Concepts

Bob Haugen edited this page Sep 23, 2013 · 9 revisions

The concepts in the valuenetwork valueaccounting app are based on the REA economic model.

REA stands for Resource, Events and Agents. You can read about it on the inventor's website.

REA was originally designed in 1982 for internal accounting in a single company. However, in the 1990's it was expanded to cover economic interactions among many companies in supply chains, and now in value networks.

This wiki page is a bare beginning of documenting the REA concepts, how they are used in the valueaccounting app, and how they are applied by real value networks like SENSORICA.

We will first deal with the three levels on which the REA model works: Types, Plans and Events.

Here's an overview of the REA levels, as used in the Value Network software: REA levels Economic Resource Types are definitions of resources. For example, the definition of a product, like the definition of a SENSORICA sensor. (See also Resource Types vs Resources.)

Projects are a SENSORICA addition to the concepts. A Project is a context for Process Types all of their connections (Resource Types, Processes, Events). In other words, a Project is a context in which things are defined, planned and happen.

An Economic Resource is an instance of a type: for example, one usable, tangible sensor.

An Economic Event is a change in the quantity or ownership of an Economic Resource performed by Economic Agents (for example, the production or sale of a SENSORICA sensor). Each of those events would be defined by an Event Type (production or sale).

The Plans level contains Commitments, which are promises for events that have not happened. The Plans level will also contain schedules, orders, etc.

Processes straddle the boundary between the Plan and Event levels. On the Plan level, they have input and output Commitments. On the Event level, they have input and output Events.

Recipes combine a lot of the concepts.

recipe

A Recipe is a structure that lives at the Type level. If you are familiar with ERP systems, a Recipe is like a combined Bill of Material and Routing.

When SENSORICA gets a commitment from a customer for product delivery, the Recipe will be used to generate manufacturing process schedules, commitments that members can take for making the required products, requirements to suppliers for the required components, etc.

Then the participants will perform the actual manufacturing events, which will produce the products for the customer.