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5 Rules and Strategies
Pricing rules and strategies are the foundation of Rules Based Regular Pricing. Every price recommendation generated by Rules Based Regular Pricing is the direct result of applying a defined set of N/F rules. Understanding how rules are constructed, how strategies combine rules, and how conflicts between rules are resolved is essential for configuring Rules Based Regular Pricing effectively and interpreting its recommendations.
You create rules and strategies for LPO from the Control and Tactical Center in the Oracle Retail AI Foundation Cloud Service. For further details, see the “Control and Tactical Center” chapter in the Oracle Retail AI Foundation Cloud Service User Guide.
What is a Pricing Rules?
A pricing rule is a specific business constraint or condition that LPO must respect when determining a recommended regular price. Each rule defines one constraint, for example, “the item’s list margin must not fall below 25%” or “the item’s price must be within $2 of the competitor’s price.”
Rules are built from two components:
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Rule Criteria define the scope of the rule: which items, locations, seasons, or pricing groups it applies to.
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Rule Values define the target or threshold the rule enforces, including numeric values, percentages, or reference prices.
Each rule value in the Control and Tactical Center is labeled F (Forecast-based) or N/F (NonForecast-based). Only N/F rules are used in Rules Based Regular Pricing. F rules in a strategy are automatically ignored during a Rules Based run.
- For the complete list of Regular Pricing rules and strategies, see Appendix: Regular Pricing Optimization Rules.
Rules Based Regular Pricing User Guide G58167-03 Copyright© 2026, Oracle and/or its affiliates.
| Regular a |
|---|
| Competitorand CPI E (9) |
| CostChange N/F @ |
| Objective F [1] |
| Inter-Item N/F 6 |
| Inter-Loc/PZ N/F [2] |
| MarginforGroup F [3] |
| Margin for Item F |
| Pack Pricing N/F 6 |
| Price Range N/F 0 |
| Revenue forGroup F [2] |
| RevenueforItem F (6) |
| PricingGroup N/F 8 |
| VolumeforGroup F [2] |
| VolumeforItem F6 |
5. Define Rule Values : Enter the numeric target or threshold. Set the Hard Constraint flag and Priority (1 to 100) as required.
6. Associate the rule with a strategy : Add it to DEFAULT_SET or to a new custom strategy.
7. Save and validate. The rule is applied in the next optimization run using this strategy.
Managing Conflicting Rules
Multiple N/F rules will often apply to the same item, location, and period simultaneously. LPO uses a structured framework to resolve conflicts and arrive at the best feasible recommendation.
Hard and Soft Constraints
Each rule is designated with additional hard or soft (priority) constraints to determine exactly which rule should be applied when multiple rules exist at the same level.
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Hard Rules : Strict, non-negotiable constraint. LPO always enforces hard rules regardless of any other rule. A price recommendation that would violate a hard constraint is rejected or adjusted. Example: a minimum margin floor of 10% set as Hard means LPO will never recommend a price below this margin, even to match a competitor price..
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Soft Rules : Flexible guideline. LPO tries to satisfy soft rules but can override them when necessary to meet a higher-priority constraint. Example: a competitor match rule suggests lowering a price, but if it conflicts with a Hard margin floor, LPO keeps the price above the margin threshold.
Rules Priority
When multiple soft rules conflict, LPO uses a numeric priority (1 = lowest, 100 = highest) to determine which rule takes precedence. Higher-priority rules are enforced first; lower-priority rules are relaxed as needed. Example: if margin protection is more critical than competitor alignment, assign the margin floor rule priority 90 and the competitor match rule priority 60.
Best Feasible Solution
When the optimization engine cannot satisfy all soft rules even after priority ranking, it returns the best feasible price: the price that minimizes the aggregate weighted violation across all soft rules. This ensures every item receives a recommendation. Violations are visible on the Results screen for analyst review.
Conflict Resolution Strategy
Table 5-2 5-2 Step - Action
| Step | Action |
|---|---|
| 1 | LPO identifies all N/F rules in the selected strategy applicable to the item, location, and period in scope. |
| 2 | Hard rules are evaluated first. Any price violating a hard constraint is excluded from consideration. |
| 3 | LPO evaluates all soft rules weighted by priority. The price satisfying the most soft rules is selected. |
Rules Based Regular Pricing User Guide G58167-03 Copyright© 2026, Oracle and/or its affiliates.
Table 5-2 (Cont.) 5-2 Step - Action
| Step | Action |
|---|---|
| 4 | If no price satisfies all constraints, Best Feasible Solution returns the price with the lowest weighted violation. |
| 5 | Violated rules are recorded and displayed on the Results screen for analyst review and action. |
Note
Rule conflicts are expected in many pricing scenarios. A conflict does not indicate an error. The optimization engine automatically evaluates hard constraints, soft constraints, and rule priorities to determine the Best Feasible Solution.
Rules Based Regular Pricing User Guide G58167-03 Copyright© 2026, Oracle and/or its affiliates.