Marrying Dynamic Pricing and Real-time Supply Chain

pricing and supply chainThe art of online pricing is a delicate one. It takes more than just comparing yourself to the competition and setting the price accordingly.

Instead, pricing algorithms must take into account a large set of parameters including competitor pricing and product availability, sales margins, price elasticity and indices, current and projected inventory, geography, weather, target groups, service levels, variance between online prices physical store pricing, etc.

Needless to say, no single pricing algorithm fits all. It must be adjusted to your unique business rules and environment in order to obtain the desired results.
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3 ways to improve supply chain agility

supply chainAbout 80% of supply and demand can be planned perfectly in advance. But how do you handle the remaining 20% that can never be predicted? The missed shipments, late materials supply, or the unexpected demand peak.

The answer is an agile supply chain. But what does that mean? Here are three ways to increase your supply chain agility.

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How to make rapid and right decisions during a supply chain disaster

supply chain disasterThe recent explosions in Tianjin China have been devastating, killing at least 114 people and injuring hundreds.

Beyond the dreadful loss of life, the explosions also demonstrated how unplanned events can disrupt commercial supply chains. A recent article in Automotive Logistics highlighted the effect of the 10,000 vehicles destroyed during the event on the automotive industry. All car manufacturers concerned are trying to assess the damage to their vehicles, identify which customer orders are affected, and evaluate the alternative supply possibilities and their related costs.

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Who wants a Real-Time Supply Chain?

Real-Time Supply ChainEveryone, it seems. Take Procter & Gamble. In a recent talk, Procter & Gamble’s SVP of Product Supply, mentioned they have created a “real-time instrumented supply chain,” which they believe could achieve an upside of 1-2% sales increase, 2-5% margin improvement, and 5-10% improvement in asset utilization.

Only several years ago companies updated their supply chain plans approximately once a month, whereas today forecasts and plans are adjusted twice a day for some product categories. Such frequent updates enable responding much faster to changing demand and allow implementing a more accurate resupply of products to stores.

Nevertheless, achieving a real-time supply chain is not trivial and typically involves revisiting the deployed technology stack.

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How long can CCPs afford to wait?

Clearing HouseTwo months ago the Basel Committee decided that banks will have to set aside less capital against trades through central clearing houses in a bid to encourage them to use their services. The aim is to make banks use the central counterparties (CCPs), making it easier for regulators to follow the flow of banks’ trades and exposures to each other.

This followed a joint statement by the European Central Bank and the Bank of England over the City’s clearing houses that finally agreed that Euro denominated transactions could be cleared outside the Eurozone whilst making a point that “CCP liquidity risk management remains first and foremost the responsibility of the CCPs themselves”1.

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Tackling the Look-through Challenges with In‑Memory Computing

Look Through ApproachIn the April 2015 edition of its Global Financial Stability Report, the IMF raised concerns about potential financial stability risks posed by the asset management industry, calling for regulatory scrutiny on a sector which intermediates 40% of the world’s financial assets. Whether under regulatory or client pressure, asset managers should consider the technology implications of a greater transparency in risk reporting sooner rather than later. This post will delve into the implications of the look-through approach from a data management standpoint, building the case for the use of modern in-memory aggregation technology to process massive amounts of highly granular data.

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Addressing FRTB challenges with in-memory computing

New FTRB rules will make life harder for banksIn a recent video blog published on March 18, Satyam Kancharla from Numerix* highlighted some of the issues introduced by the draft proposal of the Fundamental Review of the Trading Book (FRTB) run by the Basel Committee on Banking Supervision (BCBS). Among those challenges are the transition from Value-at-Risk to Expected Shortfall, the use of varying liquidity horizons, and revisions brought to the methodologies.

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Crowded Trades: Are Clearing Houses Immune From Systemic Risk?

Crowded Trades: Are Clearing Houses Really Immune Against Systemic Risk?The sudden decision by the SNB to remove the longstanding cap on the Swiss Franc against the Euro took markets by surprise, causing many casualties amongst the foreign exchange broker community. As stated by the Financial Times on January 19, “In one of the most damaging currency swings in the modern trading area, the Swiss Franc soared in value, leaving investment banks across the world with big losses and hitting foreign exchange brokers particularly hard”.
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How to make historical analysis work on real-time data

‘As of’ root cause analysis at any point in the pastHistorical data analysis is typically enabled using data duplication technologies. But is this method still valid today when users need to analyze historical data that’s moving fast and changing rapidly throughout the day? All we know is that in ActivePivot, we practically had to re-invent our core database to support the requirements of our customers who wanted to travel back in time and analyze large volumes of dynamic data.
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From Multi-Core to Many-Core: Do not delay in Making Your Java Application “NUMA-Aware”

NUMA Aware ApplicationIn the last post, I explained the difference between SMP and NUMA architectures as we enter the “many-core” era. I also asked the following question: “Is it reasonable to expect massive performance improvements when you run an existing application on new NUMA-enabled hardware?” The answer is yes. However, improved performance is not guaranteed and you must be prepared to rewrite the code of your application to get the best out of many-core hardware.
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