Method and system for analyzing inventory purchasing opportunities with respect to inventory health

• US 7,607,577 B1
• Filed: 12/12/2005
• Issued: 10/27/2009
• Est. Priority Date: 10/19/2005
• Status: Expired due to Fees

• Current Assignee: Amazon Technologies, Inc. (Amazon.com, Inc.)
• Original Assignee: Amazon Technologies, Inc. (Amazon.com, Inc.)
• Inventors: Yu, Gang, Allgor, Russell
• Primary Examiner(s): Labaze; Edwyn
• Application Number:
  US11/299,860
• Time in Patent Office: 1,415 Days
• Field of Search: 235/383, 235/375, 235/379, 235/385, 705/22, 705/28
• US Class Current: 235/383
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 20/203 Inventory monitoring

Abstract

A method and system for determining analyzing an inventory purchasing opportunity with respect to inventory health. A method may include receiving an offer to purchase units of an inventory item via a purchasing channel for a purchase price per unit; determining a rate of sales demand of the item; and determining a breakeven holding time of existing units of the item, where a cost of holding a unit until the breakeven holding time equals, within an equality threshold, a difference between a sales channel value and the offer purchase price. The method may additionally include determining a healthy inventory level of the item that exceeds a target inventory level by a function of the sales demand rate and the breakeven holding time, and, if a current inventory level of the item exceeds the healthy level, declining to purchase units of said inventory item for the purchase price.

Claims

1. A method, comprising:

receiving an offer to purchase units of an inventory item via a purchasing channel for a given purchase price per unit;

determining a breakeven holding time of existing units of said inventory item, wherein a cost of holding a given existing unit until said breakeven holding time equals, within an equality threshold, a difference between a sale value for sale of said given inventory item through a sales channel and said given purchase price specified by said offer;

determining a time rate of sales demand of units of said inventory item per unit of time;

determining a healthy inventory level of said inventory item, wherein said healthy inventory level exceeds a target inventory level by a function of said time rate of sales demand and said breakeven holding time;

in response to determining that a current inventory level of said inventory item exceeds said healthy inventory level, declining to purchase said units of said inventory item for said given purchase price;

wherein each of said receiving an offer, said determining a breakeven holding time, said determining a time rate of sales demand, said determining a healthy inventory level, and said declining to purchase is performed by one or more computers.

2. The method as recited in claim 1, wherein said time rate of sales demand is represented as an average rate of sales demand, and wherein said function includes a multiplicative product of said time rate of sales demand and said breakeven holding time.

3. The method as recited in claim 1, wherein said time rate of sales demand is represented as a continuous function in time, and wherein said function includes an integral of said continuous function bounded by said breakeven holding time.

4. The method as recited in claim 1, wherein said time rate of sales demand is represented as a discrete function in time, and wherein said function includes a summation of said discrete function bounded said breakeven holding time.

5. The method as recited in claim 1, further comprising purchasing a particular number of units of said inventory item in response to determining that said current inventory level of said inventory item does not exceed said healthy inventory level, wherein said particular number is less than or equal to a difference between said healthy inventory level and said current inventory level.

6. The method as recited in claim 1, wherein said cost of holding said given existing unit of said given inventory item includes a cost of storing said given existing unit.

7. The method as recited in claim 1, wherein said cost of holding said given existing unit of said given inventory item includes an economic cost of capital associated with a purchase price of said given existing unit.

8. A method, comprising:

receiving an offer to purchase units of an inventory item via a purchasing channel for a given purchase price per unit;

determining a breakeven holding time of existing units of said inventory item, wherein a cost of holding a given existing unit until said breakeven holding time equals, within an equality threshold, a difference between a sale value for sale of said given inventory item through a sales channel and said given purchase price specified by said offer;

determining a time rate of sales demand of units of said inventory item per unit of time;

determining a healthy inventory level of said inventory item, wherein said healthy inventory level exceeds a target inventory level by a function of said time rate of sales demand and said breakeven holding time;

in response to determining that a current inventory level of said inventory item exceeds said healthy inventory level declining to purchase said units of said inventory item for said given purchase price;

specifying a minimum profit margin associated with said inventory item;

determining a profit margin breakeven time of said inventory item, wherein a cost of holding a given unit of said inventory item until said profit margin breakeven time equals, within an equality threshold, a total available profit margin associated with said inventory item less said minimum profit margin; and

determining an optimized purchase quantity of units of said inventory item dependent upon a multiplicative product of said profit margin breakeven time and said time rate of sales demand of units of said inventory item;

wherein each of said receiving an offer, said determining a breakeven holding time, said determining a time rate of sales demand, said determining a healthy inventory level, said declining to purchase, said specifying a minimum profit margin, said determining a profit margin breakeven time, and said determining an optimized purchase quantity is performed by one or more computers.

