flux-analysis

Decomposition Techniques

Price x Volume Separation

The foundational split for any metric expressible as unit price multiplied by quantity.

Two-factor formulas:

Total Movement = Actual Result - Baseline (budget or prior period)

Quantity Component  = (Actual Units - Baseline Units) x Baseline Unit Price
Pricing Component   = (Actual Unit Price - Baseline Unit Price) x Actual Units

Check: Quantity Component + Pricing Component = Total Movement
       (when the interaction term is absorbed into one of the two factors)

Three-factor formulas (isolating composition shifts):