Common Uses
Price Optimization Models help businesses determine initial pricing,promotional pricing and markdown (or discount) pricing:
- Initial price optimization works well for companies with a stable base of long life-cycle products-grocery stores, drug chains,office-supply stores and commodities manufacturers;
- Promotional price optimization helps set temporary prices to spur sales of items with long life-cycles-newly introduced products bundled together in special promotions and loss leaders;
- Markdown optimization helps businesses selling short lifecycle products subject to fashion trends and seasonality-airlines,hotels, specialty retailers and mass merchants.