Markdown Optimization
Lead Data Scientist / Technical Lead · H-E-B
Price-elasticity forecasting and a constrained optimizer that recommends multi-week discount schedules merchants adopt as-is.
- markdown revenue (latest benchmark)
- +11%
- demand curves
- 38-week
- retail channels
- 3
The problem
Markdowns are a trade-off between revenue, shrink and empty shelves, and they were set by rule of thumb across three retail channels.
What I built and led
- Led the price-elasticity component on Databricks/PySpark: an ensemble of XGBoost, LightGBM and AdaBoost with monotonic constraints, trained on four years of store-SKU POS history to produce 38-week demand curves.
- Led the optimization engine: a pruned combinatorial search over multi-week discount schedules that balances revenue against shrink and empty-shelf cost, with channel-specific weights, hard inventory caps and merchant guardrails.
- Delivered weekly recommendations that merchants typically adopt as-is, with overrides in the UI.
Results
- +11% markdown revenue (latest benchmark)
- 38-week demand curves
- 3 retail channels