Understanding Settlement Units

Settlement units define the “lowest common denominator set” of aggregation dimensions. For example, if aggregations are performed based on Rate Class, Strata, Procurement Group, and Supplier, the following dimensions would form the “lowest common denominator set” of these dimensions (since these are shared by different suppliers):

• Rate Class

• Strata

• Procurement Group

Settlement units define factor values based on unique combinations of dimension values. Different factor values can be defined for each unique combination of a settlement unit’s dimensions. For example, a Rate Class, Strata, and Procurement Group settlement unit could have different factor values for each unique combination of those dimensions. These multi-variable factor values can be retrieved by value derivation algorithms when performing aggregation, estimation, and forecasting calculations based on the same dimensions as defined for the settlement unit.

For example, an aggregation measuring component that aggregates data based on a specific combination of Rate Class, Strata, and Procurement Group could retrieve a “loss” factor value from a Rate Class, Strata, and Procurement Group settlement unit based on the same combination of dimensions. See Applying Losses for an example of how settlement units can be referenced in aggregation calculations.

Aggregation processing also uses settlement units to generate counts of accounts for forecasting based on combinations of these dimensions.

Settlement units are defined by:

• Dimensions: The attributes by which aggregated data should be analyzed
• Dimension Combinations: Unique combinations of the settlement unit’s dimensions (defined in the Settlement Unit Dimension Combination zone)
• Valid Factors: Valid multi-variable factors (defined in the Settlement Unit Valid Factors zone)

Refer to Configuring Settlement Units for more information about setting up settlement units and their respective dimension combinations, factors, and factor values.