Book Image

The Art of Data-Driven Business

By : Alan Bernardo Palacio
Book Image

The Art of Data-Driven Business

By: Alan Bernardo Palacio

Overview of this book

One of the most valuable contributions of data science is toward helping businesses make the right decisions. Understanding this complicated confluence of two disparate worlds, as well as a fiercely competitive market, calls for all the guidance you can get. The Art of Data-Driven Business is your invaluable guide to gaining a business-driven perspective, as well as leveraging the power of machine learning (ML) to guide decision-making in your business. This book provides a common ground of discussion for several profiles within a company. You’ll begin by looking at how to use Python and its many libraries for machine learning. Experienced data scientists may want to skip this short introduction, but you’ll soon get to the meat of the book and explore the many and varied ways ML with Python can be applied to the domain of business decisions through real-world business problems that you can tackle by yourself. As you advance, you’ll gain practical insights into the value that ML can provide to your business, as well as the technical ability to apply a wide variety of tried-and-tested ML methods. By the end of this Python book, you’ll have learned the value of basing your business decisions on data-driven methodologies and have developed the Python skills needed to apply what you’ve learned in the real world.
Table of Contents (17 chapters)
Part 1: Data Analytics and Forecasting with Python
Part 2: Market and Customer Insights
Part 3: Operation and Pricing Optimization

Selecting the Optimal Price with Price Demand Elasticity

Price elasticity of demand measures how much a product’s consumption changes in response to price changes. A good is elastic if a price adjustment results in a significant shift in either supply or demand. If a price adjustment for the goods does not significantly affect demand or supply, it is inelastic. The elasticity of a product is impacted by the accessibility of an alternative. Demand won’t change as the price increases if the product is necessary and there are no suitable alternatives, making it inelastic.

In this chapter, we will learn about the following:

  • What is price elasticity and how it can be used to maximize revenue?
  • Exploring the data to determine pricing patterns and consumer behavior around them
  • Determining the demand curve for different products
  • Optimizing the price to maximize revenue for all items

In this case, we will use food truck sales data to analyze the impact...