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To do this, we apply the following two methods:

Volume adjustment function

Example for Specialty Monomers (CS):

• We start from the SHAP value of the volume (please refer to section 4 above).
  Each dot here represents a CPC and the x-axis (SHAP value of cpc_volume_log) goes from -0.09 to +0.06

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• Then, we adjust every comparable using the fit function.

Dashboard simulation tool

These steps are simulated in the "Volume adjustment simulations" tab of the Qlik dashboard for a better understanding based on real values of the chosen run (version).

To use the tab, you need to select a family and a CPC that will be used as a comparable. Then, you can enter the volume you want to adjust to. This simulates the volume of the target cpc.
By changing the volume, you can see how the volume adjusted price is affected.

Phosphate_Esters example (CS):

• The selected CPC has a volume of 1 600 and we are comparing to a 8 000 volume target.
  When adjusting, we expect to have an decrease in price since the target has a lower volume.
  
  
• The scatterplot on the left is a representation of all the CPCs of the family and their price variation due to volume (based on SHAP values from the first model).
  It is the same scatterplot as the one displayed above.
  
  
• The line chart on the right is the fit function for the family, originated from the scatterplot.
  
  
• X-axis (volumes) on both of the graphs are on a log scale to make it more readable and less prone to outliers.
  
  
• Y-axis (price variations) on both of the graphs are out of the scale and represent understandable price variations. That is why the scale is similar to the second scatterplot above, and not the first one.
  
  
• Our comparable CPC:
  • Has a volume of 1 600, which equals 3.2 in log10 scale.
  • Crosses the fit function at an adjustment value of 9.64%. 
    
    • This means that its volume increases its price by 9.64% compared to the family average.
    • This leads to a ratio of 109.64% (= 100% + 9.64%).
      
      
• Our target CPC(not defined since it works for any target with this volume) :
  • Has a volume of 8 000, which equals 3.9 in log10 scale.
  • Crosses the fit function at an adjustment value of -0.98%.
    • This means that its volume lowers its price by 0.98% compared to the family average.
    • This leads to a ratio of 99.02% (= 100% - 0.98%).
      
      
• To adjust our comparable to the target volume, we compute the ratio between the target value and the comparable value.
  • 99.02% / 109.64% = 90.31%
    
    
• In the end, this comparable will have its price decrease by 9.69% if we were to compare it with a target having a volume of 8 000.
  
  
• Its price goes from 7.73€ to 6.98€. The volume adjusted price decrease is 0.75€.

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This volume adjustment is applied on every comparable of every target CPC, no adjustment is applied on the target directly !

Group adjustment

We mentioned before the "cpc_volume_log" feature which is showing the volume of a CPC. We also have a feature named "group_volume_but_cpc_label" looking at the total volume of the customer group of the CPC, excluding volume of the CPC itself.

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