Demonstration of hierarchical queries in Postgres using a materialized path. It will create a new database that you can later play around with.

Gemfile

source 'https://rubygems.org'
gem 'activerecord', '4.0.0.rc1'

hierarchy_with_activerecord.rb

require 'active_record'

# Run the sample hierarchy_with_postgres.sql file first
#   psql < hierarchy_with_postgres.sql
# 
# Normally you would use a migration, and configure this in database.yml, but
# this is just a little sample.

ActiveRecord::Base.establish_connection :adapter  => 'postgresql',
                                        :database => 'hierarchy_with_postgres',
                                        :host     => 'localhost'

class Employee < ActiveRecord::Base  
  def depth
    path.length
  end
  
  def full_path
    path + [id]
  end
  
  def parents
    Employee.find(path)
  end
  
  def children
    Employee.where('path && ARRAY[?]', id)
  end
  
  def move!(new_parent)
    if new_parent.path.include?(id)
      throw ArgumentError "Cannot move under a child record"
    end
    
    Employee.transaction do
      new_path = new_parent.full_path
    
      children.update_all [
        'path = ARRAY[:new_path] || path[:depth + 1 : array_length(path,1)]',
        new_path: new_path,
        depth: depth
      ]
    
      self.path = new_path
      self.save!
    end
    
  end
  
  def to_s
    "#{name} (#{id})"
  end
end

# Sample script to play around with the hierarchy:
if $0 == __FILE__
  def display_tree
    tree = Employee.order('path || id')
    tree.each{|e| puts("  " * e.depth + e.to_s) }
  end
  
  def display_employee(id)
    employee = Employee.find(id)
    depth    = employee.depth
    parents  = employee.parents.join(', ')
    children = employee.children.join(', ')
  
    puts "#{employee}"
    puts "Depth:    #{depth}"
    puts "Parents:  #{parents}"
    puts "Children: #{children}"
  end
  
  def move_employee(id, new_parent_id)
    employee = Employee.find(id)
    parent   = Employee.find(new_parent_id)
    
    employee.move!(parent)
    display_tree
  end
  
  case ARGV.length
    when 0 then display_tree
    when 1 then display_employee ARGV.shift
    when 2 then move_employee    ARGV.shift, ARGV.shift
  else
    puts <<-HELP
      ruby #{$0}
        Print Tree
      ruby #{$0} id
        Print Employee `id`
      ruby #{$0} id new_parent_id
        Move Employee `id` under `new_parent_id`
    HELP
    
    exit 1
  end

end

hierarchy_with_postgres.sql

DROP DATABASE IF EXISTS hierarchy_with_postgres;
CREATE DATABASE hierarchy_with_postgres;

-- Now use hierarchy_with_postgres
\c hierarchy_with_postgres

CREATE TABLE employees (
    id        integer primary key,
    path      integer[],
    name      text
);


-- id | name
-----------------------------
-- 1  | Harold
-- 2  |   Arthur
-- 3  |     Alice
-- 4  |       Rose
-- 5  |     Bob
-- 6  |   Sally
-- 7  |     Mortimer
-- 8  |     Penny
INSERT INTO employees VALUES 
(1, ARRAY[1],        'Harold'),
(2, ARRAY[1,2],      'Arthur'),
(3, ARRAY[1,2,3],    'Alice'),
(4, ARRAY[1,2,3,4],  'Rose'),
(5, ARRAY[1,2,5],    'Bob'),
(6, ARRAY[1,6],      'Sally'),
(7, ARRAY[1,6,7],    'Mortimer'),
(8, ARRAY[1,6,8],    'Penny');

-- Find the top 2 levels of the company
SELECT id, name, path, array_length(path,1) as depth
FROM employees 
WHERE array_length(path,1) <= 2;

-- Find who works for Arthur
SELECT id, name, path FROM employees
WHERE path && ARRAY[2];

-- Find who Alice works under
SELECT id, name, path FROM employees
WHERE ARRAY[id] && ARRAY[1,2,3];

-- Move Alice under Mortimer
UPDATE employees
SET path = ARRAY[1,6,7] || path[3:array_length(path,1)]
WHERE path && ARRAY[3];

-- Show the Hierarchy Again
SELECT id, name, path FROM employees ORDER BY path;

--------------------------------------------------------
-- Move Alice back under Arthur's purview
UPDATE employees
SET path = ARRAY[1,2] || path[4:array_length(path,1)]
WHERE path && ARRAY[3];

-- Show the Hierarchy Again
SELECT id, name, path FROM employees ORDER BY path;

--------------------------------------------------------
-- Aggregates
--

-- How can we generate a breadcrumb?
SELECT employees.id, employees.name, array_agg(parents.name ORDER BY parents.depth) AS superiors 
FROM employees 
LEFT JOIN (SELECT *, array_length(path,1) as depth FROM employees) AS parents ON employees.path && ARRAY[parents.id] 
GROUP BY employees.id;

-- And now in slow motion, what were those pieces?
SELECT 
  employees.id   AS employee_id, 
  employees.name AS employee_name, 
  parents.id     AS parent_id, 
  parents.name   AS parent_name
FROM employees 
LEFT JOIN (SELECT id, name FROM employees) AS parents ON employees.path && ARRAY[parents.id];

-- Ok, what about aggregating the children?
SELECT 
  employees.id   AS employee_id, 
  employees.name AS employee_name, 
  children.id    AS child_id, 
  children.name  AS child_name
FROM employees 
LEFT JOIN (
  SELECT id, name, path FROM employees
) AS children ON children.path && ARRAY[employees.id];

--So what does unnest do?
SELECT id, name, path, unnest(path)
FROM employees;

-- How many people work under each employee by id?
SELECT 
  employees.id, 
  employees.name, 
  count 
FROM (
  SELECT unnest(path) AS employee_id,
         count(*) as count
  FROM employees
  GROUP BY employee_id
) AS children INNER JOIN employees ON children.employee_id = employees.id
ORDER BY count DESC;

-- Add a salary column so we can roll something else up:
ALTER TABLE employees ADD COLUMN salary integer;

-- Populate it:
UPDATE employees 
   SET salary = (6 - array_length(path,1)) * 20000 + 1000 * id;

-- View it:   
SELECT id, name, path, salary FROM employees ORDER BY path;

-- Unnest with our salaries:
SELECT id, name, path, salary, unnest(path)
FROM employees;

-- Now how can we roll up the salary?
SELECT 
  employees.id, 
  employees.name, 
  total_salary
FROM (
  SELECT unnest(path) AS parent_id,
         sum(salary)  AS total_salary
  FROM employees
  GROUP BY parent_id
) AS children INNER JOIN employees ON children.parent_id = employees.id
ORDER BY id;

--
-- Now lets update this to make it more palatable for rails. 
-- Although it was handy beforehand to encode the record's id at the 
-- end of its path, it is fairly redundant.  Let's strip it out.
UPDATE employees
   SET path = path[1:array_length(path,1) - 1];

SELECT id, name, path, array_length(path,1) as depth
  FROM employees
  ORDER BY path;