---
title: Trade Promotion Optimization Planning — Input Variables and Constraints
description: Learn which variables and constraints Trade Promotion Optimization Planner considers when optimizing user-defined performance objectives.
image: https://download.riverlogic.com/hubfs/Blog_Images/Fotolia_85904555_Subscription_Monthly_M.jpg
---

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# Trade Promotion Optimization Planning — Input Variables and Constraints

During a recent meeting, with a client seeking to improve the planning and execution of trade promotions across their organization, I was asked, “Which variables and constraints does [TPO Planner](https://www.riverlogic.com/solutions/trade-promotion-optimization/)™ (trade promotion optimization) consider when optimizing user-defined performance objectives (e.g., volume, revenue, profit)?”

My answer highlights how TPO Planner uniquely enables what-if analyses regarding the variance of variables and constraints impacting and governing the productivity of trade promotion investments.

[Trade Promotion Optimization](https://www.riverlogic.com/solutions/trade-promotion-optimization/) considers the following variables:

- Non-promoted Retail Price (by product and customer with ability to specify seasonal variations)
- Non-promoted Demand Volume (by product and customer with ability to specify seasonal variations)
- Cost of Goods Sold (by product with ability to import from existing standard costing systems and/or River Logic’s Integrated Business Planning solution)
- Promotion Cost (fixed and variable costs including lump sum payments and off-invoice, bill-back and scan-down amounts, as well as promoted retail price)
- Promotion Performance (deal length, time frame for increased volume impact, time frame for forward-buy impact, volume lift index)

TPO Planner considers the following constraints:

- Promotion Budget (by customer and brand with ability to request incremental funds)
- Volume/Revenue Targets (by customer and brand with ability to specify minimum targets as ‘soft’ constraints while optimizing for profit)
- Promotion Rules (minimum and maximum frequency for all deal types, pre- and post-gap restrictions, seasonal validity, always/never promote together)
- Preferred/Blackout Time Periods (by customer, brand and product)

In the future, TPO Planner will also consider the following variables and constraints:

- Cross-promotion Elasticity (impact on base volume and lift indexes across multiple events, products, and customers)
- Capacity/Inventory Constraints (by product with ability to explore alternative sourcing options through River Logic’s Integrated Business Planner solution)

You May Also Enjoy Reading

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<https://download.riverlogic.com/blog/use-cases-for-prescriptive-analytics-in-sales-marketing>

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