TessX Pricing Challenge
Leveraging AI for Optimal Car Pricing
Problem Statement
TessX is a car dealership with one main goal: to sell cars quickly and make a fair profit. But there’s a big problem. Pricing cars correctly is hard.
When Prices Are Too High
If a car is priced too high, buyers won’t be interested, and the car could stay unsold for months. This costs the dealership money in storage and maintenance.
When Prices Are Too Low
If a car is priced too low, it sells fast, but the dealership loses potential profit.
The Current Approach
Right now, the team at TessX uses their experience, intuition, and basic calculations to set prices. This is a manual process that takes a lot of time and effort. Mistakes can happen, and they can be expensive.
Project Goal
What if there was a better way to price cars? What if TessX could use data instead of guesswork?
That is the goal of this project: to build a tool that makes pricing smarter and more accurate.
How it works:
The team enters details like horsepower, make and other specifications into the app. A machine learning model analyzes the data and compares it to past sales. In seconds, the app recommends a fair, data-driven price that benefits both TessX and buyers.
The Bigger Impact:
This tool helps TessX sell cars faster without losing money, ensuring the business prices competitively, improves conversions, and ultimately drives growth. It makes pricing easier and less stressful for the team. It also builds trust with buyers by offering fair and transparent prices.
Key Insights from Exploring the Data
What we discovered by analyzing thousands of car sales
Charts are clickable for a larger view
1. What’s the Most Common Car Price?
2. What’s the Relationship Between Horsepower and MSRP?
3. How Do Car Prices Vary by Brand?
4. Which Body Types Have the Highest and Lowest Prices?
5. Which Drivetrain Offers the Best Value for Its Price?
6. Is There a Link Between Transmission and Engine Power?
7. Which Cylinder Type Delivers the Most Torque?
8. Is Engine Aspiration the Key to Better Fuel Economy?
App Preview
See how TessX AI Pricing Tool works in practice
Technical Details
This section is for statisticians, data scientists, or anyone who wants to see my code. Click the links below to explore different parts of the project:
Making the data ready for modeling and establishing baseline models.
View notebookBehind the Code
Join me as I introduce this project and explain the thought process behind it – no coding, just the core concepts and ideas that drove the solution:
Understanding the Problem
In this first video, I break down the car pricing challenge that TessX faces and outline my approach to solving it using data science.
More Videos:
Day 2: How Does Our AI Pricing App Work?
dive deeper into our pricing solution, showcase the AI Pricing App.
In this video, I dive deeper into our pricing solution, showcase the AI Pricing App, and tell the story behind it.