Cost based dynamic pricing of goods

• US 7,885,855 B2
• Filed: 06/06/2005
• Issued: 02/08/2011
• Est. Priority Date: 06/06/2005
• Status: Expired due to Fees

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Kerth, Rainer, Murthy, Seshashayee, Venkatasubramaniam, Meenakshisundaram, Patel, Umeshchandra H.
• Primary Examiner(s): Gart; Matthew S
• Assistant Examiner(s): ADE, OGER GARCIA
• Application Number:
  US11/146,774
• Publication Number:
  US 20060277109A1
• Time in Patent Office: 2,073 Days
• Field of Search: 705 20- 28
• US Class Current: 705/20
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/201 Price look-up processing, e.g. updating
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G07F 9/02 Devices for alarm or indication, e.g. when empty; Advertising arrangements in coin-freed apparatus alarms or warning devices indicating the interruption of flow to be metered G07F15/10

Abstract

Methods and systems (200) for reducing losses related to perishables are disclosed. The perishables are grouped based on the use-by-date (UBD) and a quantity of at risk perishables are determined (210). A financial impact of the at risk perishables is calculated for each group (220). Pricing is dynamically determined for the perishables based on the financial impact and the UBD (230) and a price display is updated to indicate the pricing of the perishables (240).

Claims

1. A method of reducing losses related to perishable goods comprising:

determining a quantity of at risk perishables among said perishable goods, wherein the at risk perishables are grouped based on a use-by-date (UBD);

calculating a financial impact of the at risk perishables using a processor executing instructions, wherein said financial impact considers a cost of the perishable goods less a percentage of a cost of disposing of the at risk perishables, said cost of disposing of the at risk perishables being either a cost to discard the at risk perishables or a cost to return the at risk perishables back to a supplier;

storing said financial impact on a nontransitory computer readable media;

dynamically pricing the at risk perishables based on the financial impact and the UBD; and

updating a price display to indicate the pricing of the at risk perishables;

wherein the dynamically pricing the at risk perishables comprises performing the following algorithm;

L_n=(H_n/A_n)×

100

IF L_n>

=Z THEN

M_n>

=(G−

N/2)

where L_n is a percentage of quantity unlikely to be sold by the UBD, and n represents an n^th group of the at risk perishables based on the UBD, A_n is a quantity on hand grouped by n^th UBD, N is a cost of disposing of the at risk perishables, Z is a threshold for the percentage of quantity unlikely to be sold by the UBD, G is a cost per perishable good, and M_n is a minimum of an output price for the n^th group of the at risk perishables based on the UBD.

2. The method of claim 1, further comprising:

updating a point of sale (POS) terminal with the pricing of the at risk perishables.

3. The method of claim 1, wherein the determining the quantity of the at risk perishables comprises:

scanning a group of the perishable goods affixed with radio frequency identification (RFID) tags using a RFID reader to obtain the UBD for each of the perishable goods;

grouping the perishable goods by the UBD;

calculating the quantity of the at risk perishables as;

H_n=A_n−

E,

where H_n is a quantity the of the at risk perishables that would have to be discarded if not sold by the UBD, and E is an average quantity of sales per day for the perishable goods.

4. The method of claim 1, wherein calculating the financial impact comprises:

calculating a loss of profit based on the quantity at risk, a retail price per each of the perishable goods and the cost per each of the perishable goods;

calculating a cost for the at risk perishables not sold by the UBD; and

calculating a loss of revenue for the at risk perishables not sold by the UBD.

5. The method of claim 1, wherein calculating the financial impact comprises:

performing algorithms as follows;

I_n=H_n×

(F−

G)

J_n=H_n×

G

K_n=H_n×

F

where F is a retail price of each of the perishable goods, H_n is a quantity of the at risk perishables that would have to be discarded if not sold by the UBD, I_n is a loss of profit impact, J_n is a cost of the at risk perishables if not sold by the UBD, and K_n is a loss of revenue if the at risk perishables are not sold by the UBD.

6. The method of claim 1, wherein the dynamically pricing of the at risk perishables comprises:

determining an estimated percentage of the quantity of the at risk perishables unlikely to be sold by the UBD; and

determining the price of the at risk perishables based on the cost of the perishable goods less a percentage of a cost of disposing of the at risk perishables, wherein the percentage of a cost of disposing of the at risk perishables can range from 10% to 100%.

