Functional Decomposition

AAA

DEFINITION of 'Functional Decomposition'

A method of business analysis that dissects a complex business process to show its individual elements. Functional decomposition is used to facilitate the understanding and management of large and/or complex processes and can be used to help solve problems. Functional decomposition is also used in computer engineering to help with software design.

INVESTOPEDIA EXPLAINS 'Functional Decomposition'

Basically, functional decomposition takes something complicated and simplifies it. The individual elements of the process and their hierarchical relationship to each other are commonly displayed in a diagram called a functional decomposition diagram. Other common business methods for simplifying complex problems and processes include decision trees, which allow users to consider multiple possible solutions to a problem, and flow charts, which show the sequence of a process.



RELATED TERMS
  1. Decision Tree

    A schematic tree-shaped diagram used to determine a course of ...
  2. Correlation

    In the world of finance, a statistical measure of how two securities ...
  3. Covariance

    A measure of the degree to which returns on two risky assets ...
  4. Regression

    A statistical measure that attempts to determine the strength ...
  5. Standard Deviation

    1. A measure of the dispersion of a set of data from its mean. ...
  6. Financial Modeling

    The process by which a firm constructs a financial representation ...
Related Articles
  1. Regression Basics For Business Analysis
    Investing Basics

    Regression Basics For Business Analysis

  2. One Portfolio For Asset Allocation
    Investing Basics

    One Portfolio For Asset Allocation

  3. An Introduction To The Relative Strength ...
    Active Trading

    An Introduction To The Relative Strength ...

  4. Do Financial Decisions Get Better With ...
    Active Trading Fundamentals

    Do Financial Decisions Get Better With ...

Hot Definitions
  1. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  3. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  4. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  5. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  6. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
Trading Center