1. Administering Profitability and Cost Management
  2. Working with Profitability and Cost Management Rules
  3. Creating and Managing Rules with the Manage Rules Screen
  4. Creating Allocation Rules with the Manage Rules Screen
  5. Defining a Driver Basis for Allocation Rules

Defining a Driver Basis for Allocation Rules

Defining a Destination for Allocation Rules describes how to enter the data destination for an allocation. The next step is to define an allocation driver basis, the member where driver values are found.

Note:

Profitability and Cost Management assumes a focus on the destination. The dimension and member selection on the Driver Basis tab represents a change to the destination that defines where the driver is located.

For example, if the allocation destination is the intersection of the Sales department and Salaries account, the Driver Basis definition is the Headcount account member.

By default, data is allocated to the destination proportionally, using the ratio of the driver value for that member divided by the sum of all driver values. You can choose to allocate data evenly, which is the same as if the driver ratio was 1.

Typically, systems are set up so that one member from one dimension, usually the Accounts dimension, contains the statistical members associated with any intersection. Only one member can be selected for each dimension.

To define the driver basis for an allocation rule:

  1. In an open rule, click the Driver Basis tab.

    Figure 8-11 The Driver Basis Tab of the Allocation Rule Definition Area


    Enter required information as described in the following steps.
  2. Select whether data should be allocated by ratio (Specify Driver Location) or allocated evenly (Allocate Evenly).
  3. If you selected Specify Driver Location, select the dimension and member that holds the driver data, for example Headcount.
  4. Optional: Filter the data as described in Defining a Source for Allocation Rules, step 3.
  5. When the rule source information is complete, click Save button (Save).

The following figure shows the location of a driver to be applied when allocating data for the Machined brake parts rule, the DRIV1001 member of the Drivers dimension.

Figure 8-12 Driver Location Selection Example


This illustration shows an allocation driver location selection as described in the previous paragraph.

Tip:

The next optional step is to enter an offset for the rule, the member to hold an increase to balance a corresponding decrease in the allocation source (Defining an Allocation Offset for Allocation Rules (Navigator)).