Econometric optimization engine
First Claim
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1. A computer-implemented method for determining a preferred set of prices for a plurality of products, the method being implemented as a plurality of program instructions in a computer system, the method comprising:
- receiving, using the computer system, a plurality of demand coefficients;
receiving, using the computer system, known cost data including activity-based costs;
inputting, using the computer system, missing or incomplete cost data to give inputted cost data;
combining using the computer system, said known cost data with said inputted cost data to give a combined cost data set;
generating, using the computer system, a sales model from the plurality of demand coefficients;
generating, using the computer system, a cost model from the combined cost data set, and wherein the activity-based costs include variable costs and fixed costs, further wherein said cost model determines a total cost for each product in a given demand group in a given store for a given time period by computing a cost for each selected costing activity;
receiving, using the computer system, a set of actual prices;
initializing, using the computer system, a set of incumbent prices to the set of actual prices;
generating a local optimum by applying, using the computer system, the set of incumbent prices to the sales model and the cost model wherein the local optimum for the preferred set of prices maximizes profit; and
generating the preferred set of prices by applying, using the computer system, the local optimum prices to the sales model and the cost model in an iterative manner until the preferred set of prices is reached.
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Abstract
A preferred set of prices for a plurality of products, generally demand coefficients is provided. Cost data including activity-based costs is also received. A preferred set of prices that will provided a local optimum for the preferred set of prices which maximizes profit is then determined. In one embodiment, a sales model and a cost model are created. A plurality of rules is specified. The preferred set of prices is then determined based on the sales model, the cost model, and the plurality of rules.
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Citations
12 Claims
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1. A computer-implemented method for determining a preferred set of prices for a plurality of products, the method being implemented as a plurality of program instructions in a computer system, the method comprising:
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receiving, using the computer system, a plurality of demand coefficients; receiving, using the computer system, known cost data including activity-based costs; inputting, using the computer system, missing or incomplete cost data to give inputted cost data; combining using the computer system, said known cost data with said inputted cost data to give a combined cost data set; generating, using the computer system, a sales model from the plurality of demand coefficients; generating, using the computer system, a cost model from the combined cost data set, and wherein the activity-based costs include variable costs and fixed costs, further wherein said cost model determines a total cost for each product in a given demand group in a given store for a given time period by computing a cost for each selected costing activity; receiving, using the computer system, a set of actual prices; initializing, using the computer system, a set of incumbent prices to the set of actual prices; generating a local optimum by applying, using the computer system, the set of incumbent prices to the sales model and the cost model wherein the local optimum for the preferred set of prices maximizes profit; and generating the preferred set of prices by applying, using the computer system, the local optimum prices to the sales model and the cost model in an iterative manner until the preferred set of prices is reached. - View Dependent Claims (2, 3, 4, 5, 6)
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7. An apparatus for determining a preferred set of prices for a plurality of products, the apparatus comprising:
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an econometric engine configured to receive a plurality of demand coefficients and to generate a sales model from the plurality of demand coefficients; a financial engine configured to receive known cost data including activity-based costs and to impute missing or incomplete cost data to give imputed cost data, the financial engine also configured to combine said known cost data with said imputed cost data to give a combined cost data set, the financial engine further configure to generate a cost model from the combined cost data set, and wherein the activity-based costs include variable costs and fixed costs, further wherein said cost model determines a total cost for each product in a given demand group in a given store for a given time period by computing a cost for each selected costing activity; and an optimization engine configured to receive a set of actual prices and to initialize a set of incumbent prices to the set of actual prices, the optimization engine also configured to generate a local optimum by applying the set of incumbent prices to the sales model and the cost model wherein the local optimum for the preferred set of prices maximizes profit, the optimization engine further configured to generate the preferred set of prices by applying the local optimum prices to the sales model and the cost model in an iterative manner until the preferred set of prices is reached. - View Dependent Claims (8, 9, 10, 11, 12)
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Specification