Last Price (LP) engine

The Last Price (LP) engine generates summary metrics for every observed customer and product ID combination within a baseline time period.

Configuration

To configure this engine, adjust the following components.

Engine Parameters

To view the parameter settings for this engine, go to the Engine Parameters worksheet. Depending on your user permissions, the worksheet will resemble the following image.

The LP engine uses the Baseline_Periods parameter associated with the Action Type Id of LP. Baseline_Periods specifies the number of historical aggregation periods used to calculate this action type’s Baseline time period.

To view an action type’s Baseline time period, go to the Aggregated Time Periods worksheet. To update an action type’s Baseline time period, run the Prep Data and Update Time Periods worksheet action.

Volume Metric

To view the volume metric for this engine, go to the Sales IQ > Engine Config > Sales IQ Transactions Aggregated worksheet. Depending on your user permissions, the worksheet will resemble the following image.

The LP Volume Metric calculated column defines the volume metric used in the LP engine. The following default calculation uses revenue normalized with any applicable currency conversions. Update this calculation as needed.

(CASE WHEN ([Currency Conversion Rate] > 0)
THEN [Currency Conversion Rate]
ELSE 1
END)
* [Revenue]

Target Price Guidance

The LP engine output relies on target price guidance. For customer-specific price guidance, you can relate this guidance from any worksheet stored at the level of Customer + Product Id combinations.

Outputs

To view the results of running the LP engine, go to the LP Engine Output worksheet. Depending on your user permissions, the worksheet will resemble the following image.

This engine generates results for every Customer Id + Product Group combination. This worksheet contains the following metric fields:

• Baseline Volume—Total volume of the Baseline time period. The engine measures this volume in the LP Volume Metric.
• Baseline Quantity—Total quantity sold in the Baseline time period.
• Baseline Purchase Frequency—Ratio of the observed aggregation periods in the Baseline time period, to the total number of aggregation periods in the Baseline time period.
  For example,

  If the following conditions are met:

  • The Baseline time period includes 6 months total.
  • A given Customer Id + Product Group combination has observed transactions in only 2 of those 6 months.

  Then the Baseline Purchase Frequency is calculated as 2/6 = 0.33.

• Baseline Avg Margin—Average margin percentage of sales in the Baseline time period. The engine calculates this as the sum of Revenue minus Cost divided by the sum of Revenue during the Baseline time period.
• Baseline Avg Price—Average selling price during the Baseline time period. The engine calculates this as the sum of Revenue divided by the sum of Quantity during the Baseline time period.
• Last Sale Period—Most recent aggregation period with an observed transaction.
• Last Sale Period Avg Margin—Average margin percentage of sales in the Last Sale Period. The engine calculates this as the sum of Revenue minus Cost divided by the sum of Revenue during the Last Sale Period.
• Last Sale Period Avg Price—Average selling price during the Last Sale Period. The engine calculates this as the sum of Revenue divided by the sum of Quantity during the Last Sale Period.
• Last Price Ratio of Target—Ratio of the Last Sale Period Avg Price to the target price. Customer + Product Id combinations with a Last Sale Period Avg Price higher than the target price have a ratio greater than 1.0.
• Current—Last Sale Period Avg Price. Modify this calculated column as needed to capture the best measure of the “Current” state for any actions created.
• Target—Target price. Modify this calculated column as needed to capture the best measure of the “Target” state for any actions created.