Customizing neural networks to suit price-response features
Whether or not we promote items or companies, all of us should put value tags on them. To search out optimum costs, we have to perceive how prospects reply to costs. A method to try this is utilizing price-response features. On this article, we are going to construct the operate with machine studying and use them to optimize pricing methods within the following order.
- Pricing Fundamentals : Clarify the regulation of provide and demand, and completely different price-response features
- Value-Response Perform with Machine Studying : Construct price-response features with neural community fashions
- Pricing Optimization : Discover the perfect value modifications by making use of optimizers to price-response features
We are going to use an instance dataset artificially created by this course of that imitates typical e-commerce information.
1. Pricing Fundamentals
Everyone knows provide and demand matter in pricing. Extra demand than provide results in greater value, and the opposite means round. We name it “the regulation of provide and demand”. The next is an instance to explain costs relative to calls for. This can be a quite simple “price-response operate”.