Computer implemented system for estimating the demand dependent unit stockout cost of a consumer item at a location of a single period inventory system, stockout cost application therefor, and method therefor

• US 20040039664A1
• Filed: 08/26/2002
• Published: 02/26/2004
• Est. Priority Date: 08/26/2002
• Status: Active Grant

• Current Assignee: Oracle Technology Company (Oracle Corporation)
• Original Assignee: Oracle Demantra R&D Center Israel Ltd. (Oracle Corporation)
• Inventors: Mariamova, Sofia, Aronowich, Michael, Harel, Henry, Natan, Ofra
• Granted Patent: US 7,236,949 B2
• Time in Patent Office: Days
• US Class Current: 705/28
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders

Abstract

Computer implemented system for estimating the demand dependent unit stockout cost b_ij=b(λ_ij) of an i^th consumer item at a j^th location of a single period inventory system as a function of its unit retail price p_ij, its unit production cost c_ij, its unit return cost g_ij and its mean demand λ_ij, stockout cost application therefor, and method therefor.

Claims

1. Computer implemented system for estimating the demand dependent unit stockout cost b_ij=b(λ

_ij) of an i^th consumer item at a j^th location of a single period inventory system, the system comprising;

(a) a database for storing historical sales data of sales information of at least the i^th consumer item where i=1, 2, . . . , m at at least the j^th location where j=1, 2, . . . , n of the single period inventory system;

(b) a forecast engine for forecasting the mean demand λ

_ij of at least the i^th consumer item at at least the j^th location of the single period inventory system on the basis of the historical sales data;

(c) a unit cost file for storing the unit retail price p_ij, the unit production cost c_ij, and the unit return cost g_ij of at least the i^th consumer item at at least the j^th location of the single period inventory system; and

(d) a stockout cost application for estimating the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system as a function of its associated p_ij, c_ij, g_ij, and λ

_ij.

2. The system according to claim 1 wherein said stockout cost application determines the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b_ijCEST(λ

_ij,D_ij) thereat, and the cost of its conditional expected returns (c_ij−

g_ij)CER(λ

_ij,D_ij) therefrom.

3. The system according to claim 2 wherein said stockout cost application minimizes |b_ijCEST(λ

_ij,D_ij)−

(c_ij−

g_ij)CER(λ

_ij,D_ij)| for determining the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system.

4. The system according to claim 1 wherein the consumer item is a printed media publication.

5. Stockout cost application operating on at least one computer for estimating the demand dependent unit stockout cost b_ij=b(λ

_ij) of an i^th consumer item at a j^th location of a single period inventory system wherein;

the stockout cost application is operable to receive the unit retail price p_ij, the unit production cost c_ij, the unit return cost g_ij, and the mean demand λ

_ij of the i^th consumer item at the j^th location of the single period inventory system;

the stockout cost application is operable to estimate the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system as a function of its associated p_ij, c_ij, g_ij, and λ

_ij.

6. The stockout cost application according to claim 5 and operable to determine the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b_ijCEST(λ

_ij,D_ij) thereat, and the cost of its conditional expected returns(c_ij−

g_ij)CER(λ

_ij,D_ij) therefrom.

7. The stockout cost application according to claim 6 and operable to minimize |b_ijCEST(λ

_ij,D_ij)−

(c_ij−

g_ij)CER(λ

_ij,D_ij)| to determine the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system.

8. The stockout cost application according to claim 5 wherein the consumer item is a printed media publication.

9. Computer implemented method for estimating the demand dependent unit stockout cost b_ij=b(λ

_ij) of an i^th consumer item at a j^th location of a single period inventory system, the method comprising the steps of;

(a) storing historical sales data of the sales information of at least the i^th consumer item where i=1, 2, . . . , m at at least the j^th location where j=1, 2, . . . , n of the single period inventory system;

(b) forecasting the mean demand λ

_ij of at least the i^th consumer item at at least the j^th location of the single period inventory system on the basis of the historical sales data;

(c) receiving the unit retail price p_ij, the unit production cost c_ij, and the unit return cost g_ij, of at least the i^th consumer item at at least the j^th location of the single period inventory system;

(d) estimating the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system as a function of its associated p_ij, c_ij, g_ij, and λ

_ij; and

(e) communicating the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system.

10. The method according to claim 9 wherein step (d) includes determining the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b_ij CEST(λ

_ij,D_ij) thereat, and the cost of its conditional expected returns(c_ij−

g_ij) CER(λ

_ij,D_ij) therefrom.

11. The method according to claim 10 wherein step (d) includes minimizing |b_ijCEST(λ

_ij,D_ij)−

(c_ij−

g_ij)CER(λ

_ij,D_ij)| for determining the demand dependent unit stockout cost b_ij=b(λ

_ij) of the i^th consumer item at the j^th location of the single period inventory system.

12. The method according to claim 9 wherein the consumer item is a printed media publication.