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What Are Value-Based Hierarchies?

Although hierarchies are typically composed of named levels, they do not have to be. The parent-child relations among dimension members may not define meaningful levels. Consider an employee dimension in which each manager has one or more reports, forming a parent-child relation. Creating levels based on these relations (such as individual contributors, first-level managers, second-level managers, and so forth) may not be meaningful for analysis. Likewise, the line item dimension of financial data does not have levels. This type of hierarchy is called a value-based hierarchy.