What is price elasticity in SAP CA-DDF-RT - Demand Data Foundation for Retail?

SAP Term: price elasticity

• Component: CA-DDF-RT

• Component Name: Demand Data Foundation for Retail

• Description: The ratio of a percent change in unit sales to a percent change in price. The ratio indicates the degree to which the demand for a product location varies as a result of changing its price. Price elasticity is central to calculating demand. Understanding the differences in how strongly the demand for a product location is influenced by, or sensitive to, its price is essential for demand modeling and demand forecasting, the sales price being used as a demand influencing factor DIF.

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• Key Concepts: 
  Price elasticity is a measure of how sensitive the demand for a product or service is to changes in its price. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price. A product or service with a high price elasticity means that a small change in price will result in a large change in demand. 
  
  How to use it: 
  The CA-DDF-RT Demand Data Foundation for Retail component of SAP allows users to measure and analyze price elasticity. This component provides users with the ability to track changes in demand for products and services over time, as well as the ability to compare different products and services. This data can then be used to make informed decisions about pricing strategies. 
  
  Tips & Tricks: 
  When using the CA-DDF-RT Demand Data Foundation for Retail component of SAP, it is important to remember that price elasticity is not the only factor that affects demand. Other factors such as availability, quality, and customer preferences can also have an impact on demand. It is important to consider all of these factors when making pricing decisions. 
  
  Related Information: 
  For more information on price elasticity and how it can be used to inform pricing decisions, please refer to the SAP Help Portal or contact your local SAP representative.