Organization Modeling in Dynamics 365 Retail

Updated: Feb 24

elow written article provide you insight on Organization Modeling in D365 Retail and Why Organization modeling is required and what organization hierarchy provides in D365 Retail.


An organization is a group of people working together to carry out the business process or achieve a goal.

Organization model provides the ability to model the complex business models that are required to manage reports and measure the performance of the business. Below chart help to understand basic concept of organization model

Why Organization Modeling ?

It provides the ability to provide to model the complex business models that are required to manage, report and to measure the performance. Hierarchy help to define the model of the organizations.

Conceptual Model In D365 Retail

Below framework is the concept of internal organization widely used.

Internal Organization

Internal Organization belongs to one or more organization hierarchy represent the legal entity's business operation.

Legal Entity

A Legal entity is an organization that is identified through registration with a legal authority and it can enter into contracts are required to prepare statement that report on their performance

Operating Unit

An operating unit is an organization type that is used to the divide the control of economics resources and operational process in a business. People in an operating unit try to optimize the use of scare resources, improve processes and account for their performance.

In Microsoft dynamics 365 for Retail there are 5 types of operating unit which are as follows:-

- Retail Channel

An operating Unit that represent a retail store that is used to configure and manage stores. A retail channel is used to create and configure the retail stores and set the default company, warehouse, sales taxes and customer.

A Retail Channel is of three types which as follows:-

1. Retail Store

2. Online store

3. Call Center

- Business Unit

A Business unit is semi autonomous operating unit that is created to business objectives. A business unit is based on industries or product lines that the organization serves independently of legal entities.

- Cost Center

An operating unit in which managers are accountable for budgeted and actual expenditure. A cost center is used for the management and operational control of business processes that span legal entities

- Department

An operating unit that represent a category or a functional part of an organization that perform a specific task, such as sales or accounting. A department is used to report on functional areas. A department might have a profit and loss responsibility and might consist of a group of cost centers.

- Value Stream

An operating unit that controls one or more productive flows. A Value stream is commonly used in lean manufacturing to control the activities and the flow required to supply a product or services to consumer

Retail Hierarchy and Its Purposes

There are four hierarchy purposed which are specific to retail which are as follows:-

Retail Assortment

An Assortment is a process of involving the number and type of products that retailer want to display for purchases by consumer. Its also know as product assortment. Its a strategy used by retailer to manage space and increase sales. In other word Assortment is a process of what products are available in which stores or channel.

A retailer can organize stores by region and assign them to the retail assortments hierarchy. An assortment hierarchy can be divided into multiple categories and different categories can be assigned to multiple or selected region.

Here Retailer have focus on two major points

a. Different type of product available (Width of Product)

A large number of different product

b. Variation of product available (Depth of Product)

A number of variation of single product

Retail Replenishment

Replenishment is an process of filling again by supplying what again what has been used up. In Retail it is a process that occurs regularly. It focuses on acquiring product to support anticipated need and demand forecasts is the key to understand the future need.

In Retail replenishment, the purpose provide the ability to define a hierarchy of stores which can be utilized to configure replenishment rules for purchasing, buyer purchase, and cross docking functionality.

Retailer can define replenishment hierarchy based on size of stores and location of the warehouse distribution centers.

Retail Reporting

Retail reporting purpose provide the ability to create a hierarchy for stores by any reporting unit for reporting purpose with the ability to roll up the hierarchy of stores for financial reporting

Retail can view channel performance based on individual stores, based on geographical location or on region basis.

Retail POS Posting

Retail POS posting is an process to account for the transaction that occurs at store. The POS Posting purposed is used to define the posting process by hierarchy, updates, sales order , inventory and financials.


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