Dealing with High and Low Gross Profit Outliers
The most obvious and easiest place for your team to start is to address the lowest gross profit outliers that are below the statistical floor. Your pricing managers can then tag these exceptions for management action or new sales negotiations.
You also need to identify the outliers in high gross profit transactions. While these don’t represent opportunities to pick up gross profit, they do skew the analysis. These high gross profit transactions pull the curve up giving you falsely high statistical target. Fortunately, epaCUBE doesn’t just eliminate these outliers, high or low, but instead gives you the ability to tag them, categorize them and mark them for future action. Recognizing situations where your gross profit is above your ceiling could present your sales team with opportunities to gain more share of wallet with those customers by reducing unacceptably high prices
Once these outliers are excluded from the optimization analysis, the remaining transactions can be analyzed to determine which kind of products can be adjusted upward by customer segment to ultimately shift the entire gross profit curve.