Event revenue management system
First Claim
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1. A method for managing revenue for an event, the event having event parameters including timing, resource, and discount categories, the method comprising:
- a step for initializing forecasting parameters, wherein the forecasting parameter initialization step comprises creating a matrix comprising entries for each combinations of said timing, resource, and discount categories such that each row of the matrix is an allowable combination of each discount category, and wherein said timing categories comprising past and present future timing categories;
a step for aggregating historical data using the forecasting parameters to generate initial forecast statistics for said matrix entries, taking into account the event parameters, wherein the initial forecast statistics for each of said entries comprise a fractional build curve, final net forecast, and remaining demand forecast,wherein each of the fractional build curves for entries associated with future timing categories is generated by calculating a weighted average of one or more historical curves associated with relevant past timing categories, wherein the weighting for each of the historical curves and the fractional build curves are calculated by normalizing the historical curves found by α
*(1−
α
)(|j|−
1)} where α
is a predefined smoothing constant and j is a number of time periods between the timing period of the historical curve and the timing period of the fractional build curve, andwherein the final net forecast and remaining demand forecast for each of the entries is calculated using a booking curve comprising prior sales and forecasted net sales associated with each of the entries;
a step for forecasting demand by updating the initial forecast statistics based on current data; and
a step for optimizing pricing of the event, wherein said pricing optimization step comprises, defining a forecast mean for each of the entries representing the net remaining demand associated with the entries, setting a forecast variance for each of the forecast means, aggregating the forecast means for the entries associated with available discount categories, aggregating the forecast variance for the entries associated with available discount categories, calculate an average profit for each row by aggregating a profit per each of the discount category times the forecast mean for the discount category and dividing by the aggregated resource mean, and calculating the expected demand, expected profit, and marginal value for each row of the matrix, determining a maximum expected profit for each row using the expected demand, expected profit, and marginal value associated with that row, and identifying the row of entries producing a maximum expected profit.
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Abstract
The present invention provides an event revenue management system that calculates event pricing to manage revenue and to maximize profit from the event. In particular, the system uses event parameters, including timing, resource, and discount categories, and initializes forecasting parameters. The system aggregates historical data using the forecasting parameters to generate initial forecast statistics, taking into account the event parameters. It then forecasts demand by updating the initial forecast statistics based on current data and optimizes pricing and availability of the event based on the forecasted demand.
147 Citations
19 Claims
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1. A method for managing revenue for an event, the event having event parameters including timing, resource, and discount categories, the method comprising:
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a step for initializing forecasting parameters, wherein the forecasting parameter initialization step comprises creating a matrix comprising entries for each combinations of said timing, resource, and discount categories such that each row of the matrix is an allowable combination of each discount category, and wherein said timing categories comprising past and present future timing categories; a step for aggregating historical data using the forecasting parameters to generate initial forecast statistics for said matrix entries, taking into account the event parameters, wherein the initial forecast statistics for each of said entries comprise a fractional build curve, final net forecast, and remaining demand forecast, wherein each of the fractional build curves for entries associated with future timing categories is generated by calculating a weighted average of one or more historical curves associated with relevant past timing categories, wherein the weighting for each of the historical curves and the fractional build curves are calculated by normalizing the historical curves found by α
*(1−
α
)(|j|−
1)} where α
is a predefined smoothing constant and j is a number of time periods between the timing period of the historical curve and the timing period of the fractional build curve, andwherein the final net forecast and remaining demand forecast for each of the entries is calculated using a booking curve comprising prior sales and forecasted net sales associated with each of the entries; a step for forecasting demand by updating the initial forecast statistics based on current data; and a step for optimizing pricing of the event, wherein said pricing optimization step comprises, defining a forecast mean for each of the entries representing the net remaining demand associated with the entries, setting a forecast variance for each of the forecast means, aggregating the forecast means for the entries associated with available discount categories, aggregating the forecast variance for the entries associated with available discount categories, calculate an average profit for each row by aggregating a profit per each of the discount category times the forecast mean for the discount category and dividing by the aggregated resource mean, and calculating the expected demand, expected profit, and marginal value for each row of the matrix, determining a maximum expected profit for each row using the expected demand, expected profit, and marginal value associated with that row, and identifying the row of entries producing a maximum expected profit. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9)
