Aggregation of Discount

Question

I am trying to predict sales quantity of an item based on their attributes. Discount is one of those attributes. The problem is I am having different discounts in same period for same item .I need to consider sales for period wise i.e week .While aggregating I am facing problem

on differnt days item has different discounts. Case1: Some items are having large variations in discounts like(0% and 50%) Case2: some are having small variation like(40% and 49%).

-In case1 If we aggregate the discount and divide by sales quantity then there will be decrease of discount in one record and increase in another. - In case2 If we aggregate discounts and take average of that .It seems there is no large variations in discount by taking average.Which is not correct for first case.

In my data Sales is more sensitive to discounts.

Is there any way to get generalized discount to predict sales(with Random forest algorithm)?

Answer 1

Aggregate discount sequences are used to define the stacking logic for aggregate discounts. This logic can define:

• The order in which aggregate discounts are applied.
• Which aggregate discounts are mutually exclusive.
• Which aggregate discounts can be "stacked," or applied in conjunction with one another.

You can use aggregate discounts within a quote or an order only if they are part of an aggregate discount sequence. Therefore, you must define an aggregate discount sequence even if you have only one aggregate discount. An aggregate discount can be a part of many aggregate discount sequences.

Aggregate discount sequences are linked with price list and discount matrix line items (like volume discounts and attribute adjustments). At run time, the pricing procedure picks the aggregate discount sequence to be used and evaluates the aggregate discounts to be applied.

The order in which aggregate discounts are applied within an aggregate discount sequence can affect the resulting price. For example, if aggregate discount (a) gives a discount of $100, and aggregate discount (b) gives you 10% off the price of the product, the resulting price would be lower if aggregate discount (b) is applied before aggregate discount (a).

To apply all the aggregate discounts in a sequence, you attach the sequence to either a price list or a product with component line items. A sequence includes all the aggregate discounts that apply to one price list or to one product with components in a price list.

Use the following procedure to define the aggregate discount sequence. This task is a step in Process of Creating Aggregate Discounts.