Dynamic pricing system
First Claim
1. A system for dynamically pricing a product, the system comprising:
- means for collecting and storing data on past and current sales;
means for forecasting normalized future sales volume based upon the past sales data;
means for forecasting normalized future sales volume based upon the past sales data;
means for determining price sensitivity of consumers to changes in price of the product based upon past data, wherein the means for determining price sensitivity uses a logistic mathematical model that comprises a price sensitivity function;
FPS(P)=0.2*{1−
[Arc-Tan(α
*(Pfinal–
PREF))*2/Pi]},whereinPref is a reference price Pref,Pfinal is final price, andα
is empirically determined according to the past and current sales data;
means for forecasting future sales volume at different prices by adjusting the normalized future sales volume forecast by the price sensitivity;
means for accepting user input to define for one or more strategic objectives,means for determining an optimal price according to the strategic objectives using the future sales volume forecast and costs for the product; and
means for evaluating the current sales at the optimal price and for using the evaluation to modify the optimal price according to the strategic objectives.
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Accused Products
Abstract
The present invention provides a dynamic pricing system that generates pricing recommendations for each product in each market. In particular, the system normalizes historic pricing and sales data, and then analyzes this historic data using parameters describing the user'"'"'s business objectives to produce a pricing list to achieve these objectives. The system uses historical market data to forecast expected sales according to a market segment, product type, and a range of future dates and to determine the effects of price changes on the forecasted future sales. The system further calculates unit costs for the product. The system then estimates profits from sales at different prices by using the sales forecasts, adjusting these sales forecasts for changes in prices, and the costs determinations. The system optionally optimizes prices given current and projected inventory constraints and generates alerts notices according to pre-set conditions.
225 Citations
34 Claims
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1. A system for dynamically pricing a product, the system comprising:
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means for collecting and storing data on past and current sales; means for forecasting normalized future sales volume based upon the past sales data; means for forecasting normalized future sales volume based upon the past sales data; means for determining price sensitivity of consumers to changes in price of the product based upon past data, wherein the means for determining price sensitivity uses a logistic mathematical model that comprises a price sensitivity function;
FPS(P)=0.2*{1−
[Arc-Tan(α
*(Pfinal–
PREF))*2/Pi]},wherein Pref is a reference price Pref, Pfinal is final price, and α
is empirically determined according to the past and current sales data;means for forecasting future sales volume at different prices by adjusting the normalized future sales volume forecast by the price sensitivity; means for accepting user input to define for one or more strategic objectives, means for determining an optimal price according to the strategic objectives using the future sales volume forecast and costs for the product; and means for evaluating the current sales at the optimal price and for using the evaluation to modify the optimal price according to the strategic objectives. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14)
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15. A method of dynamically pricing a product, the method
comprising the steps of: -
accepting and storing one or more strategic objectives from a seller; collecting data on past sales; forecasting normalized future sales volume based upon the past sales data; determining price sensitivity of consumers to changes in price of the product based upon the past sales data, wherein the step of determining price sensitivity uses a logistic mathematical model that comprises a price sensitivity function;
FPS(P)=0.2*{1−
[ArcTan(α
*(Pfinal–
PREF))*2/π
]},wherein PREF is a reference price, Pfinal is final price, and α
is empirically determined according to the past and the current sales data;
nforecasting future sales volume at different prices by adjusting the normalized future sales volume forecast by the price sensitivity; determining an optimal price according to the strategic objectives using the future sales volume forecast and costs for the product; selling the product at the optimal price; collecting current sales data on sales of the product at the optimal price in real time; repeating in real time said steps of forecasting normalized future sales volume, determining price sensitivity of consumers, and forecasting future sales volume at different prices using said past and current sales data; and updating the optimal price according to the strategic objectives using the future sales volume forecast for past and current sales and costs for the product. - View Dependent Claims (16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33)
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34. A program storage device readable by a machine, tangibly
embodying a program of instructions executable by a machine to perform method steps for dynamically determining a price a product, said method steps comprising: -
accepting and storing one or more strategic objectives; collecting data on past sales; forecasting normalized future sales volume based upon the past sales data; determining price sensitivity of consumers to changes in price of the product based upon the past sales data using a price sensitivity function, wherein the method step of determininc price sensitivity uses a price sensitivity function;
FPS(P)=0.2*{1−
[ArcTan(α
*(Pfinal–
PREF))*2/π
]},wherein PREF is a reference price, Pfinal is final price, and α
is empirically determined according to the past and the current sales data;forecasting future sales volume at different prices by adjusting the normalized future sales volume forecast by the price sensitivity; determining an optimal price according to the strategic objectives using the future sales volume forecast and costs for the product; collecting current sales data on the sales of the product at the optimal price; repeating said steps of forecasting normalized future sales volume, determining price sensitivity of consumers, and forecasting future sales volume at different prices using said past and current sales data; and modifying said optimal price according to the strategic objectives using the future sales volume forecast for past and current sales and costs for the product.
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Specification