From the course: The Data Science of Retail, Sales, and Commerce

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Dynamic pricing

Dynamic pricing

From the course: The Data Science of Retail, Sales, and Commerce

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Dynamic pricing

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- [Instructor] Think about the last time you bought a ticket for a trip on an airplane. You know of course that the prices depend on whether you're flying coach or business class and they depend on the day of the week, and the time of the day that you want to travel, but you've probably also noticed that practice for the exact same flight on the exact same day can vary sometimes substantially depending on when you're checking the price. This is an example of dynamic pricing or price optimization. And while prices have historically been set by humans and may have been based on a limited number of variables because people can only do so much, modern algorithms make it possible to vary prices for commercial products almost constantly to respond to an incredibly wide range of factors. Some of the things that might go into it, for example, are supply and demand. Obviously where scarcity of supply and high demand have always been associated with higher prices, but something like the sales…

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