Computer-implemented product valuation tool
First Claim
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1. A computer-implemented method of pricing an order for a product based on varying lead times during a specified time period, comprising:
- calculating, by a computer system, a set of values for a product over a range of available supplies of the product;
determining, by the computer system, a size Q of the order;
selecting, by the computer system, a set of order points during a time horizon, each order point having a lead time LT to the next order point;
for a first order point, calculating, by the computer system, an incremental production quantity as Q/LT, and calculating, by the computer system, revenue displaced by the incremental production quantity using the product values;
repeating the preceding act for each other order point;
calculating, by the computer system, an average displaced revenue; and
calculating, by the computer system, the price for the order, using the results of the preceding act.
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Abstract
A method of valuing products based on demand probabilities. Products are designed by identifying product components, and combining the components in various combinations to provide standard and non-standard products. Components are valued using an algorithm that considers demand probability as well as known prices of standard products. The component values are added to determine product values and may be used to make pricing and order fulfillment decisions.
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Citations
11 Claims
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1. A computer-implemented method of pricing an order for a product based on varying lead times during a specified time period, comprising:
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calculating, by a computer system, a set of values for a product over a range of available supplies of the product; determining, by the computer system, a size Q of the order; selecting, by the computer system, a set of order points during a time horizon, each order point having a lead time LT to the next order point; for a first order point, calculating, by the computer system, an incremental production quantity as Q/LT, and calculating, by the computer system, revenue displaced by the incremental production quantity using the product values; repeating the preceding act for each other order point; calculating, by the computer system, an average displaced revenue; and calculating, by the computer system, the price for the order, using the results of the preceding act. - View Dependent Claims (2, 3, 4, 5, 6)
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7. A computer-implemented method of pricing make-to-order products, comprising:
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assigning, by a computer system, a demand probability value to each of a plurality of products, each product having an associated delivery time and price; calculating, by the computer system, an expected revenue from the products for at least two available capacities, the expected revenue being a function of the demand probability values and the prices; and calculating, by the computer system, an asking price for each of the products as the difference between its expected revenue from successive available capacities. - View Dependent Claims (8, 9, 10, 11)
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Specification