Determining a Price Premium for a Project

• US 20080235155A1
• Filed: 03/19/2007
• Published: 09/25/2008
• Est. Priority Date: 03/19/2007
• Status: Active Grant

• Current Assignee: Ent Services Development Corporation LP (DXC Technology Company)
• Original Assignee: Electronic Data Systems Corporation (Perspecta, Inc.)
• Inventors: Thywissen, John A.
• Granted Patent: US 8,332,331 B2
• Time in Patent Office: Days
• US Class Current: 705/400
• CPC Class Codes: G06Q 30/0283 Price estimation or determination
• CPC Class Codes: G06Q 30/04 Billing or invoicing

Abstract

In certain embodiments, a method for determining a price premium for a project includes accessing project information that includes values for one or more parameters of a project. The method further includes determining from the project information a project duration for the project, a time value of money for the project, a variability for the project, and an expected project price. A price premium for the project is generated according to the project duration, the time value of money, the variability value, and the expected project price, using an option-pricing mathematical model for financial instruments.

Claims

1. A method for determining a price premium for a project, comprising:

accessing project information comprising values for one or more parameters of a project;

determining from the project information a project duration for the project;

determining from the project information a time value of money for the project;

determining from the project information a variability for the project;

determining from the project information an expected project price; and

generating, according to the project duration, the time value of money, the variability value, and the expected project price, a price premium for the project using an option-pricing mathematical model for financial instruments.

2. The method of claim 1, wherein determining from the project information the variability value for the project comprises:

accessing stored historical information regarding past projects; and

comparing at least a portion of the values of the one or more parameters of the project information for the project to the historical information regarding the past projects to determine the variability value for the project.

3. The method of claim 1, wherein the option-pricing mathematical model comprises a variant of the Black-Scholes model.

4. The method of claim 1, wherein the option-pricing mathematical model comprises the following formulas:

5. The method of claim 1, wherein the expected price of the project is determined using SOFTWARE LIFECYCLE MANAGEMENT (SLIM).

6. The method of claim 1, wherein the project comprises one or more of the following:

a software services project;

a construction project; and

a manufacturing project.

7. The method of claim 1, wherein the values for the one or more parameters of the project information for the project were determined in response to a request for quote.

8. The method of claim 1, further comprising generating a total price for the project, the price comprising the sum of the generated price premium for the project and the expected project price.

9. The method of claim 1, further comprising displaying a form for gathering values for the one or more parameters.

10. Software for determining a price premium for a project, the software being embodied in a computer-readable medium and when executed operable to:

access project information comprising values for one or more parameters of a project;

determine from the project information a project duration for the project;

determine from the project information a time value of money for the project;

determine from the project information a variability for the project;

determine from the project information an expected project price; and

generate, according to the project duration, the time value of money, the variability value, and the expected project price, a price premium for the project using an option-pricing mathematical model for financial instruments.

11. The software of claim 10, operable to determine from the project information the variability value for the project by:

accessing stored historical information regarding past projects; and

comparing at least a portion of the values of the one or more parameters of the project information for the project to the historical information regarding the past projects to determine the variability value for the project.

12. The software of claim 10, wherein the option-pricing mathematical model comprises a variant of the Black-Scholes model.

13. The software of claim 10, wherein the option-pricing mathematical model comprises the following formulas:

14. The software of claim 10, wherein the expected price of the project is determined using SOFTWARE LIFECYCLE MANAGEMENT (SLIM).

15. The software of claim 10, wherein the project comprises one or more of the following:

a software services project;

a construction project; and

a manufacturing project.

16. The software of claim 10, wherein the values for the one or more parameters of the project information for the project were determined in response to a request for quote.

17. The software of claim 10, further operable to generate a total price for the project, the price comprising the sum of the generated price premium for the project and the expected project price.

18. The software of claim 10, further operable to display a form for gathering values for the one or more parameters.

19. A system for determining a price premium for a project, comprising:

a memory module operable to store project information comprising values for one or more parameters of a project; and

one or more processing units collectively operable to;

determine from the project information a project duration for the project;

determine from the project information a time value of money for the project;

determine from the project information a variability for the project;

determine from the project information an expected project price; and

generate, according to the project duration, the time value of money, the variability value, and the expected project price, a price premium for the project using an option-pricing mathematical model for financial instruments.

20. The system of claim 19, wherein the one or more processing units are operable to determine from the project information the variability value for the project by:

accessing stored historical information regarding past projects; and

comparing at least a portion of the values of the one or more parameters of the project information for the project to the historical information regarding the past projects to determine the variability value for the project.

21. The system of claim 19, wherein the option-pricing mathematical model comprises a variant of the Black-Scholes model.

22. The system of claim 19, wherein the option-pricing mathematical model comprises the following formulas:

23. The system of claim 19, wherein the expected price of the project is determined using SOFTWARE LIFECYCLE MANAGEMENT (SLIM).

24. The system of claim 19, wherein the project comprises one or more of the following:

a software services project;

a construction project; and

a manufacturing project.

25. The system of claim 19, wherein the values for the one or more parameters of the project information for the project were determined in response to a request for quote.

26. The system of claim 19, wherein the one or more processing units are further operable to generate a total price for the project, the price comprising the sum of the generated price premium for the project and the expected project price.

27. The system of claim 19, wherein the one or more processing units are further operable to display a form for gathering values for the one or more parameters.

28. A method for determining a price premium for a project, comprising:

accessing project information comprising values for one or more parameters of a project;

determining from the project information a project duration for the project;

building, based on the project information, a tree of actual project price scenarios for the project, each level of the tree associated with a time period for the project;

setting a return of the tree to a predetermined rate;

generating, according to the project duration and the tree of actual project price scenarios, a price premium for the project using the binomial method for financial instrument option pricing.

29. The method of claim 28, wherein the predetermined rate is a risk-free rate.