LINQ's Cost Allocation extends LINQ's core model to allow organisations to calculate the costs of each Information Output.  The importance of Cost Allocation is discussed in this article.  The basic concepts are explained in this article.

LINQ's core model values reuse - the logic being that the more Information Outputs that are being supported by an Asset (either an Action, Information, Person or System), the more valuable that Asset is.  Cost Allocation builds on that core model by allocating Action Cost equally to each of the connected Information Outputs.  This simple approach is called Value-weighted Cost Allocation.  In its simplest form, it looks like this:

LINQ's core model recognises that Information Outputs deliver different business values to the organisation.  So those five Information Outputs might actually have different values that could be described like this:

Using descriptions is cumbersome so LINQ supports a Business Value Index where 10 (out of 10) represents an Output that's critical to the business; zero represents Waste.  So those descriptions can be represented by Business Value Indices like this:

There's an implied service level that falls out of those values.  An essential output is going to expect a higher level of service than an important output... than a discretionary output.  Logically, the higher the expected service level, the higher the cost that might be expected to cover that service level.  So this leads to the Value-weighted Cost Allocation here:

To explain the logic:

OutputValueRatio of Output Value to Process ValueAllocated Cost
Essential Output    1010:30$3,333
Really Important88:30$2,667
Less Important44:30$1,333  

Most organisations will choose to use the richer Value-weighted Cost Allocation because it is a better economic model than Reuse-weighted Cost Allocation.  For this reason, Value-weighted Cost Allocation is the default.  The weighting method can be chosen in the Visualisations Panel for the canvas:

For the Insights Panel, the method can be selected using the Settings button: