Resource Allocation Optimization (5.0.7)

Resource Allocation Optimization has been primarily designed for Marketing Mix Optimization.

It is a specific type of Target Dynamic Profile in which the to-be-simulated actions are set as Soft Evidence. These actions are constrained by the available resources, i.e. the overall budget set by the user.

The user can individually define costs for each variable, so their cumulative cost within the available resources can be computed.

The user defines cost on a per-unit basis. So, if the cost of one unit of TV MCAR was 1,000,000, a simulated action that increases TV MCAR by 0.1 would imply a cost of 100,000.

The following report illustrates the result obtained if we do not allow any increase in available resources, i.e. holding the budget fixed at the status quo. Consequently, the optimization would consist in first choosing an action that improves the target mean while saving resources at the same time, and reallocating the savings in favor of other variables