Automated system for generating procurement lists

• US 5,224,034 A
• Filed: 12/21/1990
• Issued: 06/29/1993
• Est. Priority Date: 12/21/1990
• Status: Expired due to Term

• Current Assignee: TTI Inventions C LLC (Intellectual Ventures LLC)
• Original Assignee: Bell Communications Research, Inc. (Telefonaktiebolaget LM Ericsson)
• Inventors: Sadrian, Amir A., Katz, Paul A.
• Primary Examiner(s): Envall, Jr., Roy N.
• Assistant Examiner(s): Brutman, Laura
• Application Number:
  US07/632,019
• Time in Patent Office: 921 Days
• Field of Search: 364/401, 364/225, 364/918, 364/918.1
• US Class Current: 705/7.36
• CPC Class Codes: G06Q 10/063 Operations research, analysis or management
• CPC Class Codes: G06Q 10/0637 Strategic management or analysis, e.g. setting a goal or target of an organisation; Planning actions based on goals; Analysis or evaluation of effectiveness of goals
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• CPC Class Codes: G06Q 10/0875 Itemisation or classification of parts, supplies or services, e.g. bill of materials
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising

Abstract

An automated system and concomitant methodology for minimizing the procurement costs of products and for generating a list of selected products based on the results of the minimization is disclosed for the Business Volume Discount regime. The system processing covers purchasing situations wherein multiple vendors offer a plurality of products and the vendors give discounts based on the total dollar amount of business received from the purchasers. The processing effected by the system utilizes a linear programming technique to solve a model of the business volume discount regime given a variety of constraints.

Claims

1. An automated method implemented on a computer system for generating product procurement requests by a purchaser under a business volume discount regime, the method comprising the steps of entering and storing in a product-price database of the computer system data representative of the costs of individual products supplied by vendors, the cost including commitment prices and as-ordered prices,

entering and storing in a discount database of the computer system data representative of the discounts applied to the products by each of the vendors on a commitment basis and an as-ordered basis,

inputting into the computer system by the purchaser a set of product requirements,

applying a prescribed mathematical algorithm, as implemented by a computer program stored in the computer system, to said set of product requirements, said algorithm including a mathematical relationship representative of a business volume decision purchasing model which utilizes said product-price database and said discount database, and

displaying on the computer system a list of selected ones of the products and costs along with associated vendors as determined from applying said mathematical algorithm.

2. The method as recited in claim 1 wherein said step of applying said prescribed algorithm includes the steps of

determining a cost function, including constraints, representative of the business volume discount regime and indicative of said mathematical relationship, and

minimizing said cost function with a linear programming solution technique.

3. An automated method implemented on a computer system for generating product procurement requests by a purchaser under a business volume discount regime, the method comprising the steps of

providing an input data screen to input product price data and discount price data by a user and storing said product price data and said discount price data in the computer system,

providing an input screen to input product requirements as stipulated by the user,

calculating an optimal purchasing strategy for the product requirements based on a business volume discount model utilizing said product price data and said discount price data, and

printing by the computer system a purchasing list as determined from the optimal purchasing strategy.

4. The method as recited in claim 3 further including the step of

displaying on the computer system said purchasing list.

5. The method as recited in claim 4 wherein said step of calculating includes the steps of

determining a cost function, including constraints, representative of the business volume discount regime, and

minimizing said cost function with a linear programming solution technique to obtain said optimal purchasing strategy.

6. An automated process implemented on a digital computer for producing a product procurement list from a product requirements list, the process comprising the steps of

prompting a user to input data into the digital computer relating to product price and discounts for each vendor of the products,

capturing product price and discount data as supplied by the user to the digital computer,

processing said product price data and said discount data with an algorithm defining a business volume discount model to generate an optimal purchasing strategy, and

producing by the digital computer a product purchase list based on the results of the processing step.

7. The method as recited in claim 6 further including the step of

displaying said product purchase list on the digital computer.

8. The process as recited in claim 7 where in said step of processing includes the steps of

determining a cost function, including constraints, representative of the business volume discount model, and

minimizing said cost function with a linear programming solution technique to obtain said optimal purchasing strategy.

9. A procurement processing system comprising

storing means for storing product price information and for storing product discount information,

input means for inputting product demands,

means for determining the optimal purchasing strategy for purchasing products under a business volume discount regime utilizing said product price information and said product discount information, and

output means for outputting a list of selected products based on the said optimal purchasing strategy as generated by said means for determining.