Question

Background:

Baer Belly Bikinis Inc. (BBB) is a small business located in Santa Monica, California. It sells swimwear and related products to specialty stores throughout the United States. It also sells its products to individuals over a company website. Paige Baer founded BBB almost 10 years ago after she graduated from the Fashion Institute of Design and Merchandising. She recognized the need for swimsuits sold as separates. Her business has grown rapidly, and now BBB has a large following of customers who want to be able to mix and match to find their ideal swimsuit. Currently, BBB products are carried in more than 1,000 specialty swimwear boutiques and online retailers.

During an initial interview with Paige Baer, she outlined BBB’s business processes. She acknowledged that she doesn’t know much about accounting and information technology. As the business grew, her accounting suffered and information systems were added piecemeal. So, she is looking forward to an assessment of her requirements and recommendations that would position BBB for substantial further growth.

This case examines BBB purchases of fabric. BBB’s production staff selects the fabric and materials for the swimsuits. This case also examines BBB purchases of and miscellaneous supplies and services.

BBB Purchases of Fabric
BBB works closely with local fabric vendors to determine the color themes for each season’s products. When BBB has received enough orders from the retailer customers to estimate the quantity of swimsuits and products to manufacture, BBB then orders the required quantities of fabric and related materials from the fabric vendors. BBB pays each fabric vendor at the end of the month for all purchases during the month. For each fabric order, there is one receipt. For each receipt of fabric, there is one order. Consequently, the order and purchases (receipts) can be modeled as one event.

Details of the Fabric Purchase Process
1. The Production supervisor places an order for fabric according to internal estimates of production quantities (the estimates are not part of the project).
2. Fabric vendors ship fabric in bulk to BBB usually within 2 weeks of the order.
3. A Shipping and Warehouse employee receives the bulk fabric and verifies quantities received.

BBB Miscellaneous Purchases
BBB also purchases miscellaneous services and supplies, such as electricity, water, sewage, garbage, phone, and janitorial services. It also pays monthly rent on the building, purchases office supplies, hires photo shoot models and photographers, and so on. BBB pays its miscellaneous suppliers at the end of the month for all purchases during the month.

BBB Cash Disbursements
BBB assigns sequential numbers to each check issued. All checks for purchases (both fabric and miscellaneous) are written on its main bank account.

Exercise Requirements

1. Based on the preceding information and the following attributes list, prepare a UML class model and corresponding table listing describing BBB’s purchases and payments process. List the tables in the following order: resources, events, agents, type images, and linking tables. Identify the primary keys and foreign keys in each table. Prepare a second UML model that combines the fabric and miscellaneous purchases events and the fabric and miscellaneous vendor agents. Show how you might model a way to differentiate among the types of vendors. Click hereto access the Attribute Listing for BBB to be used for this exercise.

Answer 1

Berkeley should choose a business structure such as a sole proprietorship for simplicity and control, or an LLC for limited personal liability and simpler taxation, based on her comfort with risk and business growth plans.

Step-by-step explanation:

When Berkeley is considering opening a new retail business, she has several business structures to choose from, each with its own benefits and drawbacks. The key options include a sole proprietorship, partnership, corporation, and limited liability company (LLC). As an entrepreneur, Berkeley's choice will depend on the level of risk she's willing to take, the control she wishes to maintain, tax implications, and the ability to raise capital.

A sole proprietorship is the simplest and requires the least paperwork. It's best for entrepreneurs who want full control and are ready to take personal financial responsibility for the business. A partnership is suitable when she plans to operate with one or more partners and is willing to share decision-making and profits. A corporation is more complex and better for those who plan to raise significant capital, offering the advantage of limited liability but at the expense of greater regulation. Lastly, an LLC provides a blend of the corporate structure's limited liability and the simpler tax setup of sole proprietorships and partnerships.

Given Berkeley is an entrepreneur, she might favor a structure that allows flexibility and minimal complexity, such as a sole proprietorship or an LLC, depending on her willingness to take on personal liability and her plans for growing the business.