HOUR 3Relating to ModernDatabases

You have spent the last two hours getting a good introduction to the conceptof “database.” Hour 1, “What Is a Database?” reviewed some of the basics,such as why we have databases, ways in which databases are used, and howthe large volumes of data are used and refined to help those in businessmake informed decisions. In Hour 2, “History and Evolution of DatabaseEnvironments,” you learned some of the different ways in which the han-dling of data has evolved from a data management perspective and thehardware architectures typically used to handle databases. Now that thefoundation has been covered and you have a clearer concept of what a data-base is, it’s time to look at some reality-based systems that use databases.In this hour, you will look at a few common examples of database usageand take a closer look at the way data is managed and stored within thesedatabases.

The first example studies the process of purchasing from a popular Webretailer. Another takes a look at a practice that has had some share ofcontroversy—file content sharing. Other examples may not appear to be as

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technology intensive as the first two, but as you take a closer look at getting a prescrip-tion filled and using an ATM (automated teller machine), you will see that databases playan integral part in those systems as well.

By the end of this hour, you should have a clearer understanding of where databases areused in normal daily activities and transactions, from shopping to banking to retail pur-chases, whether in a conventional bricks-and-mortar store location or on the Net.

Using the InternetThe proliferation of home-based computing, along with Internet access from work loca-tions, has fueled an exponential growth of World Wide Web (WWW) sites and users. Asthis growth occurs, the number of retailers offering their goods and services via theInternet has skyrocketed. The types of companies with Internet presence represent a widevariety of domestic and international business entities. Familiar brick-and-mortar retail-ers, although well established and usually well financed, have not necessarily dominatedthe Internet retail landscape. Some of the most frequently purchased items on the Netinclude books, videos, and CDs. Amazon.com, a well-known company dominating thismarket sector, is the subject of the first example. The Internet is becoming a thrivingenvironment for modern databases.

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The intent of this hour is to identify common real-world databases to whichwe all can relate. In subsequent hours, we will discuss in more detail theelements that comprise databases such as those discussed in this hour.

Making a Book PurchaseOur first example involves a common real-world database that many of us have used;Amazon.com. If you have never visited the Amazon.com Web site, you can reach it byentering http://www.amazon.com into the location bar of your browser and clicking Go.Figure 3.1 shows an example of the Amazon.com home page.

Because the number of items in the Amazon.com database is so large, broad product cat-egories are presented on the left side of the Web page. Choosing a product category helpsto narrow the number of items within the database that will eventually be viewed. Forthis example, select the Books category. Then you are presented with another list ofproducts, all book categories. Figure 3.2 shows how you can drill down into the Bookscategory.

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As you survey the content on the second page, you can begin to get a feel for the exten-sive database that must be in use behind the scenes at Amazon.com.

The right side of the page shows the bestsellers based on an hourly recomputation. Tocalculate this bestseller list, a sales history database (probably tracking sales transactionsby customer number and by ISBN) must be searched. The top 10 selling ISBN numbers

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FIGURE 3.1Amazon.com homepage.

FIGURE 3.2Limiting your interestto books.

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are returned. These top-selling ISBN numbers are then used to retrieve the book titles,authors, and other book information that is presented on the Web page in tabular format.

The left side of the page has a column of book categories. This implies that the databaseof books available is still too large to simply scroll through all the selections. The Website enables you to further limit your search of the book database by category of books.In this example, when you pick the Computer and Internet category, a subsequent page isdisplayed, enabling you to continue to “drill down.” After you have narrowed the selec-tion of books from the database to a small electronic “shelf” area, you can browse theshelf for the book of your choice.

As an alternative, the entire database of books can be searched from the home page.Indexing of the database allows the user to quickly identify books of interest by author,by title, or by topic.

The database also has editor reviews, customer reviews, inventory availability data, andpricing information for each book.

