Beyond the Basics: Pricing Tactics, Part Two

Combining inventory levels with remaining lifespan allows OEMs to execute yield-based pricing for specific parts or groups of parts. You can employ various analytical strategies to measure lifecycle stage, leveraging a number of attributes or variables depending on your data. For new items, we typically look at the born-on date or when it was first used in production. First use can actually be more telling because many new parts don’t face competition until 6-12 months after production. Simply look at duration since birth and assume that in that first time period, there wasn’t much competition—because all parts are under warranty and the aftermarket is still trying to develop alternatives.

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Photo Credits: Unsplash/Timothy Muza

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