Optimisation of simulated scenarios

Step 0: Choose starting scenario

Within the scenario you are looking to optimise, select Optimisation → Optimise.

Please note that all the settings within the simulator scenario (including the advanced settings) are used in optimisation function.

Step 1: Choose concepts

Step 1a: Tick the removable concepts

First, you tick on the product concepts that are possible to be removed by the optimisation function.

In this example, Granny's Mix can only remove its own product but not Orange Fox's. Their subborn competitor will never leave the market, so the Orange Fox's box is unchecked.

Step 1b: Tick the changeable attributes

Then, you specify whether the product attributes are possible to be changed during the optimisation function. Remember to uncheck the boxes for those attributes that you don't wish to change or cannot change.

Granny's Mix does not wish to change any product attributes other than price for the existing product. Thus, it checks only the price attribute.

Step 2a: Add or remove extras

The original concepts in step 1 are based on the initial scenario setting and may contain unchangeable attribute levels. If you wish to modify and test the concepts, you may add the concepts as extras in this step. These extras can be made up of combinations of any attribute level, and you can include as many extras in the optimisation wizard as you wish.

Granny's Mix intends to identify the next new product ideas based on existing product attributes and levels. Hence, it removes the default Orange Fox's extra and added seven extras based on attribute levels that it is ready to offer.

Step 2b: Tick the must-have extras

After adding the extras, you may check the boxes for those extras that must be present within the optimised simulator. Otherwise, keep the extras' boxes uncheck.

Currently, Granny's Mix only has one extra that must be included in the simulator and it ticks the extra's box.

Step 2c: Specify changeable attributes for the extras

For each extra, you may specify whether the attributes are to be varied by checking the boxes. There is no limitation on how many extras you can add. Feel free to add any concepts with various attributes.

Just remember, as indicated in the Granny's Mix's example, the concepts and extras need to have variation in attributes levels.

The objective function will look for what to maximise for the optimisation function.

You can specify your objective function by using the standard mathematical operators (i.e. +, -, *, /, ^) as well as built-in functions (i.e price, share, and sum).

Some practically useful objective functions are revenue, volume, and profit.

Step 4: Optimisation constraints

In the previous steps, you may include as many concepts and extras as possible into the optimisation function to avoid missing any possibility. This step allows you to specify the potential number of concepts in the final optimised scenario.

For instance, Granny's Mix specified nine product concepts (two original concepts and seven extras) but prefer to have the top two to five concepts in the optimised scenario. Hence, the optimisation constraints are from two to five in this scenario.

Step 5: Optimising

Take a break for few minutes while the powerful optimisation function works out the most optimised scenario for you.

Please note that the wizard uses a genetic search algorithm and hence:

• It takes a few minutes to put together the data and
• It may not always find the absolute optimal scenario

However, the optimisation function is more time-saving and accurate than manually changing the attributes and recalculating the simulator. It also serves as a solid foundation for the next experiment or new product development.

Step 6: Optimisation output

The optimal product combinations are here! There are two main sections of the output.

6a: The optimised scenario

The optimised scenario sits next to the baseline scenario. It lists out the most optimal concepts identified by the optimisation algorithm. Here, you can check the attribute levels of each concept. You can still change the colour, naming, and the attributes of the concepts if you wish to.

Granny's Mix's revenue optimising scenario removes its original concept by the optimisation algorithm and includes four extras instead. The optimised scenario also suggests all product concepts set at the price level of $1.90.

Step 6b: The optimised preference share and revenue projection simulator

Both the preference shares and revenue projections simulator show the baseline and optimised scenario side-to-side.

In this example, the revenue optimised simulator shows:

• The preference shares of Orange Fox decrease from 34.2% to 8.6% with revenue projections for 1,000 units offered lowered to $162.25 from $649.20 and
• The preference shares and revenue projections for the original concepts including None of the above are redistributed to the Granny's Mix extras.