1. User Guide
  2. Business Rules Administration
  3. Allocation Models

3.9 Allocation Models

An Allocation Model consists of a list of individual allocation rules that can be executed as a single unit. This version of Profitability Management Cloud Service supports only the Standard type of Allocation Model construction.

  • Standard Model: A Standard Allocation Model consists of a list of individual allocation rules that run sequentially and that can be executed as a single unit of work. Standard Allocation Models are useful to assemble a logical grouping of allocation rules into a single executable rule.
  • Circular Model: A Circular Allocation Model is similar to a Standard Allocation Model, but includes two lists of allocation rules: a list of “circular” rules and a list of “sweep” rules. The list of circular rules executes first; generally, the circular list runs multiple times. Each rule within the circular list of rules runs sequentially. After the circular list has run one or more times, each of the sweep rules also runs sequentially, but the list of sweep rules only runs once.

    The primary purpose of the Circular Allocation Model is to process allocation scenarios in which the allocation rules can Source data that result from previous allocations and that send data back to Sources that had previously been eliminated. One common example of this kind of situation occurs in a center-to-center type of allocation rule that involves providers of shared services. For example, a block of allocation rules can be designed to push expenses from a series of providers of shared services such as IT, Finance, HR, Payroll, Accounting, Treasury, and so on to a downstream series of direct support centers and profit centers. An issue that you can encounter here is that HR allocates most of its expense to direct support centers and to profit centers, but also allocates some of its expense to other providers of shared services such as Payroll or Accounting. These centers, in turn, might allocate some of their expense back to HR when the first allocation had already cleared all of the expenses from the HR center.