Page Comparison

Take the following steps to configure a model:

Create a Model Based on Negotiation Guidance Model Class

Go to Optimization > Models (MO) andclick Add Model button at the top right.

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The same model class, Negotiation Guidance, can be used by many models. Use informative names for your models, providing information on your dataset, and your calculation case.

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Set the Scope of Transactions (Definition Step)

In the Definition step, you map the inputs and set the scope of the model. The user inputs are always on the left. By default the inputs are filled with values set during the deployment of the accelerator.

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You can then click the Continue button (top right) which takes you to the Analysis step.

Analyze Data in the Scope and Set Price Drivers Parameters (Analysis Step)

When you arrive at the Analysis step from the Definition step, the model first runs a calculation to prepare the data. It can take some minutes, depending on the size of the transaction source. The goal of this calculation is to format and save the data that will be used in the next steps of the model. Two tables are created: Transactions and Profile. The tables of a model are always accessible through the menu in the top right corner. But usually, you would not need to access them like this; all needed information is directly provided in the sections of the model.

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Once the calculation has run, two tabs appear: Data Profile and Price Drivers Setup.

Data Profile

This tab is mainly a dashboard made of three portlets:

• Scope Summary – This bar chart shows how much data is in the scope of the segmentation and how much is filtered, among different dimensions, from the total profit to the number of transactions.

• Details for all Fields – This table is a summary of all the mapped fields and the dimensions of the transaction source, taking into account the filtered data in the scope. For any data, you get the min and max value, the number of nulls, the number of different values (cardinality), and information about the type of the field and its owner. It is useful to check if there are some nulls in fields that you would want to use as segmentation levels, or if some cardinalities are too high for a segmentation.

• Distinct Values – This portlet is optional. It is created if you enter a value in the left user input Show distinct values for, and apply the settings. It allows you to deeper check any dimension of the data scope, to validate if you are interested in using it for the segmentation.

Price Drivers Setup

In this tab, you choose the fields on which the price drivers are calculated. The price drivers evaluate the importance of any feature of the data to forecast the optimization target (i.e. generally the margin percentage), the interactions among all features, detect hierarchies, and provide dimension recommendations for the segmentation. These values and recommendations will then help you define the dimensions you will take as levels of segmentation and their order. It will only provide help: you can use any dimension in the segmentation even if the related price driver has not been calculated. The more features you choose, and the more cardinality they have, the longer the calculation will take. By default, all the dimensions of cardinality between 2 and 30 are pre-selected (excluding non-dimensional features).

Once the choice is made, click Continue. The next step, Configuration, will first run the calculation of price drivers and then provide the next section.

Configure the Segmentation (Configuration Step)

When you arrive at the Configuration step from the Analysis step, the model first runs a calculation to get the importance of the price drivers, along with their interactions with each other and their hierarchies, and recommendations of dimensions for the segmentation. In this step, you can now set the parameters of the segmentation itself.

Select Segmentation Dimensions

The first section, Select segmentation dimensions, is a table of the dimensions available for the segmentation. The rank column display the result of the Segmentation Dimensions Recommendationportlet. If a dimension was not selected in the price drivers setup (Analysis step), its rank is null. Due to business concerns, you may want and you can use other dimensions. Check all the fields that you want to use for the segmentation. You can also drag and drop the lines of the input matrix to define the order of the segmentation levels. You must select at least one and up to twenty levels of segmentation. Note also that dimensions with null values cannot be selected as segmentation levels (to avoid issues at later stages).

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The first portlets, Feature Importance and Percent Importance, are related to the importance of the features. Importance is a measure of how good the feature is at predicting the optimization target (defined at the Definition step). Simply put, the higher the importance, the more the feature will accurately provide a good segmentation.

The importance is determined through feature permutation and is further enhanced for segmentation purposes. It retains its inherent randomness, ensuring that feature importance remains unchanged when recalculated with the same features selected. To enhance segmentation accuracy, natural noise is eliminated by assigning a value of 0 to features that lack real importance. Additionally, values are adjusted to prioritize features with lower cardinality for segmentation.

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Segmentation Threshold

The second section, Segmentation Thresholds, contains three minimum values. The segmentation tree will only build nodes that match all of these three thresholds.

Elasticity

The third section, Elasticity, lets you choose the elasticity model, either Sigmoidal or Exponential. This defines the kind of elasticity functions that will be fitted to each segment’s data to get the elasticity parameters. There is also a checkbox Calculate metrics based on elasticity. If true, then the next step will not only calculate the elasticity function but also the projected quantity, revenue, and margin if the optimal target metric value is used.

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Click the Continue button (top right) to go to the Segmentation step.

Set up Optimization Parameters (Segmentation Step)

When you arrive at the Segmentation step from the Configuration step, the model first runs a calculation to define the segmentation tree and all the segments. It can take a couple of minutes, depending on the size of the source data. This step is made of three tabs: Tree View, Indicators, and Optimization Setup.

Tree View

This is a dynamic view of the segmentation tree. You can expand and collapse it and get information about any segment.

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Indicators

This tab provides metrics and data that allow evaluating the pertinence of the segmentation results. There are five portlets:

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• Details by segment

• Segmentation overview

• Fitting of Elasticity

• Elasticity fit chart

• Elasticity fit by segment

Optimization Setup

The Optimization Setup tab allows you to define the way to provide an optimum for each segment. You define three global percentiles. It is possible to override these global values for some segments (see below).

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Override Percentiles for Selected Segments

If the global percentiles are not to be used on a specific segment, you can override them by checking the box Use percentile values from parameters table when present. Once it is checked, the values used will be the ones provided in the Parameter Table called Segments. Use the three dots at the top right of the model and then go to the Parameter Tables tab.

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Manage the Segmentation Results (Result step)

When you arrive at the Results step from the Segmentation step, the model first runs the optimization calculation of each segment, it may take some minutes, depending on the size of the model. Then four tabs are provided: Impact, Tree View, Recommendations and Evaluation.

Impact

This dashboard displays the optimization result for the strategy floor-target-ceiling. Refer to the paragraph https://pricefx.atlassian.net/wiki/spaces/ACC/pages/4599284034#How-the-Percentile-Values-Are-Used%3F for more explanations.

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• Segmentation level – All the transactions of the scope are aggregated at this level to provide the bar charts of the projected revenue and profit. The global overview and the profit potential matrix are not impacted by this input value.

• Overall Realization % – The optimization strategy is a best to have. You can simulate with this input the fact that only a certain percentage of the optimization target is reached. The value must be between 0 and 100 and will impact all the dashboard portlets.

Tree View

This view is the same as https://pricefx.atlassian.net/wiki/spaces/ACC/pages/4599284034#Tree-View but now more results are provided when clicking on a segment. The Price Recommendation section provides the score, target percentile, values of the optimization metric for the given percentiles, and projections of metrics based on the optimization strategy defined in the previous paragraph.

Recommendations

This tab provides the segments table with all the optimized values for each segment. In particular, the optimization values are provided for the revenue, quantity, and optimization metric.

Evaluation

This tab simulates a call of the evaluation of the model, which can be called from any other part of the partition (like price lists, or quotes). The goal is mainly for an advanced user to test the logics, or to ensure what the inputs and outputs of the model evaluation are.

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