Computer-implemented product valuation tool

• US 20070078790A1
• Filed: 09/20/2006
• Published: 04/05/2007
• Est. Priority Date: 11/19/1997
• Status: Active Grant

• Current Assignee: JDA Software Group Incorporated (RedPrairie Holding Incorporated)
• Original Assignee: i2 Technologies US Incorporated (Panasonic Holdings Corporation)
• Inventors: Kalyan, Vibhu
• Granted Patent: US 7,660,736 B2
• Time in Patent Office: Days
• US Class Current: 705/80
• CPC Class Codes: G06Q 10/02 Reservations, e.g. for tickets, services or events
• CPC Class Codes: G06Q 10/025 Coordination of plural reservations, e.g. plural trip segments, transportation combined with accommodation
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0206 Price or cost determination based on market factors
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

A method of valuing products based on demand probabilities. Products are designed by identifying product components, and combining the components in various combinations to provide standard and non-standard products. Components are valued using an algorithm that considers demand probability as well as known prices of standard products. The component values are added to determine product values and may be used to make pricing and order fulfillment decisions.

Claims

1-5. -5. (canceled)

6. A computer-implemented method of pricing an order for a product based on varying lead times during a specified time period, the method being performed using one or more processing units, the method comprising:

using one or more processing units, calculating a set of values for a product over a range of available supplies of the product;

using one or more processing units, determining a size Q of the order;

using one or more processing units, selecting a set of order points during a time horizon, each said order point having a lead time LT to the next order point;

for a first order point, calculating, using one or more processing units, an incremental production quantity as Q/LT, and calculating revenue displaced by the incremental production quantity using of the product values;

repeating the preceding step for each other order point;

calculating, using one or more processing units, an average displaced revenue; and

calculating, using one or more processing units, the price for the order, using the results of the preceding step.

7. The method of claim 6, wherein:

the product has multiple components; and

the method further comprises repeating all steps for each component and summing the results.

8. The method of claim 7, wherein calculating the price for the order comprises using one or more processing units for:

(a) assuming a beginning value for each component;

(b) for a first component, calculating prorated values, such that for each product using that component, a prorated value is calculated on that component by calculating the difference between the product price and a value of the product'"'"'s other components;

(c) calculating a component value as a function of the prorated values and the probability values;

(d) repeating steps (b) and (c) for all other components;

(e) determining whether the component values converge;

(f) if any component value does not converge, using the calculated component value as the beginning component value and repeating said steps (b) through (e) for that component; and

(g) summing the values of all the components.

9. The method of claim 6, wherein the displaced revenue is calculated by integrating a curve representing the set of product values.

10. The method of claim 6, wherein the displaced revenue is calculated as the difference between a total potential revenue, determined from the product values for all available supplies S and the total potential revenue for S-Q.

11. A computer-implemented method of pricing make-to-order products, the method being performed using one or more processing units, the method comprising:

using one or more processing units, assigning a demand probability value to each of a plurality of products, each Product having an associated delivery time and price;

using one or more processing units, calculating an expected revenue from the products for at least two available capacities, the expected revenue being a function of the demand probability values and the prices; and

using one or more processing units, calculating an asking price for each of the products as the difference between its expected revenue from successive available capacities.

12. The method of claim 11, wherein the expected revenue is calculated as a sum of products of the probability values and the prices.

13. The method of claim 11, wherein the expected revenue is calculated from a binary tree representing the probability values and the prices.

14. The method of claim 11, wherein the expected revenue is calculated for each product in response to a product control policy.

15. The method of claim 11, further comprising comparing, using one or more processing units, the asking price for different products at a given capacity.

16-19. -19. (canceled)