Modeling a multifunctional firm operating in a competitive market with multiple brands

• US 6,044,357 A
• Filed: 05/05/1998
• Issued: 03/28/2000
• Est. Priority Date: 05/05/1998
• Status: Expired due to Term

• Current Assignee: Google LLC (Alphabet Inc.)
• Original Assignee: International Business Machines Corporation
• Inventors: Garg, Amit
• Primary Examiner(s): MacDonald, Allen R.
• Assistant Examiner(s): THOMPSON JR, FOREST
• Application Number:
  US09/073,175
• Time in Patent Office: 693 Days
• Field of Search: 705/10, 705/8, 705/28, 29/430
• US Class Current: 705/7.37
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• 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

Abstract

A computer-implemented method for merging product marketing control, and product inventory control, based on funds availability and funds allocation from the finance division. The computer-implemented method generates a segment-level consumer choice model for a plurality of competing brands, and aggregates that to a market-level consumer choice model. For each of a plurality of feasible marketing strategies, a brand-level demand is estimated, based on the consumer choice models. Based on a predetermined cost for each of the feasible marketing strategies, and on estimated revenues and estimated costs resulting from the corresponding estimated demand, a maximum profit yielding feasible strategy is determined.

Claims

1. A computer-implemented method for merged marketing management and inventory management, said method comprising the steps of:

(a) initializing a plurality of marketing mix variables, each of said variables representing marketing strategies for each of a plurality of brands of goods;

(b) initializing a plurality of cost factors corresponding to said plurality of marketing mix variables;

(c) initializing a plurality of inventory maintenance cost values and a plurality of sale price values, each of said pluralities corresponding to said plurality of brands;

(d) selecting a sub-plurality of marketing mix variables from said plurality of marketing mix variables;

(e) for each of a plurality of time periods;

(1) calculating an expected total cost of said select sub-plurality of marketing mix variables based on said plurality of cost factors,

(2) calculating an expected demand of each of a sub-plurality of said plurality brands based on said selected sub-plurality of marketing mix variables, and

(3) generating an expected total profit/loss value corresponding to said selected sub-plurality of market mix variables, based on said calculated expected demands, said plurality of sale price values, and said plurality of inventory maintenance cost values;

(f) selecting another plurality of marketing mix variables from a matrix of marketing mix variables;

(g) generating a plurality of said expected total profit/loss values by repeating steps (d) through (h) until a predetermined portion of said plurality of marketing mix variables is selected; and

(h) identifying which selected sub-plurality of marketing mix variables generates the largest of said expected total profit/loss values.

2. A computer-implemented method for merged marketing management and inventory management according to claim 1, further comprising steps of:

initializing an available cash value;

for each of said time periods, updating said available cash value based on said expected total profit/loss value corresponding to said selected sub-plurality of market mix variables calculated at step (3); and

determining, for each of said sub-plurality of marketing mix variables selected, a viability value for said selected sub-plurality based on said available cash value updated for each of said time periods.

3. A computer-implemented method for merged marketing management and inventory management according to claim 1, further comprising the step of generating stock orders based on said calculated expected demands.

4. A computer-implemented method for merged marketing management and inventory management, said method comprising steps of:

(a) initializing a plurality of marketing mix variables, each of said variables representing marketing strategies for each of a plurality of brands of goods;

(b) initializing a plurality of marketing cost factors corresponding to said plurality of marketing mix variables;

(c) initializing a plurality of inventory cost values, a plurality of order costs, and a plurality of sale price values, each of said pluralities corresponding to said plurality of brands;

(d) selecting a sub-plurality of marketing mix variables from said plurality of marketing mix variables, said selected sub-plurality corresponding to a sub-plurality of said plurality of brands;

(e) for each of a plurality of time periods;

(1) calculating a total expected cost of said selected sub-plurality of marketing mix variables based on said plurality of marketing cost factors,

(2) calculating an expected demand of each of said sub-plurality of brands based on said selected sub-plurality of marketing mix variables,

(3) calculating an expected total cash revenue value based on said calculated expected demands and said plurality of sale price values,

(4) calculating a base stock level for each of said sub-plurality of brands based on said calculated expected demands, said plurality of said inventory cost values, and said plurality of said order costs,

(5) calculating an expected total inventory cost value based on said calculated base stock levels and said plurality of inventory cost values,

(6) calculating an expected total order cost value based on said calculated base stock levels and said plurality of said order costs, and

(7) generating an expected total profit/loss value for said selected sub-plurality of marketing mix variables based on said expected total cash revenue, said expected total cost of said marketing mix variables, said expected total inventory cost value, and said expected total order cost value;

(f) selecting another sub-plurality of marketing mix variables from said plurality of marketing mix variables;

(g) generating a plurality of said expected total profit/loss values by repeating steps (d) through (h) until a predetermined portion of said plurality of marketing mix variables is selected; and

(h) identifying which sub-plurality of selected marketing variables generates the largest of said total profit/loss values.

5. A computer-implemented method for merged marketing management and inventory management according to claim 4, further comprising the step of generating stock orders based on said calculated expected demands.

6. A computer-implemented method for merged marketing management and inventory management according to claim 4, further comprising steps of:

initializing an available cash value;

for each of said time periods, updating said available cash value based on said expected total profit/loss value corresponding to said selected sub-plurality of market mix variables calculated at step (7); and

determining, for each of said sub-plurality of marketing mix variables selected, a viability value for said selected sub-plurality based on said available cash value updated for each of said time periods.

7. A computer-implemented method according to claim 4, wherein steps (d) and (e) are carried out in accordance with the following:

##EQU22## where j is the index of the brands at step (a), and F is said sub-plurality of brands,

t is the index of the plurality of time periods at step (b), and T is said number of time periods,

X_t is said selected sub-plurality of marketing mix variables,

X_1jt, for jε

F, is said plurality of sale price values, ##EQU23## is the expected total cost of said selected sub-plurality of marketing mix variables calculated at step (b1),

z_jt (X_t), for jε

F, is the expected demand of each of said sub-plurality of brands, at the t^th of said T time periods, calculated at step (b2), ##EQU24## is the expected total cash revenue value, at the t^th of said T time periods, calculated at step (b3),

S_jt for jε

F, is the plurality of base stock levels, at the t^th of said T time periods, calculated at step (b4), ##EQU25## is the expected total inventory cost value, at the t^th of said T time periods, calculated at step (b5), and ##EQU26## is the expected total order cost value, at the t^th of said T time periods, calculated at step (b6), and P is the sub-plurality of selected marketing variables generates the largest of said total profit/loss values.