresses. Periodically,
the agent will find a particular house that satisfies most or all of a specific buyers
requirements, as indicated in the BUYERS REQUIREMENTS STATEMENT distributed weekly to all
agents. The agent will occasionally photocopy a picture of the house along with vital data
and send the MULTIPLE LISTING STATEMENT (MLS) to the potential buyer.
When the buyer selects a house, he or she fills out a OFFER that is
forwarded through the real estate agency to the seller, who responds with either an OFFER
ACCEPTANCE or a COUNTEROFFER. After an offer is accepted, a PURCHASE AGREEMENT is signed
by all parties. After a PURCHASE AGREEMENT is notarized, the agency sends an APPRAISAL
REQUEST to an appraiser, who appraises the value of the house and lot. The agency also
notifies its finance company with a FINANCING APPLICATION.
EVENT LIST
Trigger (Inputs)

Event Description
Seller enters into agreement
to have agency sell house.

Listing Request

Buyer initiates contact with

agency about buying a home.

Buyer Request

Responses (Outputs)
Create Listing
Create Seller
Area Real Estate Listing
Address Cross-Reference
Multiple Listing Statement
Buyers Requirement
Statement

Buyer makes offer on house.

Offer

Offer Document

Seller accepts buyers offer.

Purchase Agreement

Notarized Purchase
Agreement

Seller makes counteroffer to

seller.

Counteroffer

Counteroffer document

Agency sends a request to a

appraiser to have house
appraised.

Appraisal Request

Appraisal of House report

Agency notifies financial

company of opportunity to
finance house.

Financing Application

Financing Program Offer

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-7

S ig n e d P u r c h a s e A g r e e m e n t

AG ENT

L is t in g R e q u e s t
SELLE R

B u y e r 's R e q u ir e m e n t S t a t e m e n t

B u y e r O ffe r

O ffe r A c c e p ta n c e o r C o u n te r O ffe r

S ig n e d P u r c h a s e A g r e e m e n t
G REEN ACRES
REAL ESTATE
SYSTEM

F in a n c in g A p p lic a t io n

B uyer
R equest

A p p r a is a l
F IN A N C E
C O M PANY

M u lt ip le
L is t in g
S ta te m e n t
A p p r a is a l
R equest

A re a R e a l
E s t a t e L is t in g s &
A d d re s s C ro s s
R e f e r e n c e L is t in g

O ffe r

BU YER

A P P R A IS E R

6. The purpose of the OPEN ROAD INSURANCE SYSTEM is to provide automotive insurance to car
owners. Initially, customers are required to fill out an INSURANCE APPLICATION. A DRIVERS
TRAFFIC RECORD REQUEST is requested from the local police department. Also, a VEHICLE TITLE
AND REGISTRATION is requested from the Bureau of Motor Vehicles. PROPOSED POLICIES are
sent in by various insurance companies who will underwrite those policies based on a
quoted fee. The agent determines the best policy for the type and level of coverage desired
and gives the customer a copy of the INSURANCE POLICY PROPOSAL AND QUOTE. If the customer
accepts, he or she pays the INITIAL PREMIUM and is issued both the policy and a staterequired INSURANCE COVERAGE STATEMENT (a card to be carried at all times when driving a
vehicle). The customer information is now stored. Periodically, a PREMIUM NOTICE is
generated, whichalong with POLICY COVERAGE CHANGESis sent to the customer, who
responds by sending in a PREMIUM after which new INSURANCE COVERAGE STATEMENTS ARE
ISSUED.
Both a vehicle owner and the insurance company are required to provide annual PROOF OF
LIABILITY INSURANCE to the Bureau of Motor Vehicles.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-8

Driver's Traffic Record Request

CUSTOMER

LOCAL
POLICE
DEPARTMENT

Insurance Application
Insurance Policy
Proposal & Quote
(copy)

Driver's
Traffic
Record
OPEN ROAD
INSURANCE
SYSTEM

Premium
Insurance Coverage Statement

Vehicle Title &

Registration Request

Premium Notice & Policy Coverage Changes

Vehicle Title &
Registration
Proposed
Policy

Proof of Liability Insurance

BUREAU
OF
MOTOR
VEHICLES

INSURANCE
COMPANY

Answer continued on next page.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-9

INSURANCE
APPLICATION

New
Application

Applicant
Information

Driver's Traffic Record Request

PROCESS
APPLICATION

LOCAL
POLICE
DEPARTMENT

REQUEST
DRIVER'S
RECORD

Insurance Application

Driver's
Traffic
Record

Applicant
Information

DRIVER
RECORD

Applicant
Driver
Record

CUSTOMER

Vehicle Title &

Registration Request

Initial
Premium

Insurance
Coverage
Statement
& Policy

REQUEST
DRIVER'S
VEHICLE TITLE
&
REGISTRATION

Insurance Policy
Proposal & Quote
(copy)

