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Demand Forecasting and Price Optimisation

Pricing is recognised as a pivotal determinant of success in many industries and can be one of the most challenging tasks. Companies often struggle with several aspects of the pricing process, including accurately forecasting the financial impact of potential tactics, taking reasonable consideration of core business constraints, and fairly validating the executed pricing decisions. Expanding product offerings adds further computational requirements to making real-time pricing decisions, thereby compounding the difficulty of this already overwhelming task.

This solution addresses the challenges raised above by utilising historical transaction data to train a demand forecasting model. Pricing of products in a competing group is also incorporated to predict cross-product impacts such as cannibalisation. A price-optimisation algorithm then employs the model to forecast demand at various candidate price points and takes into account business constraints to maximise profit. The solution can be customised to analyse various pricing scenarios as long as the general data science approach remains similar.

The process described above is operationalised and deployed in the Cortana Intelligence Suite. This solution will enable companies to ingest historical transaction data, predict future demand, and obtain optimal pricing recommendations on a regular basis. As a result, the solution drives opportunities for improved profitability and reductions in time and effort allocated to pricing tasks.

Previsão de Procura e Otimização de PreçosA definição de preços é reconhecida como um determinante fulcral do sucesso em várias indústrias e pode ser uma das tarefas mais desafiantes. As empresas costumam ter problemas com vários aspetos do processo de definição de preços, incluindo uma previsão precisa do impacto financeiro de potenciais táticas, tento uma consideração razoável pelas principais limitações comerciais e validar adequadamente as decisões de preços executadas. Aumentar as ofertas de produtos acrescenta requisitos computacionais para tomar decisões de preços em tempo real, facilitando a dificuldade desta tarefa já complicada.

Disclaimer

©2017 Microsoft Corporation. All rights reserved. This information is provided “as is” and may change without notice. Microsoft makes no warranties, express or implied, with respect to the information provided here. Third-party data was used to generate the solution. You are responsible for respecting the rights of others, including procuring and complying with relevant licences in order to create similar datasets.

Previsão de Procura e Otimização de PreçosA definição de preços é reconhecida como um determinante fulcral do sucesso em várias indústrias e pode ser uma das tarefas mais desafiantes. As empresas costumam ter problemas com vários aspetos do processo de definição de preços, incluindo uma previsão precisa do impacto financeiro de potenciais táticas, tento uma consideração razoável pelas principais limitações comerciais e validar adequadamente as decisões de preços executadas. Aumentar as ofertas de produtos acrescenta requisitos computacionais para tomar decisões de preços em tempo real, facilitando a dificuldade desta tarefa já complicada.

Related solution architectures

Demand ForecastingAccurately forecasting spikes in demand for products and services can give a company a competitive advantage. This solution focuses on demand forecasting within the energy sector.

Demand Forecasting

Accurately forecasting spikes in demand for products and services can give a company a competitive advantage. This solution focuses on demand forecasting within the energy sector.

Demand Forecasting for Shipping and DistributionThe Demand Forecasting for Shipping and Distribution Solution uses historical demand data to forecast demand in future periods across various customers, products and destinations. For instance, a shipping or delivery company wants to predict the quantities of the different products its customers want delivered at different locations at future times. A company can use these forecasts as inputs into an allocation tool that optimises operations, e.g. in the routing of delivery vehicles, or to plan capacity in the longer term.

Demand Forecasting for Shipping and Distribution

The Demand Forecasting for Shipping and Distribution Solution uses historical demand data to forecast demand in future periods across various customers, products and destinations. For instance, a shipping or delivery company wants to predict the quantities of the different products its customers want delivered at different locations at future times. A company can use these forecasts as inputs into an allocation tool that optimises operations, e.g. in the routing of delivery vehicles, or to plan capacity in the longer term.