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10. A method for managing revenue for a plurality of events, comprising:
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loading historical data and event information regarding each of the plurality of events, wherein the event information categories includes venue configuration, event, date and time, resource category, and discount category information; initializing forecasting parameters for each of the plurality of events; generating initial forecast statistics for each of the plurality of events by aggregating appropriate historical data using corresponding forecasting parameters, taking into account corresponding event information, wherein the initial forecast statistics comprise a fractional build curve, final net forecast, and remaining demand forecast for each of event information categories, wherein a fractional build curves associated with a future timing categories is generated by calculating a weighted average of a historical curves associated with a past timing categories, wherein the weighting for the historical curve and the fractional build curve are calculated by normalizing the historical curves found by α
*(1−
α
)(|j|−
1)} where α
is a predefined smoothing constant and j is a number of time periods between the timing period of the historical curve and the timing period of the fractional build curve,updating the initial forecast statistics for each of the plurality of events based on appropriate current data, wherein the updating step comprises forecasting demand for the each of the plurality of events; and optimizing pricing for each of the plurality of events wherein said pricing optimization step comprises a step for calculating the expected demand, expected profit, and marginal value each possible combinations of pricing categories for the events, determining a maximum expected profit for possible combinations of pricing categories using the expected demand, expected profit, and marginal value associated with that row, and identifying the combination of pricing categories producing a maximum expected profit. - View Dependent Claims (11, 12, 13, 14, 15, 16, 17, 18)
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19. A program storage device readable by a machine, tangibly embodying a program of instructions executable by a machine to perform method steps of managing event revenue, the event having event parameters including timing, resource and discount categories, the method steps comprising:
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initializing forecasting parameters, wherein the forecasting parameter initialization step comprises creating a matrix comprising entries for each combinations of said timing, resource, and discount categories such that each row of the matrix is an allowable combination of each discount category, and wherein said timing categories comprising past and present future timing categories; aggregating historical data using the forecasting parameters to generate initial forecast statistics for said matrix entries, taking into account the event parameters, wherein the initial forecast statistics for each of said entries comprise a fractional build curve, final net forecast, and remaining demand forecast, wherein each of the fractional build curves for entries associated with future timing categories is generated by calculating a weighted average of one or more historical curves associated with relevant past timing categories, wherein the weighting for each of the historical curves and the fractional build curves are calculated by normalizing the historical curves found by α
*(1−
α
)(|j|−
1)} where α
is a predefined smoothing constant and j is a number of time periods between the timing period of the historical curve and the timing period of the fractional build curve;forecasting demand by updating the initial forecast statistics based on current data; and optimizing pricing of the event, wherein said pricing optimization step comprises, defining a forecast mean for each of the entries representing the net remaining demand associated with the entries, setting a forecast variance for each of the forecast means, aggregating the forecast means for the entries associated with available discount categories, aggregating the forecast variance for the entries associated with available discount categories, calculate an average profit for each row by aggregating a profit per each of the discount category times the forecast mean for the discount category and dividing by the aggregated resource mean, and calculating the expected demand, expected profit, and marginal value for each row of the matrix, determining a maximum expected profit for each row using the expected demand, expected profit, and marginal value associated with that row, and identifying the row of entries producing a maximum expected profit.
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Specification
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Current AssigneeJDA Software Group Incorporated (RedPrairie Holding Incorporated)
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Original AssigneeManugistics Group Incorporated (RedPrairie Holding Incorporated)
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InventorsPyron, Nancy, Cohen, Jeremy S., Cao, George, Holmquist, Kirsten, Buckalew, Bill, Ye, Stanley, Mace, Andrew, Phillips, Robert L., Eldredge, Michael, Levett, Dave
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Primary Examiner(s)MEINECKE DIAZ, SUSANNA M
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Application NumberUS09/876,218Publication NumberTime in Patent Office1,929 DaysField of Search705/10, 705/400US Class Current705/7.35CPC Class CodesG06Q 10/06 Resources, workflows, human...G06Q 30/0206 Price or cost determination...G06Q 30/0283 Price estimation or determi...
