Price elasticity and markdown optimisation model

Project Description

We discount on instinct at end of season and we have no idea whether a 30% markdown sold stock we would have sold anyway at 10%. We want elasticity estimated per category, and a markdown schedule that clears stock by a target date at the least margin sacrificed. The difficulty is confounding — we discount when things are not selling, so naive regression will tell us discounts reduce sales. Please say how you would handle that; it is the main thing we will judge proposals on. Three years of daily price and units by SKU.

Skills Required