Modeling data used
The IBM® Omni-Channel Merchandising product leverages proven scientific models to isolate the price sensitivity at the different levels of the Price Response Analysis (SKU, Line, Demand Group, Category, Division).
By implementing individual price changes across a range of -50% to 50% change in 10% increments, the models predict the percent changes for the Unit Volume, Revenue, and Gross Margin metrics. These sensitivity calculations or elasticities are presented in the graphs of the Price Response Analysis tool.
Price Response Analysis requires data inputs that are calculated using the IBM® Omni-Channel Merchandising category level models. As a result, you can only view category information in Price Response Analysis that have existing models. Price Response Analysis is a unique part of the modeling system and must be run separately. The cadence of these runs may need to be more frequent than your actual remodels to take model changes into account that occur due to changes in assortment. However, the default is to run the Price Response Analysis over the same time horizon as the most recent modeling run, so the data displayed that gives an indication of model quality, such as the number of price changes, would match what is being leveraged by the model.