Enhancing pricing strategies in the aftermarket sector with machine learning

PurposeThis research explores the application of machine learning to optimize pricing strategies in the aftermarket sector, particularly focusing on parts with no assigned values and the detection of outliers. The study emphasizes the need to incorporate technical features to improve pricing accuracy and decision-making.Design/methodology/approachThe methodology involves data collection from web scraping and backend sources, followed by data preprocessing, feature engineering and model selection to capture the technical attributes of parts. A Random Forest Regressor model is chosen and trained to predict prices, achieving a 76.14% accuracy rate.FindingsThe model demonstrates accurate price prediction for parts with no assigned values while remaining within an acceptable price range. Additionally, outliers representing extreme pricing scenarios are successfully identified and predicted within the acceptable range.Originality/valueThis research bridges the gap between industry practice and academic research by demonstrating the effectiveness of machine learning for aftermarket pricing optimization. It offers an approach to address the challenges of pricing parts without assigned values and identifying outliers, potentially leading to increased revenue, sharper pricing tactics and a competitive advantage for aftermarket companies.