Walmart Inc.
Item-specific value optimization tool

Abstract:

Elasticity of a particular product is calculated based on product demand against various price points. Accurate product demand calculations are ensured by calculating the price journey of the product, with appropriate adjustments made for out of stock conditions and promotions and or discounts. The price journey data is then input into an impact estimation algorithm which allows calculation of demand elasticity accounting for various real-world factors impacting demand and elasticity, such as: price of a substitute or compliment, competitor price, weather, local events, calendar events, and other factors. This approach allows for superior price journey-based item-specific elasticity calculation, which allows for superior optimization of item price to maximize volume and profit.