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AI and product pricing

AI and product pricing - Microsoft Excel Tutorial

From the course: AI in Business Essential Training

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AI and product pricing

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- [Instructor] Optimization tools can be used in a variety of industries. Virtually any industry that has some pricing power can use some form of optimization. Where AI comes into play is in terms of figuring out what the right relationships are between our data points. I'm in the 03_06_Begin Excel file. Now what we've got here is data on the federal funds rate, real GDP, and quarterly GDP changes, over a span of roughly 30 years or so, all from the St. Louis Federal Reserve Bank. We've added to that fictional data on a particular product, its price, and then the gross profit for the firm. In our fictional scenario the firm in question has a base level of about 3,000 units each quarter. In addition to that, though, they're impacted by the broader economy based on the equation we see here, and they're impacted based on their price. The higher the price is, the less in the way of units they sell. So one dollar increase in price causes them to lose 20 units for that particular quarter…

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