1. MARKED PRICE
Input generic variables (example):
Unit Cost, Margin, Quantity , Taxes,
Overhead etc.
Deterministic Model sample:
Y (Marked Price in $) = m1.x1 + m2.x2+c
Where x1, x2 also in $
m1, m2 – absolute variables like quantity
Method to be used:
Linear Programming
KPI to Optimize (sample): Maximize
margin
Discount on Marked Price
Input customer variables (example):
Geography, company revenue, product-
package-licenses
Probabilistic Model sample:
Y (Discount %) ≈ m1.x1 + m2.x2….
Where x1, x2 can be in any units
m1,m2 – slopes
Method to be used:
Multiple Linear Regression
Rate parameter to optimize (sample):
Minimize sum of squares of difference of
(predicted-actual) values