Product linking

Product linking allows a new product to be linked to an existing product so that the new product can be forecasted and optimized in pricing activities.

When a new product enters the assortment, it has no sales history for estimating the modeling coefficients used for the forecasts. Product linking provides a specific mechanism to assign demand elasticity and sales coefficients to new products based on the history of similar products.

Specifically, product linking directly copies the coefficients of an existing product ("mature") to a new product. The new product will then have the same sales share coefficients and the same demand elasticity coefficient as the mature product. You can also manipulate the share and sales effect that the new product will have on its Demand Group.

Product linking is used for one of two cases:
  • The new product is expected to be the same or very similar in expected sales/consumer response behavior to an existing or discontinued product in the Demand Group.
  • Direct replacement products in the same Demand Group. In order to ensure proper forecast of the combined sales of the new product and the existing ("mature") product, the existing product needs to be discontinued. Timing here is important.
Note: Discontinued, inactive products identified by the DemandTec by Acoustic OpenLink Product Status Resolver are also considered non-modeled products.

These attributes are copied from the modeled product to the linked new product:

  • Product locations - The locations that you select.
  • Retail price and cost - If the new product has no associated retail price and retail cost, these values are copied.
  • Coefficients - Coefficients for every selected location.

Products are linked until you manually unlink them, for example, for a modeling refresh in DemandTec by Acoustic OpenLink. The link status automatically becomes invalid if any of the following attributes change for the new product or for the modeled product:

  • Product category
  • DemandTec by Acoustic category (Model category)
  • Demand Group
  • Unit of measure
Note: For products that have expanded into new stores due to category resets or store remodels, the Expand Store Distribution task in the Task Scheduler allows administrators to schedule an automated process for copying the sales coefficients from the products in existing stores to new stores so that they can receive forecasts across the full set of stores in the Price application and Promotion Planning & Execution. An average of the sales coefficients in the modeling store group is copied to the new stores in the group.

In addition, here are some bits of information to keep in mind when using Expanded Store Distribution:

  • Your overall sales will not increase. The new stores will just get a share of the existing volume. This could possibly cause some under-forecasting with the new stores factored in.
  • If you remodel products after running Expanded Store Distribution, your new sales coefficients will overwrite the coefficients generated from the task. You would need to run the task again to copy your sales coefficients to any new stores.