Applicant
Information

PROCESS
INITIAL
PREMIUM

Driver's
Vehicle Title

Driver's
Vehicle
Registration

VEHICLE
TITLE
VEHICLE
REGISTRATION

Premium
Information

CUSTOMER
POLICY

&
POLICY

New
Customer
Policy
Information

Proof of
Liability
Insurance

Customer
Vehicle
Title &
Registration
Information

CUSTOMER

GENERATE
COVERAGE
STATEMENT

New
Customer
Information

Vehicle Title &

Registration

BUREAU
OF
MOTOR
VEHICLES

Customer &
Policy
Information

GENERATE
COVERAGE
STATEMENT
&
POLICY

Applicant
Information
INSURANCE
APPLICATION

DETERMINE
APPROPRIATE
POLICY

Insurance Policy

POLICY

CUSTOMER
Proposed
Insurance
Policy

CUSTOMER
POLICY

PROCESS
PROPOSED
POLICY

INSURANCE
COMPANY
Proposed
Policy

Answer continued on next page.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-10

CUSTOMER

GENERATE
COVERAGE
STATEMENT

Coverage Statement

Customer
Policy
Information

Premium Notice & Policy

Coverage Changes
Customer
Information
Customer
Information
CUSTOMER
Renewal
Premium

GENERATE
PREMIUM
NOTICE &
POLICY
CHANGES

PROCESS
RENEWAL
PREMIUM

Customer
Policy
Information
CUSTOMER
POLICY
Updated Customer
Policy Information

Updated
Customer
Information

7. Initially, Postal Service trucks bring tax returns to the regional center. The envelopes are
then sorted by type of returnfor example, long form versus short form and whether or not
the envelope contains a payment. The sorted envelopes are sent to Receipt and Control,
where they are further separated into 27 types falling into three general categories: short
forms requesting refunds, long forms requesting refunds, and returns containing tax
payments.
The documents are sorted twice because of the sheer volume of the returns. Its not
unusual for the IRS to receive more than 200,000 returns in one day. The first sort divides
that total to make the job more manageable.
Why so many types? Some returns are requests for extensions for filing. Others are
quarterly estimated tax payments. There are over 500 official government forms for filing
tax returns!
For example, in order to process short forms requesting refunds, operators submit forms
to a machine that scans the returns and stores the data for later processing. The data is
read by the main computer. It determines the correct tax, decides whether a refund should
be sent, updates taxpayers files, and prints letters, notices, liens, etc.
The refund information is sent to the National Computing Center, which subsequently
triggers the Treasury Department to issue the actual refund checks. Letters, notices, and
other communications are sent to local IRS sites around the country, from which
appropriate information is sent to taxpayers.
The processing of long forms requesting refunds is similar, but not identical, to the
processing of the short forms because the long forms usually include multiple schedules of
information, such as itemized deductions. First, returns are sorted into blocks of batches to
be processed as single units. Batches are numbered to ensure that no returns are lost or

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-11

excessively delayed. The batches are then forwarded to examiners. The examiners check for
and correct errors and code the returns for processing.
The examiners send back to the taxpayers any returns with incomplete or uncorrectable
data. Also, clerks stamp a document locator number on each return for additional tracking
capability as the return moves through the system. From this point, the processing is
similar to the short form. Returns are input to the computer system. Data is stored for
subsequent processing. The data is read by the main computer. It determines the correct
tax, decides whether a refund should be sent, updates taxpayers files, selects returns for
possible tax audits, and prints letters, notices, liens, etc. Refund information is sent to the
National Computing Center, which subsequently triggers the Treasury Department to issue
the actual refund checks. Notices and information regarding audits are sent to local IRS
sites around the country, from which appropriate information is sent to taxpayers.
For returns containing tax payments, examiners check for and correct errors, code the
returns for processing, and send back to taxpayers any returns with incomplete or
uncorrectable data. Returns are entered into the computer. The computer checks taxpayer
calculations and amounts, assigns document locator numbers, and stores the data. Then,
the preceding steps are repeated using different operators.
The data from the second operators is checked against the first set for accuracy. Error
reports are sent to examiners. Accurate data is stored for subsequent processing. Checks
are collected for daily deposit into the Federal Reserve Bank.
Examiners check for errors, correcting any errors they can, and write the taxpayers for
any missing information. At this point, the returns follow identical processing as described
for the long forms requesting refunds.
Draw the logical data flow diagram for the physical description.