If you find the book you want and decide to make the purchase, a customer databaserecord is retrieved to find the customer name, address, city, state, zip, and phone number.Most often, when making an online purchase, your email address is also requested sothat order confirmation and shipping advice information can be conveyed to you elec-tronically. If the information is not found in the database, a series of screens will be pre-sented for you to provide the needed data to populate your customer record.

Now that Amazon.com can identify you as the customer, and you have selected thebooks you want to buy, it’s time to take your electronic shopping cart to the checkoutline. This process fills some database table(s) with sales information. Beginning withyour customer number, Amazon.com needs to determine your shipping address. If youare a repeat customer, your previously used shipping address is retrieved from the data-base and displayed for you. If this isn’t the address to which the order is to be shipped,new Ship To address information must be entered and tracked in the database specificallyrelated to this order. Hour 2 discussed the concept of a relational model database. Yourtrip to Amazon.com builds relational database entries about you and your order. Figure3.3 shows the page where this data is stored in the database.

After Amazon.com knows where the order is going to be shipped, the method of pay-ment must be specified. The ordering system asks you to indicate which credit card youwill be using. After indicating card choice, the credit card number and expiration date isentered along with the exact cardholder name. The credit card information you provide isthen verified by using another database to ensure the card’s validity. Figure 3.4 illustratesthe payment process.

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After the credit card information is provided and verified, the Amazon.com system sub-mits your credit card information along with your order’s total value to a credit card ser-vicing authority. The credit card company validates your card number against itsdatabase, checks the credit limit and available credit amount, and determines whether thesale can be approved. After the credit card company records your purchase details into itsdatabase, the sale authorization number is returned to Amazon.com where it is recorded

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FIGURE 3.3Shipping data for yourorder.

FIGURE 3.4Paying for your order.

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into your sales transaction record. Now Amazon.com has recorded several data items intoyour customer record: billing data, shipping data, book ISBN and quantities, credit carddata, and purchase authorization number.

The sale transaction data is then used in several ways behind the scenes. Minimally, thesale transaction has to be used to update the inventory on the books and items that havebeen shipped. This triggers activity for the purchasing group, which must reference thesupplier database for minimum order quantity, shipping costs, and book costs to deter-mine an economic order quantity and place an order for inventory replenishment. Thispurchase order database is used to check inventory receipts at the time the books arereceived into their warehouse from the publisher or distributor.

Finally, the sale transaction will be used periodically in a forecasting model database todetermine buying trends, seasonality factors, and beta factors. These factors are all deter-mined by evaluating the sales transaction database over a long period of time. The pur-chasing and inventory control groups within a company will use these predictiveforecasting quantities to adjust inventory levels and inventory dollar investments to opti-mize a minimization of inventory dollars and maximization of customer serviceability.

The database at Amazon.com also displays other book titles in which you may have aninterest. The database has association rules, like identifiable trends, where users inter-ested in book A have demonstrated an interest in books B and C and also have shown aninterest in books from author D. This data, more complex in nature than simply a list ofbooks in the database, is derived by evaluating large volumes of historical data by user,by author, or by title. Figure 3.5 shows the results of the historical data for trends.

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FIGURE 3.5Suggested buyingtrends.

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Downloading Information from the InternetA wide variety of file content sites on the Net enable you to download anything fromwhite papers and articles of interest, screensavers, software packages, games, movies,and music. The most publicized site may be Napster.com, with all the legal battles andcourt injunctions, but the site you will look at is called Kazaa.com. Kazaa.com providesfree software to search its databases and to download files. If you have not visited thesite, enter www.kazaa.com into your browser and click Go. Figure 3.6 shows an exampleof the Kazaa.com home page.

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FIGURE 3.6Kazaa.com home page.

The navigational aids on this site are similar to those at Amazon.com. The database ofavailable music is too large for a user to browse through the available titles, so the siteenables you to begin your search within a category, such as Top 40, Jazz, Country, orRock/Pop. These categories are essentially subsets of all song titles in the database. Thedatabase can also be segmented using other qualifiers, such as by artist or by album.