9. The method as recited in claim 8, further comprising determining a total expected profit from sale of said optimized purchase quantity of units dependent upon an average of a first profit contribution associated with a first-sold one of said optimized purchase quantity of units and a second profit contribution associated with a last-sold one of said optimized purchase quantity of units.

10. The method as recited in claim 9, wherein said first profit contribution exceeds said second contribution by an accrued cost of holding said last-sold one of said optimized purchase quantity of units until said profit margin breakeven time.

11. The method as recited in claim 8, wherein said offer specifies a minimum purchase quantity of units of said inventory item, and wherein the method further comprises determining whether said minimum purchase quantity of units exceeds said optimized purchase quantity of units.

12. The method as recited in claim 11, further comprising purchasing said optimized purchase quantity of units in response to determining that said optimized purchase quantity of units exceeds or equals said minimum purchase quantity of units.

13. The method as recited in claim 11, further comprising declining said offer in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units.

14. The method as recited in claim 11, further comprising:

in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units, determining a counteroffer purchase quantity of units for which an expected profit associated with said counteroffer purchase quantity of units satisfies an acceptability criterion; and

presenting a counteroffer to said offer, wherein said counteroffer specifies said counteroffer purchase quantity of units.

15. The method as recited in claim 11, further comprising:

in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units, determining a counteroffer purchase price per unit for which an expected profit associated with said counteroffer purchase price per unit satisfies an acceptability criterion; and

presenting a counteroffer to said offer, wherein said counteroffer specifies said counteroffer purchase price per unit.

16. A computer-accessible medium comprising program instructions, wherein the program instructions are executable to:

receive an indication of an offer to purchase units of an inventory item via a purchasing channel for a given purchase price per unit;

determine a breakeven holding time of existing units of said inventory item, wherein a cost of holding a given existing unit until said breakeven holding time equals, within an equality threshold, a difference between a sale value for sale of said given inventory item through a sales channel and said given purchase price specified by said offer;

determine a time rate of sales demand of units of said inventory item per unit of time;

determine a healthy inventory level of said inventory item, wherein said healthy inventory level exceeds a target inventory level by a function of said time rate of sales demand and said breakeven holding time;

in response to determining that a current inventory level of said inventory item exceeds said healthy inventory level, indicate that said offer to purchase said units of said inventory item for said given purchase price should be declined.

17. The computer-accessible medium as recited in claim 16, wherein said time rate of sales demand is represented as an average rate of sales demand, and wherein said function includes a multiplicative product of said time rate of sales demand and said breakeven holding time.

18. The computer-accessible medium as recited in claim 16, wherein said time rate of sales demand is represented as a continuous function in time, and wherein said function includes an integral of said continuous function bounded by said breakeven holding time.

19. The computer-accessible medium as recited in claim 16, wherein said time rate of sales demand is represented as a discrete function in time, and wherein said function includes a summation of said discrete function bounded said breakeven holding time.

20. The computer-accessible medium as recited in claim 16, wherein said program instructions are further executable to indicate that a particular number of units of said inventory item should be purchased in response to determining that said current inventory level of said inventory item does not exceed said healthy inventory level, wherein said particular number is less than or equal to a difference between said healthy inventory level and said current inventory level.

21. The computer-accessible medium as recited in claim 16, wherein said program instructions are further executable to:

specify a minimum profit margin associated with said inventory item;

determine a profit margin breakeven time of said inventory item, wherein a cost of holding a given unit of said inventory item until said profit margin breakeven time equals, within an equality threshold, a total available profit margin associated with said inventory item less said minimum profit margin; and

determine an optimized purchase quantity of units of said inventory item dependent upon a multiplicative product of said profit margin breakeven time and said time rate of sales demand of units of said inventory item.