ANSWER:
The narrative is replete with opportunities for interpretation. Also, we dont know what
details may have been left out or misinterpreted by the author.
To draw the logical DFD, we must effectively strip out the bureaucratic, physical,
implementation details in the narrative. Sorting, routing, duplicate data entry, and other
such details represent the way the system is physically implemented. The following logical
DFD represents one interpretation of the essence of the system.
Note: Like the students, we had to make some assumptions (as noted in parentheses on the
diagram.)
(Continued on next page.]

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-12

id

R e q u e s t f o r L ie n
( a s s u m e d g o v t w o u ld
n e e d to file fo r th is )

N o t ic e s
( p r o b a b ly a c o m p o s it e d a ta f lo w )

( p r o b a b ly )
F e d e ra l
C o u rt

R e c o r d o f n o tic e s o r lie n s
C a lc u la te
Tax
A b b r e v ia te d
Taxpayer
E a r n in g s ,
S ta n d a r d D e d u c tio n s ,
and
W it h h o ld in g s ,
(= s h o rt fo rm d a ta )

E a r n in g s ,
W it h h o ld in g s
( a s s u m p t io n o f n e e d )
A d ju s te d E a r n in g s ,
D e d u c tio n s ,
C r e d it s ,
T axes,
R e fu n d s
( a s u m p tio n o f n e e d )

R e fu n d
A u t h o r iz a t io n

id

Taxpayer

R e fu n d

R e c o rd
of
R e fu n d

Is s u e
R e fu n d

T a x p a y e r R e c o rd s
( p r o b a b ly in lc u d e s W - 2 d a t a )

V a lid a t e d
E a r n in g s
and
D e d u c t io n s

T a x p a y e r E a r n in g s ,
I t e m iz e d D e d u c t io n s ,
B u s in e s s D e d u c t io n s ,
E s tim a te d T a x P a y m e n ts ,
and
W it h h o ld in g s
( = lo n g fo r m d a t a )

id

F e d e ra l
R e s e rv e
Bank

C heck
fo r
E rro rs

R e c o rd o f P a y m e n t
Tax
In v o ic e

T axes
D ue

P aym ent
D e p o s it
P aym ent

D e p o s it

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-13

8. First, notice how cryptic the narrative got. Ironically, the more we tried to clarify the
narrative, the longer the narrative got and the more cryptic it seemed. Obviously, there is
some room for interpretation here, but the following decision table reflects the intended
policy:
Condition A --- the students total score for the first 3 assignments or exams:
A = 90-100
B = 80-89
C = 70-79
D = 60-69
F = 0-59
Condition B --- the students score for the fourth assignment
P = 70-100
N = 0-69
Condition C --- number of absences
A = 0-3
U = 3+

10

11

12

13

14

15

16

17

18

19

20

Cond A

Cond B

Cond C

Grade A

Grade B

X
X

Grade C

X
X

Grade D

X
X

Grade F

There are no undefined rules in this grading policy. Had there been undefined rules in this
policy, those rules would have represented grading loopholes that could be used against the
instructor. The instructor would need to determine how to handle those rules or make it
impossible for that combination of conditions to occur. The simplified decision table follows:

10

Cond A

--

Cond B

Cond C

--

--

Grade A

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

Grade B
Grade C

9-14

X
X

X
X

Grade D

X
X

Grade F

9. The answer to the poker chip problem is illustrated in the following decision table.

Joe

1
W

2
W

3
W

4
W

5
B

6
B

7
B

8
B

Gordon

Susan

W
B

Impossiblethe were only two WHITE

chips

W
B

Seeing both WHITE chips, Joe would

have known his was BLACK.
Obviously, he did not see this.
Seeing both WHITE chips, Gordon
would have known his was BLACK.
Obviously he did not see this.

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.

Process Modeling

9-15

Because Susan requested her

blindfold NOT be removed, we
could not evaluate this rule;
therefore, it is still POSSIBLE

This is the critical rule! By

eliminating the possibility
of this rule (which would
have meant her chip was
WHITE, Susan knew her
chip was BLACK because
all of these remaining rules result
in an answer of BLACK! Thats why
Susan was absolutely certain her
chip was BLACK.

?
?

So how did Susan eliminate Rule 7 as a possibility? Because neither Joe nor Gordon could
have seen two WHITE chips, hers could not possibly be WHITE. Thus, because all
remaining combinations result in her chip being BLACK, it must be BLACK!

Copyright 2004 by McGraw-Hill Companies, Inc. All rights reserved.