Dynamic pricing based on shelf life of perishable goods

• US 20060277109A1
• Filed: 06/06/2005
• Published: 12/07/2006
• Est. Priority Date: 06/06/2005
• Status: Active Grant

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Kerth, Rainer, Murthy, Seshashayee, Venkatasubramaniam, Meenakshisundaram, Patel, Umeshchandra H.
• Granted Patent: US 7,885,855 B2
• Time in Patent Office: Days
• US Class Current: 705/20
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/201 Price look-up processing, e.g. updating
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G07F 9/02 Devices for alarm or indication, e.g. when empty; Advertising arrangements in coin-freed apparatus alarms or warning devices indicating the interruption of flow to be metered G07F15/10

Abstract

Methods and systems (200) for reducing losses related to perishables are disclosed. The perishables are grouped based on the use-by-date (UBD) and a quantity of at risk perishables are determined (210). A financial impact of the at risk perishables is calculated for each group (220). Pricing is dynamically determined for the perishables based on the financial impact and the UBD (230) and a price display is updated to indicate the pricing of the perishables (240).

Claims

1. A method of reducing losses related to perishables comprising:

determining a quantity of at risk perishables, wherein the perishables are grouped based on the use-by-date (UBD);

calculating a financial impact of the at risk perishables;

dynamically pricing the perishables based on the financial impact and the UBD; and

updating a price display to indicate the pricing of the perishables.

2. The method of claim 1, further comprising:

updating a point of sale (POS) terminal with the pricing of the perishables.

3. The method of claim 1, wherein the determining the quantity of at risk perishables comprises:

scanning a group of the perishables affixed with radio frequency identification (RFID) tags using a RFID reader to obtain UBD for each perishable;

grouping the perishables by UBD;

calculating the quantity at risk as;

H_n=A_n−

E,

where H_n is a quantity of the perishables that would have to be discarded if not sold by the UBD, A_n is a quantity on hand grouped by n^th UBD, and E is an average quantity of sales per day for the perishables.

4. The method of claim 1, wherein calculating the financial impact comprises:

calculating a loss of profit based on the quantity at risk, a retail price per perishable and a cost per perishable;

calculating a cos,t for the perishables not sold by the UBD; and

calculating a loss of revenue for the perishables not sold by the UBD.

5. The method of claim 1, wherein calculating the financial impact comprises:

performing the following algorithm;

I_n=H_n×

(F−

G)
J_n=H_n×

G
K_n=H_n×

F,

where G is a cost per perishable, F is the retail price of the perishable, H_n is a quantity of the perishables that would have to be discarded if not sold by the UBD, I_n is a loss of profit impact, J_n is a cost of the perishables if not sold by the UBD, and K_n is a loss of revenue if the perishables are not sold by the UBD.

6. The method of claim 5, wherein dynamically pricing the perishables comprises:

performing the following algorithm;

L_n=(H_n/A_n)×

100,
IF L_n>

=Z THEN
M_n=(G−

N/2)
ELSE
M_n=(G+(I_n−

I_n×

(L_n/100)/H_n))

where L_n is the percentage of quantity unlikely to be sold by the UBD, and n represents the nth group based on UBD, N is a cost of disposing of the perishable and M_n is the output price for the n^th group of the perishables based on UBD.

7. The method of claim 1, wherein dynamically pricing the perishables comprises:

determining an estimated percentage of the quantity at risk unlikely to be sold by the UBD; and

determining the price of the perishable based on a cost of the perishable less a percentage of a cost of disposing of the perishable, wherein the percentage can range from 10% to 100%, if an estimated percentage is equal to or exceeds a threshold value.

8. The method of claim 7, wherein dynamically pricing the perishables further comprises:

determining the price of the perishable based on a cost of the perishable plus a loss profit estimate times a percentage of quantity likely to be sold by the UBD, if the estimated percentage is less than the threshold value.

9. The method of claim 7, wherein the threshold value ranges between 1 and 99 percent.

10. The method of claim 1, wherein the perishables are at least one of food products, chemicals, pharmaceuticals, electronic components, and manufactured items.

16. The system of claim 1, wherein the logic configured to determine the quantity of at risk perishables comprises:

logic configured to receive information from a group of the perishables affixed with radio frequency identification (RFID) tags scanned using the RFID data gathering device to obtain UBD for each perishable;

logic configured to group the perishables by UBD;

logic configured to calculate the quantity at risk as;

H_n=A_n−

E,

where H_n is a quantity of the perishables that would have to be discarded if not sold by the UBD, A_n is a quantity on hand grouped by n^th UBD, and E is an average quantity of sales per day for the perishables.

11. A system comprising logic for reducing losses related to the perishables, logic comprising:

logic configured to determine a quantity of the at risk perishables, wherein the perishables are grouped based on the use-by-date (UBD);

logic configured to calculate a financial impact of the at risk perishables;

logic configured to dynamically price the perishables based on the financial impact and the UBD; and

logic configured to update a price display to indicate the pricing of the perishables.

12. The system of claim 11, further comprising:

logic configured to update a point of sale (POS) terminal with the pricing of the perishables.

13. The system of claim 11, further comprising:

a radio frequency identification (RFID) data gathering device operably coupled to the logic for reducing losses related to the perishables.

14. The system of claim 13, wherein the RFID data gathering device is at least one of a handheld RFID reader, a fixed RFID reader, and a shelf unit having an integrated RFID reader.

15. The system of claim 13 further comprising:

a controller operably coupled between the RFID data gathering device and the logic for reducing losses related to the perishables.

17. The system of claim 11, further comprising:

a remote server; and

an enterprise server in communication with the remote server, wherein the logic for reducing losses related to the perishables is located on at least one of the remote server and the enterprise server.

18. The system of claim 11, wherein the logic configured to calculate the financial impact includes logic to perform the following algorithm:

I_n=H_n×

(F−

G)
J_n=H_n×

G
K_n=H_n×

F

where G is a cost per perishable, F is the retail price of the perishable, H_n is a quantity of the perishables that would have to be discarded if not sold by the UBD, I_n is a loss of profit impact, J_n is a cost of the perishables if not sold by the UBD, and K_n is a loss of revenue if the perishables are not sold by the UBD and wherein the logic configured to dynamically price the perishables comprises is configured to perform the following algorithm;

L_n=(H_n/A_n)×

100,
IF L_n>

=Z THEN
M_n=(G−

N/2)
ELSE
M_n=(G+(I_n−

I_n×

(L_n/100)H_n))

where L_n is the percentage of quantity unlikely to be sold by the UBD, and n represents the n^th group based on UBD, N is a cost of disposing of the perishable and M_n is the output price for the n^th group of the perishables based on UBD.

19. A computer readable media embodying a method of reducing losses related to perishables, the method comprising:

determining a quantity of at risk perishables, wherein the perishables are grouped based on the use-by-date (UBD);

calculating a financial impact of the at risk perishables;

dynamically pricing the perishables based on the financial impact and the UBD; and

updating a price display to indicate the pricing of the perishables.

20. The computer readable media of claim 19, further comprising:

updating a point of sale (POS) terminal with the pricing of the perishables.