22. The computer-accessible medium as recited in claim 21, wherein said program instructions are further executable to determine a total expected profit from sale of said optimized purchase quantity of units dependent upon an average of a first profit contribution associated with a first-sold one of said optimized purchase quantity of units and a second profit contribution associated with a last-sold one of said optimized purchase quantity of units.

23. The computer-accessible medium as recited in claim 22, wherein said first profit contribution exceeds said second contribution by an accrued cost of holding said last-sold one of said optimized purchase quantity of units until said profit margin breakeven time.

24. The computer-accessible medium as recited in claim 21, wherein said offer specifies a minimum purchase quantity of units of said inventory item, and wherein said program instructions are further executable to determine whether said minimum purchase quantity of units exceeds said optimized purchase quantity of units.

25. The computer-accessible medium as recited in claim 24, wherein said program instructions are further executable to indicate that said optimized purchase quantity of units should be purchased in response to determining that said optimized purchase quantity of units exceeds or equals said minimum purchase quantity of units.

26. The computer-accessible medium as recited in claim 24, wherein said program instructions are further executable to indicate that said offer should be declined in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units.

27. The computer-accessible medium as recited in claim 24, wherein said program instructions are further executable to:

in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units, determine a counteroffer purchase quantity of units for which an expected profit associated with said counteroffer purchase quantity of units satisfies an acceptability criterion; and

indicate that a counteroffer to said offer should be presented, wherein said counteroffer specifies said counteroffer purchase quantity of units.

28. The computer-accessible medium as recited in claim 24, wherein said program instructions are further executable to:

in response to determining that said minimum purchase quantity of units exceeds said optimized purchase quantity of units, determine a counteroffer purchase price per unit for which an expected profit associated with said counteroffer purchase price per unit satisfies an acceptability criterion; and

indicate that a counteroffer to said offer should be presented, wherein said counteroffer specifies said counteroffer purchase price per unit.

29. The computer-accessible medium as recited in claim 16, wherein said cost of holding said given existing unit of said given inventory item includes a cost of storing said given existing unit.

30. The computer-accessible medium as recited in claim 16, wherein said cost of holding said given existing unit of said given inventory item includes an economic cost of capital associated with a purchase price of said given existing unit.

31. A system, comprising:

a system memory storing program instructions; and

a processor coupled to said system memory and configured to execute said program instructions, wherein said program instructions are executable to;

receive an indication of an offer to purchase units of an inventory item via a purchasing channel for a given purchase price per unit;

determine a breakeven holding time of existing units of said inventory item beyond an expected time of sale of said existing units, wherein a cost of holding a given existing unit until said breakeven holding time equals, within an equality threshold, a difference between a current sale value for sale of said given inventory item through a sales channel and said given purchase price specified by said offer;

determine a time rate of sales demand of units of said inventory item per unit of time;

determine a healthy inventory level of said inventory item, wherein said healthy inventory level exceeds a target inventory level by a multiplicative product of said time rate of sales demand and said breakeven holding time;

in response to determining that a current inventory level of said inventory item exceeds said healthy inventory level, indicate that said offer to purchase said units of said inventory item for said given purchase price should be declined.

32. A method, comprising:

receiving a web services request to analyze an offer to purchase units of an inventory item via a purchasing channel for a given purchase price per unit;

in response to receiving said web services request, determining a breakeven holding time of existing units of said inventory item, wherein a cost of holding a given existing unit until said breakeven holding time equals, within an equality threshold, a difference between a sale value for sale of said given inventory item through a sales channel and said given purchase price specified by said offer;

determining a time rate of sales demand of units of said inventory item per unit of time;

determining a healthy inventory level of said inventory item, wherein said healthy inventory level exceeds a target inventory level by a function of said time rate of sales demand and said breakeven holding time;

in response to determining that a current inventory level of said inventory item exceeds said healthy inventory level, generating a response to said web services request, wherein said response includes an indication advising to decline to purchase said units of said inventory item for said given purchase price;

wherein each of said receiving a web services request, said determining a breakeven holding time, said determining a time rate of sales demand, said determining a healthy inventory level, and said generating a response is performed by one or more computers.