Product pricing optimizer
AssigneeOracle International Corporation
InventorsAndrew Vakhutinsky, Ngai-Hang Zachary Leung
Life of this patent
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Abstract
A system for determining product pricing for a product category receives a non-linear problem for the product category, in which the non-linear problem includes a demand model. For a plurality of pair of products in the product category, the system determines coefficients for a change in demand of a first product when a price of a second product is changed. The system then generates an approximate Mixed Integer Linear Programming (“MILP”) problem that includes a change of demand based on a sum of the determined coefficients. The system then solves the MILP problem to obtain a MILP solution, which provides the product pricing.
Claims18
A non-transitory computer readable medium having instructions stored thereon that, when executed by a processor, cause the processor to determine product pricing for a product category, the determine product pricing comprising:
- receiving a non-linear problem for the product category, wherein the non-linear problem comprises a demand model;
- for a pair of products in the product category, determining coefficients for a change in demand of a first product of the pair when a price of a second product of the pair is changed to one or more different price levels on a second product price ladder, and repeating the determining coefficients for at least all related pair of products in the product category;
- generating binary decision variables that indicate whether price variables were assigned to a price on a corresponding price ladder;
- generating an approximate Mixed Integer Linear Programming (MILP) problem wherein a change of demand for each product is based on a sum of the determined coefficients;
- solving the MILP problem using the binary decision variables to obtain a MILP solution;
- and
- converting the MILP solution into the product pricing, wherein the price for each product is set to a corresponding generated binary decision variable.
A computer implemented method for determining product pricing for a product category, the method comprising:
- receiving a non-linear problem for the product category, wherein each pair of products have mutual non-zero price-demand effects, wherein the non-linear problem comprises a demand model;
- for a pair of products in the product category, determining coefficients for a change in demand of a first product of the pair when a price of a second product of the pair is changed to one or more different price levels on a second product price ladder, and repeating the determining coefficients for at least all related pair of products in the product category;
- generating binary decision variables that indicate whether price variables were assigned to a price on a corresponding price ladder;
- generating an approximate Mixed Integer Linear Programming (MILP) problem wherein a change of demand for each product is based on a sum of the determined coefficients;
- solving the MILP problem using the binary decision variables to obtain a MILP solution;
- and
- converting the MILP solution into the product pricing, wherein the price for each product is set to a corresponding generated binary decision variable.
A product pricing optimization system that determines product pricing for a product category in response to receiving a non-linear problem for the product category, wherein the non-linear problem comprises a demand model, the system comprising:
- a processor;
- a non-transitory computer-readable memory coupled to the processor and storing instructions that when executed by the processor comprise:
- a coefficient generator that, for a pair of products in the product category, determines coefficients for a change in demand of a first product of the pair when a price of a second product of the pair is changed to one or more different price levels on a second product price ladder, and repeating the determining coefficients for at least all related pair of products in the product category;
- a decision variable generator that generates binary decision variables that indicate whether price variables were assigned to a price on a corresponding price ladder;
- a Mixed Integer Linear Programming (MILP) generator that generates an approximate MILP problem wherein a change of demand for each product is based on a sum of the determined coefficients;
- a MILP solver that solves the MILP problem using the binary decision variables to obtain a MILP solution;
- and
- converts the MILP solution into the product pricing, wherein the price for each product is set to a corresponding generated binary decision variable.
Dependencies are inferred from the claim text.