Make price elasticities measurable

Price changes do not tell a company much by themselves; the useful number is how much sales volume moves when the price moves. Economists call that price elasticity of demand, and the standard measure is the percentage change in quantity divided by the percentage change in price. (stlouisfed.org) That math is simple enough to do with records many companies already keep in enterprise resource planning systems, or ERP software. IBM defines ERP as software that manages and integrates business functions and workflows, while Oracle says it covers day-to-day activities including accounting, procurement, project management, supply chain, and manufacturing. (ibm.com) (oracle.com) That is the pitch vendors and analytics firms have been making in recent posts: stop treating pricing as a gut call and start measuring it from transaction data. Acumatica, SpencerMetrics, and ResearchSOIC each pointed to ERP or production-system inputs as the raw material for estimating which products lose volume fast after a price increase and which products keep selling. (x.com 1) (x.com 2) (x.com 3) The underlying idea is old microeconomics, but the timing is current. The U.S. Bureau of Labor Statistics said producer prices for final demand rose 4.0 percent in the 12 months ended March 2026, with goods up 4.9 percent and services up 3.7 percent. (bls.gov) In that setting, a company that raises prices without measuring elasticity can miss twice: it can cut volume too sharply on price-sensitive items, or leave money on the table on items customers treat as hard to replace. The St. Louis Fed says demand tends to be more elastic when buyers have more substitutes and more inelastic when goods are necessities or have stronger brand loyalty. (stlouisfed.org) Revenue is only part of the story, though. OpenStax notes that total revenue equals price times quantity, and whether a price increase lifts or cuts revenue depends on whether demand at that price is inelastic or elastic. (openstax.org) For operators, that still is not enough if costs are moving underneath the sale. Acumatica’s construction software pitch centers on reducing costs and delivering projects more profitably, and its product materials emphasize connected project and financial data rather than isolated price lists. (acumatica.com) That is why the newer pricing advice ties elasticity to job cost, spoilage, and waste data. SpencerMetrics describes its system as collecting real-time shop-floor productivity data for digital presses, which gives printers a way to compare what a job sold for with what it actually consumed in time and capacity. (spencerlab.com) The practical output is a short list, not a theory lesson: products that are “price-proof,” products that need lower prices to hold volume, and jobs that look profitable on paper but lose money once waste and overruns are counted. ERP systems already store many of the needed fields — orders, invoices, materials, labor, and purchasing — so the debate has shifted from data availability to whether companies use it. (ibm.com) (oracle.com) The thread running through these posts is that pricing is becoming a measurement problem instead of a meeting-room argument. When prices, volumes, and real costs sit in the same system, elasticity stops being a textbook ratio and starts acting like an operating metric. (x.com 1) (x.com 2) (x.com 3)