The REA model is a type of relational database and it is used to identify relationships between different sets of data. The information is presented in a way that allows key personnel to identify potential problems and to plan for the future. The REA model breaks down data and classifies it into three different categories; resources, events and agents.
Resources considered to be things that have an economic value to the organization, this includes cash, inventory, equipment and employees. Events are business transactions, this includes the purchase and sale of inventory that are planned, executed and are can be used for future planning or control purposes. Lastly, agents are the people involved in the event. Agents can consist of individuals, vendors and other departments within a company. For example, when you buy food at the grocery store, you are the external agent and the cashier is the internal agent because he/she is authorized to sell/distribute merchandise from that store. An example of a vendor being the external agent would be a representative from Frito Lay would deliver chips to the grocery store, the manager would be considered the internal agent. Finally, an auto body shop has different departments that complete different parts of the project. For example, the sales rep would offer a quote to the customer, when the customer accepts the terms the vehicle would be taken into the shop and the information would be transferred
