Data Science5 min read

Why demand models must be monotonic in price: A deep dive into model choice for markdown optimization

Understanding why prescriptive pricing models must respect the law of demand, and how this fundamental constraint shapes our choice between GLMs and machine learning approaches

Cyril Noirot

Lead Data Scientist

March 15, 2025

About the author

Cyril Noirot

Lead Data Scientist

Freelance data scientist. I design and ship decision systems — forecasting, pricing, marketing measurement, optimization — for teams making high-stakes calls.

From lifecycle limits to markdown rules: The product constraints behind retail profit optimization

Why retailers can't escape markdown pricing—a deep dive into the lifecycle, inventory, and pricing constraints that shape modern retail optimization strategies

Data Science7 min

Concavity and Network Flow in Profit Optimization: How Diminishing Returns Enable Efficient Solutions

Understanding why retail revenue functions are concave, how this property enables convex optimization, and the network flow interpretation that powers modern markdown pricing algorithms

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Markdown Pricing Optimization: Stochastic Programming for Retail

How retailers transform predictive demand models into prescriptive pricing decisions through stochastic programming, jointly optimizing markdown prices and inventory allocation under uncertainty

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