What is weighting type in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: weighting type

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Describes the weightings "Industry Sector" or "Country" in Credit Portfolio Data Processing and Default Mode Credit Portfolio Model. Weighting factors can be assigned to these weighting types. For example, you can assign the weighting factor "France" to the weighting type "Country" or assign weighting factor "Metal Industry" to the "Industry" weighting type.

Smart SAP Assistant

• Key Concepts: 
  Weighting type is a feature of the Credit Risk Management component of SAP FS-BA-PM. It is used to assign a weight to each risk factor in order to determine the overall risk of a customer or transaction. The weighting type can be set to either absolute or relative, depending on the desired outcome. 
  
  How to use it: 
  To use the weighting type feature, first select the desired weighting type (absolute or relative). Then, assign a weight to each risk factor. The weights should be based on the importance of each factor in determining the overall risk. Finally, calculate the overall risk by multiplying each risk factor's weight by its value. 
  
  Tips & Tricks: 
  When assigning weights, it is important to consider the relative importance of each risk factor. For example, if one factor is more important than another, it should be assigned a higher weight. Additionally, it is important to ensure that all weights add up to 1 in order to accurately calculate the overall risk. 
  
  Related Information: 
  The Credit Risk Management component of SAP FS-BA-PM also includes features such as credit limit calculation and credit scoring. These features can be used in conjunction with the weighting type feature to further refine the overall risk calculation.