# Driver Model

A model is a structured representation of business logic constructed from an interconnected hierarchy of rows. Instead of using scattered formulas, a model organizes logic into a hierarchy of rows, where:

* Inputs feed into calculations
* Calculations roll up into parent rows
* Relationships define how values flow across the model

This approach ensures that your planning logic is centralized, transparent, scalable, and easier to maintain.

### Driver Model

A driver model is a type of model in which the outputs are determined by key input variables called drivers. Drivers are the key inputs that influence business outcomes. Examples include *units sold*, *price per unit*, *headcount*, *production volume*, etc. These drivers are linked to outputs such as *revenue*, *costs*, or *demand* through formulas or proportional logic.

### How a driver model works

In a driver model, you first create a model with a hierarchical structure of connected rows representing business logic. Next, using the rows,

1. **Define the drivers** (input variables)
2. **Establish relationships** between drivers and outputs
3. **Calculate outcomes** using formulas or proportional logic

The following formulas illustrate how input drivers can be connected to business outcomes.

{% code overflow="wrap" %}

```
Revenue = Units Sold × Price
Total Cost = Headcount × Cost per Employee
```

{% endcode %}

Driver-based modeling also aligns with allocation concepts, where values are distributed proportionally based on a driver’s relative contribution.

### Why use a driver model?

* Run what-if scenarios by changing assumptions (drivers) to see instant results.
* Improves decision-making with clear cause-and-effect relationships.
* Simplifies forecasting by focusing on key business levers.

### Model Builder

In Planning sheet, when you select **Driver Model**, the **Model Builder** is enabled.

<figure><img src="/files/XQFIOoCpcpJw7J0g691N" alt=""><figcaption></figcaption></figure>

Model Builder is a no-code, flexible interface for creating and managing advanced and driver-based models.

#### Capabilities of Model Builder

* Create models through a WYSIWYG interface, with guided interactions, menus, and dropdowns.
* Customize with various row types, formulas, and aggregations.
* Use templates to reuse repetitive model structures.

The image below shows the Model Builder interface before a model is built:

<figure><img src="/files/l4HTTpIw9JDarf5FiOCj" alt=""><figcaption></figcaption></figure>

From here, you can create parent rows, add related line items as child rows, and define how values flow through the model.&#x20;

### Use cases

The Model Builder supports a wide range of planning scenarios, including:

* Financial Planning & Analysis (FP\&A)
* Supply chain planning
* Headcount planning
* Operations planning
* What-if P\&L reporting
* 3-Statement financial model
* Weekly sales forecasting
* Budgeting and so on.

By organizing logic into a model, you can build reusable frameworks that adapt to changing business needs.

### Next step

* Create a model using Model Builder.

### Related content

* Create a driver-based model.
* Visualize the model using the tree layout.


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