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Sunday, October 30, 2016

Price Optimization Using Decision Trees

 Interesting example, a technique I also experimented with for Retail.  Good because it relates to specific business process, and be can tested in that context.  Easy to understand the idea of a decision tree.  And building or using the model is also training in the business process.  But the methods involved are not new data science, and have been  around for decades.

Price Optimisation Using Decision Tree (Regression Tree) - Machine Learning  by Bernard Antwi Adabankah  

The research was conducted to find out what price  maximises profit without sacrificing the high demand for the product due to the price being too high nor sacrificing the margins on the product due to the price being too low. 

The goal is to experiment with different price levels for the same product in one market place and country to see how sales volumes change with prices and which volume level of products we can be sold for that optimal price range.  ... " 

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