System and Methods for Generating Price Sensitivity
The present invention relates to systems and methods for calculating a segment's sensitivity to price changes. A histogram distribution is generated for transaction frequency by price as the initial part of the sensitivity analysis. The shape of this histogram may be used to extrapolate a sensitivity measure. This can be done in two distinct ways: statistical regression or slope approximation. For statistical regression, the inverse of the cumulative distribution function is first calculated. The slope of this function is determined to be the sensitivity; the steeper the curve the more sensitive the segment is to price changes. The second technique approximates the slope of the right hand side of the histogram in order to determine sensitivity.
1 . A method for generating segment price sensitivity, useful in association with an integrated price management system, the method comprising:
generating a histogram distribution of frequency of deals by deal price for a segment; and
calculating the sensitivity of the segment to price change using the shape of the histogram distribution.
2 . The method as recited in claim 1 , further comprising generating a segment from transaction logs.
3 . The method as recited in claim 2 , wherein the segment is generated using product attribute information, market data, and transaction history data.
4 . The method as recited in claim 1 , further comprising outputting the sensitivity to a pricing system.
5 . The method as recited in claim 4 , wherein the sensitivity is used by the pricing system as a pricing power factor in a risk/power analysis.
6 . The method as recited in claim 1 , wherein the sensitivity is calculated by computing an inverse cumulative distribution function of the histogram, and determining the slope of the inverse cumulative distribution function.
7 . The method as recited in claim 1 , wherein the sensitivity is calculated by computing an approximation of a slope for the right hand curve of the histogram.
8 . The method as recited in claim 7 , wherein the computing the approximation comprises:
setting a high and a low anchor;
averaging the frequency around the high anchor to yield a high frequency value;
averaging the frequency around the low anchor to yield a low frequency value;
generating a line between the high frequency value and the low frequency value; and
determining the slope of the line.
9 . The method as recited in claim 8 , wherein the high anchor is between 50 to 65% of the distribution histogram.
10 . The method as recited in claim 8 , wherein the low anchor is between 80 to 100% of the distribution histogram.
11 . A system for generating segment price sensitivity, useful in association with an integrated price management system, the system comprising:
a segment distribution generator configured to generate a histogram distribution of frequency of deals by deal price for a segment; and
a sensitivity approximator, including a processor, configured to calculate the sensitivity of the segment to price change using the shape of the histogram distribution.
12 . The system as recited in claim 11 , further comprising a segmenter configured to generate a segment from transaction logs.
13 . The system as recited in claim 12 , wherein the segmenter generates the segment using product attribute information, market data, and transaction history data.
14 . The system as recited in claim 11 , further comprising an interface configured to output the sensitivity to a pricing system.
15 . The system as recited in claim 14 , wherein the sensitivity is used by the pricing system as a pricing power factor in a risk/power analysis.
16 . The system as recited in claim 11 , wherein the sensitivity approximator calculates the sensitivity by computing an inverse cumulative distribution function of the histogram, and determining the slope of the inverse cumulative distribution function.
17 . The system as recited in claim 11 , wherein the sensitivity approximator calculates the sensitivity by computing an approximation of a slope for the right hand curve of the histogram.
18 . The system as recited in claim 17 , wherein the sensitivity approximator performs the steps of:
setting a high and a low anchor;
averaging the frequency around the high anchor to yield a high frequency value;
averaging the frequency around the low anchor to yield a low frequency value;
generating a line between the high frequency value and the low frequency value; and
determining the slope of the line.
19 . The system as recited in claim 18 , wherein the high anchor is between 50 to 65% of the distribution histogram.
20 . The system as recited in claim 18 , wherein the low anchor is between 80 to 100% of the distribution histogram.