Chapter 3 - The REA enterprise ontology: Value system and value chain modeling. The objectives of this chapter are to describe the components of a typical enterprise's value system and value chain and to discuss the procedures for developing models of enterprise value systems and value chains. | Chapter 3 The REA Enterprise Ontology: Value System and Value Chain Modeling Chapter Learning Objectives Identify enterprise external business partners Identify resources exchanged between an enterprise and its business partners Develop value system level REA models Identify enterprise business processes (transaction cycles) Identify the resource flows between an enterprise’s internal business processes Identify the economic events that cause the resource flows between an enterprise’s internal business processes Develop a value chain level REA models 3- Porter’s Value Chain Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985). Margin Costs Revenue Support Activities Primary Activities Firm Infrastructure Human Resource Management Technology development Procurement Inbound logistics Operations Outbound logistics Marketing & Sales Service 3- Porter’s Value Chain Primary value activities Inbound logistics - activities associated with receiving, storing, and disseminating inputs to the products or services Operations- activities associated with transforming inputs into the final products or services Outbound logistics - activities associated with collecting, storing, and physically distributing the products or services Marketing and sales - activities associated with providing a means by which customers can buy produce and the means for inducing them to buy Service - activities associated with providing service to enhance or maintain the value of the products or services 3- Porter’s Value Chain Support value activities Procurement - the function of purchasing inputs to firms value chain Technology Development - the know-how, procedures, or technology embedded in processes that are intended to improve the product, services, and/or process Human Resource Management - activities involved in recruiting, hiring, training, developing, and compensating all types of personnel Firm Infrastructure - . | Chapter 3 The REA Enterprise Ontology: Value System and Value Chain Modeling Chapter Learning Objectives Identify enterprise external business partners Identify resources exchanged between an enterprise and its business partners Develop value system level REA models Identify enterprise business processes (transaction cycles) Identify the resource flows between an enterprise’s internal business processes Identify the economic events that cause the resource flows between an enterprise’s internal business processes Develop a value chain level REA models 3- Porter’s Value Chain Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985). Margin Costs Revenue Support Activities Primary Activities Firm Infrastructure Human Resource Management Technology development Procurement Inbound logistics Operations Outbound logistics Marketing & Sales Service 3- Porter’s Value Chain Primary value activities Inbound logistics - activities .