When a particular file is identified to download, another database is searched to deter-mine which connected users have your file available for download. You will typicallyhave a chance to view the sources of your file, connection speeds, and file size. After thesource is picked, a peer-to-peer transfer from the source PC to your PC occurs. Figure3.7 shows all the peers identified for your file download.

If you are after a particular type of file, you can narrow your search of the database toinclude only one type. Kazaa.com supports searches for audio, video, images, docu-ments, and software.

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Many times, you can find other files from the database that have something in commonwith a file you have already downloaded. For instance, you can find files from the sameartist or author (audio, image, documents), from the same album (audio), and from thesame publisher (video, software) .

Everyday TransactionsMost of us use databases daily and may not realize it. The following sections describe afew everyday situations in which people access and utilize data from a database. Byunderstanding real-world, daily activities, you will gain a better understanding of databaseusage and will be able to better apply these concepts to understand the corporate world.

A couple of everyday transactions with which everyone is familiar are

• Getting a prescription filled

• Using a bank machine

Getting a Prescription FilledThe next example walks you through a process everyone does at some point—having aprescription filled.

As you are standing in your local pharmacy waiting for your prescription, you may notthink that this transaction is database intensive. But, if you were to take a closer look,hundreds of gigabytes of data, maybe terabytes, are involved in this routine transaction.

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FIGURE 3.7Sources for your file.

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When you evaluate a transaction like this one, it is helpful to look at one layer of thetransaction at a time, peeling away successive layers, just like peeling an onion.Figure 3.8 shows the “layers” of this transaction that you will review.

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Doctor OfficeDatabase

Layer

PharmacyDatabase

Layer

WholesalerDatabase

Layer

ManufacturerDatabase

Layer

FIGURE 3.8Transaction layersfor a prescriptionpurchase.

The Doctor’s Office DatabasesYou can start by looking back to the beginning of this transaction—at the doctor’s office.A database must be kept of each patient, including data elements such as name, address,phone number, insurance carrier, closest relative, medical history, and family history.Billing records, payment receipts, appointment schedules, and insurance filing informa-tion make up other databases that are used often.

The Pharmacy DatabasesThe actual pharmacy has database information that it maintains on a broad range of sub-jects. The most obvious one is you—the customer. Every pharmacy will have, minimally,a database of customer name and address information, customer date of birth, prescribingphysician and phone number, insurance carrier, and past prescription history of eachcustomer.

The insurance company, HMO, or PPO provides each pharmacy with another databasethat must be used extensively. This database is called the formulary database. It containsan approved list of brand drugs, approved generic substitutions, dosages, and NationalDrug Code (NDC) information. Your insurance prescription card more than likely has aspecific formulary that the pharmacy must reference to ensure that the drug used to fillyour prescription, or an allowable substitution, will be covered by your insurance. Thistype of database may also be used by the physician’s office to ensure that the drug theywant to prescribe can be filled, without any substitution or dosage change, when you getto the pharmacy.

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Another database that is used prior to filling the prescription is the drug interaction data-base. The prescribed drug may have serious interaction issues if used in conjunction withmedications currently in use. The database identifies potential interaction problems,provides a detailed explanation of the interaction consequence, and possibly suggestsalternatives.

After the formulary and interaction databases have been utilized, the prescription is readyto fill. The pharmacy inventory database is checked to determine whether the NDC beingrequested is in stock and at what shelf location it can be found. The inventory databasemust track expiration dates of each drug to prevent outdated medication from being dis-pensed. After the prescription is filled, the available on-hand inventory for your medica-tion must be reduced by the quantity or volume of your prescription.

If the medication is not available in stock, the pharmacy must search through its whole-saler database to determine the best source for the drug. The wholesaler database identi-fies each of the wholesalers from whom the needed drug can be acquired, the cost fromthe wholesaler, and possibly the inventory availability at the wholesaler.

