What Does SAMPO Do?
SAMPO (an acronym for Sniffie’s Automatic Market Price Optimizer, and also a Finnish male name which is why SAMPO is referred to as “he” in our text) is a reinforcement algorithm. By telling SAMPO the outcome of the chosen price, SAMPO changes his opinion on that given price. The outcome can be viewed as pure profit or as profit per customer. Profit per customer is especially important in situations where the float of customers is not evenly distributed. If for example the number of customers is double during christmas time, also the amount of sold products can be roughly estimated to double. To separate the effect of price from the effect of the number of potential customers; profit per customer can be used.
This post is based on Sniffie´s new e-book “AI in pricing”. Read more about the book and download your own free copy!