Apparatus for merchandise promotion optimization

• US 7,130,811 B1
• Filed: 05/05/2001
• Issued: 10/31/2006
• Est. Priority Date: 05/05/2001
• Status: Expired due to Fees

• Current Assignee: International Business Machines Corporation
• Original Assignee: DemandTec Inc. (International Business Machines Corporation)
• Inventors: Lee, Hua, Neal, Michael, Parkin, Rob, Valentine, Suzanne, Venkatraman, Krishna, Delurgio, Phil
• Primary Examiner(s): MEINECKE DIAZ, SUSANNA M
• Application Number:
  US09/849,621
• Time in Patent Office: 2,005 Days
• Field of Search: 705/10, 705/400
• US Class Current: 705/14.43
• 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 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0201 Market modelling; Market analysis; Collecting market data
• CPC Class Codes: G06Q 30/0244 Optimization
• CPC Class Codes: G06Q 30/0283 Price estimation or determination

Abstract

Apparatus and method for determining an optimum promotion plan for merchandising of products for sale. A scenario/results processor enables a user to prescribe an optimization scenario, and presents the optimum promotion plan to the user, where the optimum promotion plan is determined by execution of the optimization scenario. The demand engine models relationships between potential prices of the products and market demand for the products, where the potential prices correspond to potential promotion events and potential supplier offers. The activity based cost engine estimates demand chain costs for the products based upon the market demand. The promotion optimization engine employs the market demand and the demand chain costs to determine the optimum promotion plan, where the optimum promotion plan maximizes a merchandising performance figure of merit according to the optimization scenario, and where the optimum promotion plan comprises a subset of the promotion events and potential supplier offers.

Claims

1. A method for optimizing a promotion plan for merchandising products, comprising:

utilizing a computer-based scenario/results processor within an optimization server to present a sequence of data entry templates to a user, whereby the user specifies an optimization scenario, wherein said utilizing comprises;

first providing a promotion event configuration template, for prescribing the potential promotion events;

second providing a supplier offer configuration template, for prescribing the potential supplier offers; and

third providing a promotion scenario configuration template, for associating the potential promotion events to the products, wherein said third providing comprises;

specifying a forward buy method;

enabling/disabling certain ones of the potential supplier offers;

adding rules and constraints to the optimization scenario; and

indicating store merchandising capacities;

within the optimization server, modeling the relationship between potential prices of the products and market demand for the products, wherein the potential prices correspond to potential promotion events and potential supplier offers;

within the optimization server, estimating demand chain costs for the products according to the modeled market demand, wherein the demand chain costs include fixed and variable costs for the products;

within the optimization server, employing the market demand and the demand chain costs to determine optimum promotion events and optimum supplier offers, wherein the optimum promotion events and optimum supplier offers maximize a merchandising performance figure of merit according to the optimization scenario; and

generating a plurality of optimization results templates and providing these templates to the user, wherein the optimum promotion events and optimum supplier offers are presented.

2. The method as recited in claim 1, wherein said utilizing comprises:

acquiring data corresponding to the optimization scenario from the user; and

formatting the data into a format suitable for performing a promotion plan optimization according to the optimization scenario.

3. The method as recited in claim 2, wherein said acquiring comprises:

obtaining the data from the user over a data network that employs a packet-switched protocol.

4. The method as recited in claim 3, wherein said acquiring further comprises:

employing TCP/IP protocol to obtain the data over the Internet.

5. The method as recited in claim 2, wherein the data is interactively provided by the user.

6. The method as recited in claim 2, wherein the data is acquired from a source electronic file that is designated by the user.

7. The method as recited in claim 1, wherein the data entry templates and the optimization results templates are generated in hypertext markup language (HTML).

8. The method as recited in claim 1, wherein the data entry templates and the optimization results templates are generated in extensible markup language (XML).

9. The method as recited in claim 1, wherein the data entry templates and the optimization results templates are generated as applets.

10. The method as recited in claim 1, wherein said utilizing comprises:

providing an optimization template, for specifying a promotion scenario and a time period for which the optimum promotion plan is to be determined.

11. The method as recited in claim 1, wherein said generating comprises:

providing an optimization results template, for supplying the user with scenario results corresponding to the optimization scenario, wherein the scenario results include selected ones of the potential promotion events and selected ones of the potential supplier offers.