The final database to be reviewed at the pharmacy is the order database. This databasecontains all the outstanding orders that have been placed with all the wholesalers. Theymay represent simple inventory replenishment orders or special orders for drugs not nor-mally stocked. If the orders are for narcotic items, or Schedule 2 drugs, special order andtracking requirements must be met to satisfy the requirements of the Drug EnforcementAdministration (DEA). Figure 3.9 shows the database entities involved at the pharmacylayer.

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Formulary

Orders

Wholesalers

Inventory

Customer

Drug Interactions

FIGURE 3.9Pharmacy layerdatabases.

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The Wholesaler’s DatabaseAs you continue to peel away layers in the transaction, you see that the next layer repre-sents the drug wholesaler. The pharmaceutical supply chain in the United States is typi-cally serviced by a wholesaler that operates between the manufacturer and the retail orhospital pharmacy.

The wholesaler layer begins with an extensive customer database. Name, address, billingaddress, and accounts receivable information are maintained. A customer who representsa large chain, such as K-Mart, may have Ship To destinations all over the country. Eachof the Ship To locations must be maintained separately for order tracking and for salesanalysis purposes.

A separate database that identifies every drug and strength is used by the wholesaler toensure that the customer’s intent on which drug they want to purchase from the whole-saler is clear and, in turn, to make sure the drug the wholesaler purchases from the manu-facturer is explicitly identified. This database, by NDC number, changes frequently withnew manufacturers, generic suppliers, dosage changes, and the constant introduction ofnew drugs. The management of this type of database has spawned new businesses in thepharmaceutical industry because of its complexity and volatility. Many wholesalers pur-chase this database with quarterly updates to ensure that they have an up-to-date NDCdatabase.

Most national and regional wholesalers have multiple distribution centers, or DCs,located throughout the country or throughout the geographical area they serve. Each ofthese DCs has an inventory database that is a focal point of their operations. The inven-tory database must identify each item that the DC stocks, and for each item, many inven-tory management attributes are tracked. Something as simple as the picking location caninclude a forward picking location, a backup picking location, a bulk location, a backupbulk location, packaging quantities, packaging dimensions, packaging weights, expirationdates, and lot-tracking information along with inventory quantities at each location. Withthousands of items at a DC, you can begin to see the complexity and size of the inven-tory database required for each DC within a wholesaler’s operation.

The wholesaler’s database will always include, among other items, a shipping and invoic-ing database and an accounts receivable database. Figure 3.10 shows the database entitiesinvolved at the wholesaler layer.

The Manufacturer’s DatabaseA manufacturer has many databases that are very similar to those of the wholesalers. Thesupply-chain relationship between pharmacy and wholesaler is very similar to the rela-tionship between wholesaler and manufacturer. There are a few additional databases,though, that are unique to the manufacturing process.

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The first unique database you will look at in this layer of the transaction is the productdatabase. The product must contain a list of raw materials, or recipe ingredients, thatmake up the product. Careful attention must also be given to the manufacturing process.The FDA (Food and Drug Administration) expects every manufacturer to stringentlyadhere to the recommended process to produce the drug. The database has extensiveinstructions and quality control data for each step within the routing or operational stepsin the manufacturing process.

The other database that is unique to the manufacturer in this transaction is one that tracksthe capacity of each manufacturing process. Whether it is a material movement opera-tion, a mixing operation, an application of heat, or a packaging operation, each operationhas a finite limitation in terms of hours available and capacity. A complex database isrequired to look at all the scheduled shop orders, retrieving the lot size of each order,multiplying the shop order quantity by the routing quantity, and then determining thework center or material-handling equipment necessary to complete the operation. Each ofthese extended routing operations are aggregated by work center and compared to thefinite limitations noted earlier. The required due dates of the shop orders are used as astarting point, and the entire process is backward scheduled to determine when the shoporder would need to begin to meet the required completion date. When you factor inscheduled and unscheduled maintenance, breakdowns, and required setups and qualityinspections, the database necessary to adequately evaluate capacity requirements andmaterial requirements planning is significant. Figure 3.11 shows the database entitiesinvolved at the manufacturer layer.

