RPO: Min Margin Constraint Is Not Enforced when Applied without Max Margin Constraint
(Doc ID 2434799.1)
Last updated on FEBRUARY 03, 2019
Applies to:Oracle Retail Regular Price Optimization - Version 16.0.2 and later
Information in this document applies to any platform.
Price Optimization does not honor the Min/Max Margin rate rules correctly. The Min Margin constraint is not honored in isolation and only works when combined with the Max Margin. Max Margin constraint, however, is honored in isolation.
Steps to reproduce:
1. Setup 3 Items with 3 constraints defined as: Max Price, Min Margin and Max Margin. All the constraints with Priority 1.
2. Run Price Optimization.
3. System returns constraint violation on two of the Items as expected.
4. Reduce priority of the Max Price constraint to 2.
5. Run Price Optimization.
6. System successfully optimizes prices correctly indicating that the Max Price constraint was relaxed.
7. Remove the Max Margin constrain and return the Max Price constraint to priority 1.
8. Run Price Optimization.
9. System optimizes prices even though the Min Margin constraint is violated. The recommended prices do not follow the constraints defined, since a Min Margin constraint of 50% was defined for all Items and one of the Items had a Recommended GM% of 43.58% yet system returned a feasible optimization.
10. Remove the Min Margin constraint and apply the Max Margin constraint. Run optimization.
11. System successfully runs optimization meeting all constraints.
12. Remove the Min Margin constraint and apply a low Max Margin constraint of 25%.
13. Optimization fails as expected on Margin as well as Price constraint violation on one of the Items.
14. In summary the Min Margin constraint does not work by itself and only works when combined with the Max Margin. Max Margin works fine when used by itself.
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