How to Use the Price Change Impact Simulation

What does the Simulation do?

• Compares multiple pricing scenarios side by side.
• Shows both short-term impact (next 2 weeks) and longer-term projections (up to 56 weeks).
• Lets you replace the system recommendation with your own tested price (via Manual Override) to see how it performs.
• Helps you make data-driven decisions, backed by forecasts and demand elasticity.

Things to Keep in Mind

• Simulation only works for SKUs where forecast and elasticity data is available.
• The Profit Optimization and Revenue Maximization price points are calculated using a mathematical model based on the observed relationship between price and demand. These prices are generated directly from the demand curve and are not restricted by predefined pricing limits.
• Because no explicit price boundaries are applied, the model may sometimes suggest relatively high prices for profit or revenue optimization. These outputs are designed to illustrate how a price influences financial outcomes, rather than to serve as a direct pricing recommendation.
• The simulation is intended to highlight trends and sensitivities - showing how changes in price may impact profit and revenue - so users can better understand the trade-offs involved in pricing decisions.
• In some cases, the suggested price may appear counter - intuitive (for example, less attractive than the current baseline). This typically reflects limitations in the available data or real-world business constraints that are not fully captured by the model.

Where to Find the Simulation

The simulation appears on the Product Description Page (PDP) for all SKUs.

• If full data (forecast + elasticity) is available, the widget shows complete tables and charts.
• If only partial or no data is available, the widget still appears and clearly marks unavailable metrics (e.g., units, revenue, profit, margin) as N/A.

What You’ll See

1. Scenario Comparison showing 4 scenarios:
   • Do nothing - keep current price.
   • Accept Recommendation - the system’s suggested price (or your manual override if entered).
   • Theoretical Profit Optimizing price - balance sales volume and margin to maximize profit.
   • Theoretical Revenue Maximizing price - sell more units and maximize revenue.
2. Graphs & simulation options
   1. Impact graph - quickly visualize the difference in units, revenue, and profit between the scenarios
   2. Datepicker options - check results for one, two or four weeks in the future
3. For each scenario the table columns show:
   • Price
   • Margin
   • Units predicted to be sold
   • Revenue
   • Profit
4. Aggregated View (for multiple SKUs)
   • Roll-up of units, revenue, profit across products or virtual channels.
   • If some SKUs have missing data, this is clearly indicated.

How to Use the Simulation

1. Review the baseline - start with the “do nothing” scenario.
2. Compare recommendations - check the system’s suggested price.
3. Test your own price - use the override option to enter a custom price, which will replace the recommendation and update the simulation.
4. Make your decision - choose whether to:
   • Accept the system recommendation,
   • Use your manual override, or
   • Apply insights to build a broader pricing strategy for similar SKUs.

Why It Matters

With the Price Change Impact Simulation, you can:

• Make pricing decisions with higher confidence of the results.
• Balance between revenue growth and profit optimization.
• Move from reactive pricing to data-driven strategy building.