Reports
Optimising retail pricing under substitution effect
The report explains how advanced optimisation techniques, particularly mixed-integer programming combined with constraint programming, can be used to model and solve the substitution problem at scale. We focus on pricing decisions based on reliable demand forecasts that already include substitution effects across the full SKU range.
Most retailers lose profit not because prices are wrong, but because their own products steal sales from each other. This report introduces a linear programming framework that turns cannibalisation from a hidden margin killer into a controlled, optimisable variable, enabling smarter discounts across thousands of SKUs while keeping substitution in check.
Explore it to see how constraint-driven optimisation can unlock profit your current markdown strategy is leaving on the table. Following submission, the report will be provided via email.
The report explains how advanced optimisation techniques, particularly mixed-integer programming combined with constraint programming, can be used to model and solve the substitution problem at scale. We focus on pricing decisions based on reliable demand forecasts that already include substitution effects across the full SKU range.
Most retailers lose profit not because prices are wrong, but because their own products steal sales from each other. This report introduces a linear programming framework that turns cannibalisation from a hidden margin killer into a controlled, optimisable variable, enabling smarter discounts across thousands of SKUs while keeping substitution in check.
Explore it to see how constraint-driven optimisation can unlock profit your current markdown strategy is leaving on the table. Following submission, the report will be provided via email.
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