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Inventory

Invoices

Orders Manufac-turer

NDC

Customer

Ship toLocations

FIGURE 3.10Wholesaler layerdatabases.

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Using Your Bank MachineThe next example involves a transaction that takes only a few minutes to complete—youare going to look at the databases that are used when you visit a bank and use the ATM.

Don’t let the quickness of the transaction fool you—the databases are busy whenever youwalk up to use the ATM! You will look at the account database and the financial transac-tion database in a cash withdrawal example.

When you insert your ATM card into the bank machine, the first thing that must be com-pleted is to identify the account number of the user. The user may be using a local bankor may be using another bank that is part of a participating network. The bank mustsearch its account databases and try to find a match within their system. If this fails, theaccount number can be searched against a database that represents participating banks.

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Query inven-tory master

for itemdescriptions

Query ASNtable for item

on pallet

Format reportand print

report

Scan parallelbar-code

Prepare POtransaction forEDI interface

Determine economic orderquantities and

backorder posi-tion by item

Update openPO table

Tran | changed pur-chase orders

to vendors

Inner I data into A/P receipt is

table

Interface to inventory

receipts table

Generated directed

Query vendormaster for

vendor name

Interface Into related

database tables

Update on hand inventory

quantity for items

FIGURE 3.11Manufacturer layerdatabases.

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After an account record is identified, the user is prompted for a PIN, or personal identifi-cation number. The PIN is verified against a database entry. The transaction, for obviousreasons, is canceled if the user does not supply a matching PIN.

After the PIN verification is completed, the account details are retrieved from the databaseregarding the types of accounts that you have—checking, savings, or both. The ATMprompts you for the type of transaction you are interested in completing. Typical transac-tions are deposits, withdrawals, transfer savings to checking, and check account balances.For this transaction, you are going to withdraw cash from your checking account.

Now it’s time for you to indicate how much cash you need. A couple of databases mustbe accessed at this point. The first is easy—determine how much money you currentlyhave in your account. The second is more involved because most ATM systems limityour withdrawal amounts in a 24-hour period. The system issues a SQL select statementagainst the database to add the transaction amounts of all withdrawal transactions foryour account within the most recent 24 hours. If the daily limit minus the returnedsummed amount is greater than your transaction amount, you get the cash. If not, youwill be limited as to how much can be withdrawn, or you may not qualify to receiveany cash.

Beyond the portion of the transaction that you see, a couple more databases are beingused. The transaction must be recorded, with account number, account type (savings orchecking), date, time of day, type of transaction, and amount. This is used to post thetransaction to your account and compute your current balance. This is the database oftransactions that you see on your statement at the end of your banking period. The trans-action is also used to post to the general ledger database for the bank. If any ATMcharges apply, these annoying charges are recorded in the transaction database describedpreviously.

The final database is composed of ACH (Automated Clearinghouse) transactions that areforwarded to the Federal Reserve System so that banks can clear transactions across thecountry. Each of these transactions are logged to a transaction database for reconciliationpurposes in the event of a failure within banking computer systems.

Nontechnology DatabasesYou commonly use a number of database-related sources of information in the course ofyour daily life that you might not readily recognize as databases.

The most common of these is the phone book. It is nothing more than a printed versionof a customer and business database that contains names, addresses, and phone numbers.The printed version is organized by last name for easier retrieval of records from thedatabase.

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The second example is an item you have used since you were in grade school—the dic-tionary. Each “database” entry in the dictionary contains a number of pertinent items.Besides the correct spelling, it contains pronunciation guides, syllable indications, partsof speech category (noun, verb, and so on), and examples of the word used as differentparts of speech.

SummaryYou have spent this hour taking a look at a number of transactions that utilize databasesin a variety of ways.

The Internet examples of purchasing a book from Amazon.com and downloading a filefrom Kazaa.com were, by the very nature of the transaction, database intensive. In fact,since the Internet is only a digital interaction, it must be database intensive. When youcompare the Net to walking into a brick-and-mortar store where you are surrounded by athree-dimensional store with aisles, shelves, and products that you can see, touch, try on,and listen to, the Net has to have a more extensive relational database for its productsjust to compete! The amount of data that it can lead you to and present to you is a keydeterminant in the online store’s success in completing the sales interaction.

