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Pricing Optimization Using R

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  • Alexandru CONSTÃNGIOARÃ
  • Gyula-Laszlo FLORIAN

Abstract

The proposed empirical research uses a sample of 199 records from automotive industry to analyze the characteristics of pricing optimization in this industry. R software is being employed to estimate an OLS model. The coefficient estimates from our OLS estimations were used to generate a linear demand function, with errors normally distributed and standard deviation given by historic data available for the analysis. Finally, we employ GGPLOT2 package to generate the visualization of revenues and profits corresponding to different price levels. Our approach provides management with insights into the measures and steps necessary to achieve the full potential of pricing optimization across products and customers. Besides policy implications for management, our research underlines the benefits of using a quantitative approach to offer management relevant information necessary to fundament an efficient price policy.

Suggested Citation

  • Alexandru CONSTÃNGIOARÃ & Gyula-Laszlo FLORIAN, 2019. "Pricing Optimization Using R," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(1), pages 142-149, November.
    • Handle: RePEc:rom:mancon:v:13:y:2019:i:1:p:142-149
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    References listed on IDEAS

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    Keywords

    price policy; pricing optimization; R; GGPLOT2;
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