System and method determining reference values of sensitivities and client strategies based on price optimization

摘要

A computer implemented method for determining the reference values of sensitivities and strategies for price optimization demand models from a profit function and current product price. A total profit objective is expressed as the maximization of profit and volume, where a strategy parameter represents the relationship between profit and volume. From the total profit objective, the bounds of the strategy parameter are expressed as conditional inequalities relating the bounds to functions of the unit profit at the current rate and average volume. The strategy parameter is then set to the average of these bounds. The reference elasticity is expressed as a function of the unit profit function and average volume. The resulting reference values can be used in a price optimization system to generate recommended prices that relate to an industry's current pricing scheme.