Purpose

Price List Impact Simulation Accelerator intends to provide an easy way to benchmark impact of list price changes, using past transactions and a set of hypothesis in order to assess all metrics from the price waterfall, from revenue to profit. It is tied to Price Settings, as the process starts directly from a Price List or a LPG and a model is created to run the simulation from the hypothesis set by the user. The results are displayed through a set of dashboards and tables that can be reviewed in details in the model.

Outputs

The simulation provides a set of tables and dashboards to review the impact of the new list prices coming from Price Settings. The outputs of the simulation stay in the model, they are not pushed back to Price Setting.

Approach

The Price List Impact Simulation relies on the following steps:

1. Defining List Prices within Price Setting (either in List Prices or LPG).

2. When prices are all good, the simulation can be launched directly from Price Setting with the “Simulate Impact” button (available when the simulation is configured).

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3. Hypothesis of the simulation should be then defined, such as the period of transactions to consider in the simulation, the scope of the transactions with the transaction filter (e.g. a specific country, business unit…).

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4. The simulation starts and a model is created with the transaction scope and hypothesis. The Optimization Engine computes the simulation and the simulation is made available when all the calculations are over.

5. Dashboards and tables are available in the model, which can be accessed directly from Price Setting.

Limitations

• Custom waterfall and implementation – This accelerator relies on a standard waterfall that may differ from a company specific waterfall. So a custom waterfall is possible but requires additional effort, including setting up the Optimization Engine that is used for the simulation and mapping the fields of the dashboards

• Product scope – The simulation relies on past transactions as a starting point and a benchmark, so a product with no sales will not be part of the optimization. Also discontinued products may still part of the simulation.

• No predefined extension point – There is no out-of-the-box extension point defined for now. If you intend to add specific features, custom code should be written. (But then the accelerator becomes specific and it cannot be updated without extra effort to port those modifications.) Do not hesitate to report specific requirements and possible extension points to Pricefx.

• Data requirements – For details on the standard price waterfall see Default Waterfall Description (Optimization - Price List Impact Simulation).

• Out of scope:

  • Price Elasticity (may be added with additional customization, but not out-of-the-box)

  • Forecasts of sales