A planning hierarchy represents the organizational levels and units in your company for which you want to plan. A planning hierarchy is a combination of characteristic values based on the characteristics of one information structure.

Planning hierarchies provide a framework for your planning activities in consistent planning and level-by-level planning. With these planning methods, a planning hierarchy must exist for the information structure before you can plan its key figures. You can create only one planning hierarchy for an information structure. However, a hierarchy can have as many different branches as you like. See also Planning Hierarchies Containing Product Groups.

You can create one or more planning hierarchies automatically when you install Release 3.0, with the Master Data Generator.

You can also create a planning hierarchy manually (see Creating a Planning Hierarchy). It consists of one or more planning levels to which you assign characteristic values.

You maintain planning hierarchies in much the same way as you maintain product groups, on a level-by-level basis, and define the aggregation factor and the proportional factor of each characteristic value just as you define them for the members of a product group. For more information, see Planning Hierarchy Maintenance Functions.