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Overview of the Optimization-Segmentation Model FunctionalityModel types include different models that perform scientific-based optimization. Pricefx offers a default Segmentation Negotiation Guidance model that helps to identify the performance drivers and offer offers the stretchceiling, target, and floor for the optimization driver. Below is a brief overview of the steps you need to take.
The Models are defined by the logic that is being copied to the partition that will be used for optimizing the values by Pricefx pricing science expert. Another standard logic that is Other standard logics are offered by Pricefx, besides the Segmentation Negotiation Guidance, is like Product Recommendation. It is another scientific-based method that helps to find the links between the products and bundle them for the optimization purposes. Your company may have different model types classes depending on the pricing optimization strategies.
Models include actual optimization models that are currently in use. This is also a working area for defining and running optimization. The models listed are related to your company’s optimization strategy.
Floor, Target, Stretch/ Ceiling–represents your goals with optimized measure.
The system opens all the boxes that represent the nodes of the segmentation tree. Each level of nodes corresponds to one dimension (segment) mentioned (the displayed picture may vary). Open as many dimensions as you need. Pick one segment and click on the top-right corner hierarchical icon. A detailed overview is displayed on the right side of the screen. Review the segment number created under the Tree Node section.
If you keep scrolling down, you will see the Transaction Histogram with values: Floor margin = 50%; Target margin = 66%; Stretch Ceiling margin = 90% Floor and Stretch Ceiling are always set by default on respectively 50th 10th percentile and 90th 70th percentile, whereas the target value can fluctuate. In the selected node/segment, the Target is set on the 60th percentile. Apply results in analytics and price managementIn standard scenarios, the values from the calculated model will be written in the price parameter table and later used to enrich the Datamart that was initially used for the model. You can also have a product-segmentation mapping table in Product Extensions to verify those suggestions. In the Segment Statistics section, you can see the margin, revenue, and pricing information for this specific segment, including the number of transactions included in the calculation for the segment. These results can be also displayed for different purposes in the Analytics and Dashboards. Click on the “Pricefx” icon in the top-left corner to go back to the Home page.
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Review Pricing Parameters Tables (DEPRECATED)
Pricing or Company Parameters are internal tables designed to store rules, conditions, and results for different Pricefx capabilities. For the Optimization and Negotiation Guidance models, these tables store the optimized results. For this example, you can see the segments created with the floor, target, and stretch ceiling values because of the segmentation process.
On the right side of the window, the system displays the tables associated to the Optimization process. Select any of the “Segments” parameters with active status:  You can see the segments created, and the score, floor, target, and stretch values stored. These values will be updated during the segmentation execution and the values will be pulled from the logic to be displayed in the Pricelists, Quotes, and Analytics.
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