The everyday brick-and-mortar transactions you reviewed—getting a prescription filledand using an ATM—were also database intensive. You evaluated each transaction, muchlike peeling an onion, one layer at a time. Each successive layer had some similar data-base requirements and some that were unique to their layer within the supply chain.

Finally, you looked at a few examples of activities that you’ve done for years withouteven realizing that a database was being used—using a phone book and looking some-thing up in the dictionary.

Hopefully, now that you’ve finished your look around at some common “transactions,”you have a better appreciation for how extensively you use databases.

WorkshopThe following workshop is composed of quiz questions and practical exercises. The quizquestions are designed to test your overall understanding of the current material. Thepractical exercises are intended to afford you the opportunity to apply the concepts dis-cussed during the current hour, as well as build on the knowledge acquired in previoushours of study. Please take time to complete this workshop before continuing. You canrefer to the answers at the end of the hour.

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Quiz1. Databases are used only in transactions you complete on the PC and on the

Internet. (True or False)

2. A simple transaction such as getting a prescription filled probably requires, whenyou consider several layers of the transaction, how much data storage?

a. 5,000 bytes

b. 50,000 bytes

c. 5 megabytes

d. 500 megabytes

3. Every transaction will have a unique set of database requirements. (True or False)

4. A database is best used to support which type of data? Choose all that apply.

a. Static current data

b. Dynamic current data

c. Static historical data

d. Dynamic historical data

5. When particular records or rows from the database are needed, what is used toretrieve them?

a. ATM

b. NDC

c. SQL

d. ACH

Exercises1. Find five databases you can search on the Internet.

2. You will probably visit a retailer, such as Wal-Mart, K-Mart or a grocery store,within the next few days. Identify two or three databases that are in use when yougo through the checkout.

Answers to Quiz1. False. Databases are used in almost every transaction that you conduct. Everything

from buying milk at the grocery, to checking out a book at the library, to gettingyour car serviced requires the use of many different databases at several layers ofthe transaction.

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2. d. When you take into consideration all the different layers within the supply chain,the answer is probably much greater than 500 megabytes.

3. False. Many of the examples had a customer database with name, address, city,state, and zip. There are many similarities in the database requirements in theexamples presented in this hour and in most transactions that you conduct daily.

4. a, b, and c. A database can support current data, both static in nature, such as cus-tomer name and address, and dynamic in nature, such as inventory on hand valuesthat may change from minute to minute. A database, usually referred to as a datawarehouse, is a good example of static historical data. Dynamic historical data can-not exist; dynamic and historical would be, by definition, mutually exclusiveevents.

5. c. ATM stands for automated teller machine. NDC stands for National Drug Code.ACH stands for Automated Clearinghouse. Answer c, SQL, stands for StructuredQuery Language, which is the standard for retrieving data from a relationaldatabase.

Answers to Exercises1. If you start your browser at Yahoo and do a search on “databases” you get 7,691

hits! Film, software, the U.S. Patent Office, medical, and movies are five thatappear on the first page.

2. The one that is most obvious is when the cashier scans your item. A database isused, by UPC (Universal Product Code), that uniquely identifies every item. Therecord is retrieved to determine the current retail price.

A second database is in use that captures the UPC and quantities of every sale andis used as a point-of-sale inventory replenishment system. This database is used toautomatically generate orders to the retailer’s distribution center to refill theshelves.

A third database may be in use if you are going to pay with check or credit card.Your checking account must be checked against a master database to ensure thatyou do not have any checks outstanding that have been returned for NSF (non-sufficient funds). It will also check against a database that adds the dollar amountof checks you have written within any 24-hour period. Limitations are establishedthat require a manager’s approval, as a “stop loss” measure in the event someone istrying to pass bogus checks.

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