Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Discount or incentive
Patent
1998-05-21
2000-07-25
MacDonald, Allen R.
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Discount or incentive
705 1, 705 7, 705 14, 705 16, G06F 1760
Patent
active
060946415
ABSTRACT:
A method for incorporating psychological effects into a demand model for pricing. First the original demand model is modified to include a mechanism to convert actual prices into perceived prices, thus causing the demand model to predict higher demand for certain prices. The user specifies the function that converts from real prices to perceived prices. This modified demand function is then fitted to a sales history to yield the parameters appropriate to its particular form. Also, the demand model can be modified to account for promotional effects. The user defines a visibility model, which gives the relative increase in demand for an item caused by a promotion, and the cost of the promotion. The demand model is modified to include the effect of increased demand based on the visibility, and a profit model is modified to account for the added cost due to the added visibility. The profit model is then optimized with respect to both prices and promotions.
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Chaubal Charu V.
Ouimet Kenneth J.
Irshadullah M.
KhiMetrics, Inc.
MacDonald Allen R.
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