Defining Analysis Services Dimensions - SQL Server Analysis Services 2012 Cube Development - page 62

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Unfortunately, the flexibility that parent-child dimensions offer does come with a price
of performance penalty. In general you should try to use flattened dimensions with a
finite number of levels in lieu of parent-child dimensions when possible. For example,
we could model the sample Employees hierarchy to include six levels (Employee
Level 1 through Employee Level 6) since this is a sample database and number of
levels will not change. In real-world applications you may or may not have such lux-
ury; if your company decides to add a new layer of employees, you would have to
modify your dimension structure and reprocess the measure groups referencing this
dimension. If you can't completely avoid parent-child structures, try to limit each cube
to only one parent-child dimension.