System and method for integrating retail price optimization for revenue and profit with business rules
The disclosed technology improves the process of generating recommended prices for retail products by optimizing revenue and profit while complying with a set of business rules by assigning a monetary value to each business rule. Then for each decision price that violates a business rule constraint, a penalty value is added to the monetary value. If the monetary value including the penalty is better than an original monetary value, the decision price is included in the recommended prices.
1. A computer-implemented method comprising:
obtaining, via at least one processor, a product network having one or more decision price sets, the product network having one or more price families having one or more products;
defining a set of revenue-profit weights;
selecting a weight from the set of revenue-profit weights;
generating a price-optimized solution set by optimizing the one or more decision price set of the product network based on the selected weight;
outputting the price-optimized solution set as a frontier curve;
generating a revenue-profit value for the product network based on the one or more decision prices and the selected weight;
generating a value-plus-constraint for the product network based on the decision prices and the selected weight;
determining a penalty value, the penalty value based on each decision price of the one or more decision prices that violated a flexible business rule and the revenue-profit value;
updating the value-plus-constraint based on the penalty value; and
for one or more decision prices of the decision prices that violated the flexible business rules, determining one or more price changes.
2. The computer-implemented method of claim 1 , further comprising:
obtaining, via the at least one processor, a collection of products and stores;
grouping the collection of products into one or more price families;
grouping the collection of stores into one or more store groupings;
generating the one or more decision price set based on the one or more price families and the one or more store groupings; and
generating the product network by applying one or more business rules to the one or more decision prices.
3. The computer-implemented method of claim 1 , wherein the set of revenue-profit weights are predefined intervals between 0 and 1.
4. The computer-implemented method of claim 1 , wherein the set of revenue-profit weights are dynamically defined.
5. The computer-implemented method of claim 1 , wherein for the selected revenue-profit weight the method further comprises:
generating a constrained best solution set by adjusting a monetary value based on a set of business rules, wherein the first set of business rules include at least one flexible rule;
storing the constrained best solution set as a recommended price set for the selected weight; and
storing the constrained best solution set as an optimal price set for the selected weight.
6. The computer-implemented method of claim 1 wherein for the selected revenue-profit weight the method further comprises:
generating an unconstrained best solution set by adjusting a monetary value based on a set of business rules, wherein the second set of rules includes at least one hard rule; and
storing the unconstrained best solution set as an optimal price set for the selected weight.
7. A system comprising:
at least one processor; and
at least one memory, storing instructions, which when executed by the at least one processor, causes the at least one processor to:
obtain a product network having one or more decision price sets, the product network having one or more price families having one or more products;
define a set of revenue-profit weights;
select a weight from the set of revenue-profit weights;
generate a price-optimized solution set by optimizing the one or more decision price set of the product network based on the selected weight;
output the price-optimized solution set as a frontier curve;
generate a revenue-profit value for the product network based on the one or more decisions prices and the selected weight;
generate a value-plus-constraint for the product network based on the decision prices and the selected weight;
determine a penalty value, the penalty value based on each decision price of the one or more decision prices that violated a flexible business rule and the revenue-profit value;
update the value-plus-constraint based on the penalty value; and
for one or more decision prices of the decision prices that violated the flexible business rules, determine one or more price changes.
8. The system of claim 7 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
obtain a collection of products and stores;
group the collection of products into one or more price families;
group the collection of stores into one or more store groupings;
generate the one or more decision price set based on the one or more price families and the one or more store groupings; and
generate the product network by applying one or more business rules to the one or more decision prices.
9. The system of claim 7 , wherein the set of revenue-profit weights are predefined intervals between 0 and 1.
10. The system of claim 7 , wherein the set of revenue-profit weights are dynamically defined.
11. The system of claim 7 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
generate a constrained best solution set by adjusting a monetary value based on a set of business rules, wherein the first set of business rules include at least one flexible rule;
store the constrained best solution set as a recommended price set for the selected weight; and
store the constrained best solution set as an optimal price set for the selected weight.
12. The system of claim 7 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
generate an unconstrained best solution set by adjusting a monetary value based on a set of business rules, wherein the second set of rules includes at least one hard rule; and
store the unconstrained best solution set as an optimal price set for the selected weight.
13. A non-transitory computer-readable medium storing instructions, which when executed by at least one processor, causes the at least one processor to:
obtain a product network having one or more decision price sets, the product network having one or more price families having one or more products;
define a set of revenue-profit weights;
select a weight from the set of revenue-profit weights;
generate a price-optimized solution set by optimizing the one or more decision price set of the product network based on the selected weight;
output the price-optimized solution set as a frontier curve;
generate a revenue-profit value for the product network based on the one or more decisions prices and the selected weight;
generate a value-plus-constraint for the product network based on the decision prices and the selected weight;
determine a penalty value, the penalty value based on each decision price of the one or more decision prices that violated a flexible business rule and the revenue-profit value;
update the value-plus-constraint based on the penalty value; and
for one or more decision prices of the decision prices that violated the flexible business rules, determine one or more price changes.
14. The non-transitory computer-readable medium of claim 13 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
obtain a collection of products and stores;
group the collection of products into one or more price families;
group the collection of stores into one or more store groupings;
generate the one or more decision price set based on the one or more price families and the one or more store groupings; and
generate the product network by applying one or more business rules to the one or more decision prices.
15. The non-transitory computer-readable medium of claim 13 , wherein the set of revenue-profit weights are dynamically defined.
16. The non-transitory computer-readable medium of claim 13 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
generate a constrained best solution set by adjusting a monetary value based on a set of business rules, wherein the first set of business rules include at least one flexible rule;
store the constrained best solution set as a recommended price set for the selected weight; and
store the constrained best solution set as an optimal price set for the selected weight.
17. The non-transitory computer-readable medium of claim 13 , further comprising instructions, which when executed by the at least one processor, causes the at least one processor to:
generate an unconstrained best solution set by adjusting a monetary value based on a set of business rules, wherein the second set of rules includes at least one hard rule; and
store the unconstrained best solution set as an optimal price set for the selected weight.