Apparatus and method for determining an optimum promotion plan for
merchandising of products for sale. A scenario/results processor enables
a user to prescribe an optimization scenario, and presents the optimum
promotion plan to the user, where the optimum promotion plan is
determined by execution of the optimization scenario. The demand engine
models relationships between potential prices of the products and market
demand for the products, where the potential prices correspond to
potential promotion events and potential supplier offers. The activity
based cost engine estimates demand chain costs for the products based
upon the market demand. The promotion optimization engine employs the
market demand and the demand chain costs to determine the optimum
promotion plan, where the optimum promotion plan maximizes a
merchandising performance figure of merit according to the optimization
scenario, and where the optimum promotion plan comprises a subset of the
promotion events and potential supplier offers.