OPTIMIZING PRODUCT PORTFOLIOS UNDER CUSTOMER CHOICE

• US 20130018700A1
• Filed: 07/14/2011
• Published: 01/17/2013
• Est. Priority Date: 07/14/2011
• Status: Active Application

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Ervolina, Thomas R., Ettl, Markus R., Ghosh, Soumyadip, Gresh, Donna Leigh, Oh, Sechan
• Application Number:
  US13/183,058
• Publication Number:
  US 20130018700A1
• Time in Patent Office: Days
• US Class Current: 705/7.31
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling

Abstract

A method and system are disclosed for managing configurable products via solving an optimization problem. In one embodiment, the method comprises collecting data from a software application and a user; formulating a set of constraints based on the collected data; defining the optimization problem by the set of constraints and an optimization objective; solving the optimization problem using the collected data, the set of constraints, the optimization objective and the objective function via mixed integer programming; and outputting a solution of the optimization problem.

Claims

1. A method for managing configurable products via solving an optimization problem having an objective function and a set of constraints, the method comprising:

collecting data from a software application and a user;

formulating the set of constraints based on the collected data, the set of constraints having a configuration provision constraint and a substitution rule constraint;

defining the optimization problem by the set of constraints and an optimization objective;

solving the optimization problem using the collected data, the set of constraints, the optimization objective and the objective function via mixed integer programming, including balancing a cost of a complex portfolio of products against a diminishing return for a large portfolio of products; and

outputting a solution of the optimization problem.

2. The method of claim 1, wherein the data collected from the application is non-user input comprising configuration data, configuration profit margins data, configuration demand forecast data, component manufacturing costs data and component inclusion costs data.

3. The method of claim 2, wherein the data collected from the user is user-input comprising component substitution preferences data and model parameters data.

4. The method of claim 3, wherein the set of constraints further comprises a portfolio complexity constraint and a status changes constraint.

5. The method of claim 4, wherein the set of constraints further comprises a supply constraint and a component supply forecast data.

6. The method of claim 5, wherein the optimization objective is to maximize a difference between a sum of revenue from a configuration sale with a base component and change in revenue due to a substitution of component and a component inclusion cost.

7. The method of claim 6, wherein the solving of the optimization problem is done via solving

26. The method according to claim 1, further comprising using a computer system, implementing an optimization problem solving program, to perform the solving the optimization problem and the outputting a solution of the optimization problem.

8. A computer program product for managing configurable products via solving an optimization problem having an objective function and a set of constraints, the computer program product comprising:

at least one tangible device readable by a processing circuit and having computer readable instructions tangibly embodied therein for execution by the processing circuit, said computer readable instructions, when executing, performing the following;

collecting data from a software application and a user;

formulating the set of constraints based on the collected data, the set of constraints having a configuration provision constraint and a substitution rule constraint;

defining the optimization problem by the set of constraints and an optimization objective;

solving the optimization problem using the collected data, the set of constraints, the optimization objective and the objective function via mixed integer programming, including balancing a cost of a complex portfolio of products against a diminishing return for a large portfolio of products; and

outputting a solution of the optimization problem.

9. The computer program product of claim 8, wherein the data collected from the application is non-user input comprising configuration data, configuration profit margins data, configuration demand forecast data, component manufacturing costs data and component inclusion costs data.

10. The computer program product of claim 9, wherein the data collected from the user is user-input comprising component substitution preferences data and model parameters data.

11. The computer program product of claim 10, wherein the set of constraints further comprises a portfolio complexity constraint, a status changes constraint, a supply constraint and a component supply forecast data.

13. The computer program product of claim 11, wherein the optimization objective is to maximize a difference between a sum of revenue from a configuration sale with a base component and change in revenue due to a substitution of component and a component inclusion cost.

14. The computer program product of claim 13, wherein the solving of the optimization problem is done via solving

12. (canceled)

15. A computer system for managing configurable products via solving an optimization problem having an objective function and a set of constraints, the system comprising:

a memory;

a processor in communications with the computer memory, wherein the computer system is configured for;

collecting data from a software application and a user;

formulating the set of constraints based on the collected data, the set of constraints having a configuration provision constraint and a substitution rule constraint;

defining the optimization problem by the set of constraints and an optimization objective;

solving the optimization problem using the collected data, the set of constraints, the optimization objective and the objective function via mixed integer programming, including balancing a cost of a complex portfolio of products against a diminishing return for a large portfolio of products; and

outputting a solution of the optimization problem.

16. The computer system of claim 15, wherein the data collected from the application is non-user input comprising configuration data, configuration profit margins data, configuration demand forecast data, component manufacturing costs data and component inclusion costs data.

17. The computer system of claim 16, wherein the data collected from the user is user-input comprising component substitution preferences data and model parameters data.

18. The computer system of claim 17, wherein the set of constraints further comprises a portfolio complexity constraint and a status changes constraint.

19. The computer system of claim 18, wherein the set of constraints further comprises a supply constraint and a component supply forecast data.

20. The computer system of claim 19, wherein the optimization objective is to maximize a difference between a sum of revenue from a configuration sale with a base component and change in revenue due to a substitution of component and a component inclusion cost.

21. The computer system of claim 20, wherein the solving of the optimization problem is done via solving

22. The computer system according to claim 15, wherein:

said data includes a product configuration and a component provision in a pre-determined time period and potential substitutes that can be used in which configurations;

the configuration provision constraint sets forth a base component of a product or valid substitutes thereof, and the substitution rule constraint defines a priority order in which components of a product configuration may be substituted over other components;

the optimization objective is profit-based, and said optimization problem includes a function representing a profit from sales of said provided configurations using said base component, and a correction factor adjusting for a difference in profit by using a substituted component;

the solving the optimization problem includes solving the optimization problem to determine a subset of components to be provided in a pre-determined time period and whether a product configuration should use one or more substitute components; and

the solution of the optimization problem comprises, in each time period, which component parts should be added or dropped from a product portfolio to maximize profit from sales of the configured products.

23. The computer system of claim 22, wherein the solution includes at least one of a component removal data, a component addition data, a component substitution decisions data, a configuration portfolio changes data, an optimal profits outlook data or a modified forecast of configuration demand data.

24. The computer system of claim 22, wherein said solving further comprising:

aggregating profit over all provided product configurations, over all a defined time periods;

aggregating with an appropriate discount factor representing a discounted price for a product configuration using a substitute component, which is between the price of the original product and the substitute; and

determining whether and which product configuration should be dropped in said each time period.

25. The computer system of claim 24, wherein the outputting further comprises determining in each time period, which component part should be added or dropped from the product portfolio in order to maximize profit from sales of the configured products, subject to a limit on the size of the portfolio in each period.