Turn on suggestions

Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.

Showing results for

- Home
- /
- SAS Communities Library
- /
- SAS Marketing Optimization: Scenario Modeling Tip #3

Options

- RSS Feed
- Mark as New
- Mark as Read
- Bookmark
- Subscribe
- Printer Friendly Page
- Report Inappropriate Content

- Article History
- RSS Feed
- Mark as New
- Mark as Read
- Bookmark
- Subscribe
- Printer Friendly Page
- Report Inappropriate Content

Views
1,307

**Scenario Modeling Tip #3:** Understand the role of ratio constraints in scenarios.

*Common confusion*: How does SAS Marketing Optimization interpret a ratio constraint? Remember that a ratio constraint is interpreted as a ratio of sums, not as a sum of ratios.

**Example**

The following expression represents a ratio constraint using the expected_profit and communication_unit_cost measures, where the sums are taken over all offers that are made.

Note that this is not the same as a sum of ratios, as in the following expression:

For the underlying marketing optimization problem, the ratio constraint is converted to the following linear constraint:

Σ (expected_profit – 0.3 x communication_unit_cost) ≥ 0.3

This transformation is valid only if the sum of the denominator measure (in this example, Σ communication_unit_cost) is positive. Therefore, use ratio constraints only when the values of the denominator measure are positive in order to guarantee that the sum is positive.

But is it feasible? Note that the zero solution is feasible for the linearized constraint even though it is undefined for the original ratio constraint. Therefore, for some scenarios, it might be better to not make any offers than to satisfy the ratio constraint. Then the Constraint Summary reports the ratio constraint as having a missing value. This situation is particularly common when the ratio constraint uses a communication filter or a customer filter, such that the solution still makes some offers, but not from the set of communications or customers that are included in the ratio constraint. Ratio constraints are interpreted as “if any offers are made, then they must satisfy this ratio.”

If you want to exclude the zero solution as a possibility (forcing offers to be made and forcing the ratio to be satisfied), include an additional constraint to require a minimum number of offers to be made, using the same communication filter and customer filter as in the ratio constraint.

**Note: **This post was adapted from Michelle Opp’s “Scenario Modeling Tips” document. For more information, see *SAS Marketing Optimization User’s Guide*.

**Don't miss out on SAS Innovate - Register now for the FREE Livestream!**

Can't make it to Vegas? No problem! Watch our general sessions LIVE or on-demand starting April 17th. Hear from SAS execs, best-selling author Adam Grant, Hot Ones host Sean Evans, top tech journalist Kara Swisher, AI expert Cassie Kozyrkov, and the mind-blowing dance crew iLuminate! Plus, get access to over 20 breakout sessions.

Data Literacy is for **all**, even absolute beginners. Jump on board with this free e-learning and boost your career prospects.

Article Labels

Article Tags