7. The method of claim 6, wherein the dynamically pricing of the at risk perishables further comprises:

determining the price of the at risk perishables based on a cost of the perishable goods plus a loss profit estimate times a percentage of quantity likely to be sold by the UBD, if the estimated percentage is less than a threshold value.

8. The method of claim 1, wherein the perishable goods are at least one of food products, chemicals, pharmaceuticals, electronic components, and manufactured items.

9. A system comprising logic for reducing losses related to perishable goods, logic comprising:

logic configured to determine a quantity of at risk perishables among said perishable goods, wherein the at risk perishables are grouped based on a use-by-date (UBD);

logic configured to calculate a financial impact of the at risk perishables, wherein said financial impact considers a cost of the perishable goods less a percentage of a cost of disposing of the at risk perishables, said cost of disposing of the at risk perishables being either a cost to discard the at risk perishables or a cost to return the at risk perishables back to a supplier;

logic configured to dynamically price the at risk perishables based on the financial impact and the UBD; and

logic configured to update a price display to indicate the pricing of the at risk perishables;

wherein said logic configured to dynamically price the at risk perishables performs the following algorithm;

L_n=(H_n/A_n)×

100,

IF L_n>

=Z THEN

M_n>

=(G−

N/2)

where L_n is a percentage of quantity unlikely to be sold by the UBD, and n represents an n^th group of the at risk perishables based on UBD, A_n is a quantity on hand grouped by n^th UBD, N is a cost of disposing of the perishable, Z is a threshold for the percentage of quantity unlikely to be sold by the UBD, G is a cost per perishable good, and M_n is a minimum of an output price for the n^th group of the at risk perishables based on the UBD.

10. The system of claim 9, further comprising:

logic configured to update a point of sale (POS) terminal with the pricing of the at risk perishables.

11. The system of claim 9, further comprising:

a radio frequency identification (RFID) data gathering device operably coupled to the logic for reducing losses related to the perishable goods.

12. The system of claim 11, wherein the RFID data gathering device is at least one of a handheld RFID reader, a fixed RFID reader, and a shelf unit having an integrated RFID reader.

13. The system of claim 11 further comprising:

a controller operably coupled between the RFID data gathering device and the logic for reducing losses related to the perishable goods.

14. The system of claim 9, wherein the logic configured to determining the quantity of at risk perishables comprises:

logic configured receive information from a group of the perishables affixed with radio frequency identification (RFID) tags scanned using the RFID data gathering device to obtain the UBD for each perishable;

logic configured to group the perishable goods by the UBD;

logic configured to calculate the quantity of the at risk perishables as;

H_n=A_n−

E,

where H_n is a quantity of the at risk perishables that would have to be discarded if not sold by the UBD, and E is an average quantity of sales per day for the perishables.

15. The system of claim 9, further comprising:

a remote server; and

an enterprise server in communication with the remote server, wherein the logic for reducing losses related to the perishable goods is located on at least one of the remote server and the enterprise server.

16. A nontransitory computer readable media embodying a method of reducing losses related to perishable goods, the method comprising:

determining a quantity of at risk perishables among said perishable goods, wherein the at risk perishables are grouped based on a use-by-date (UBD);

calculating a financial impact of the at risk perishables, wherein said financial impact considers a cost of the perishable goods less a percentage of a cost of disposing of the at risk perishables, said cost of disposing of the at risk perishables being either a cost to discard the at risk perishables or a cost to return the at risk perishables back to a supplier;

dynamically pricing the at risk perishables based on the financial impact and the UBD; and

updating a price display to indicate the pricing of the at risk perishables;

wherein the dynamically pricing the at risk perishables comprises performing the following algorithm;

L_n=(H_n/A_n)×

100,

IF L_n>

=Z THEN

M_n>

=(G−

N/2)

where L_n is a percentage of quantity unlikely to be sold by the UBD, and n represents an n^th group of the at risk perishables based on the UBD, A_n is a quantity on hand grouped by n^th UBD, N is a cost of disposing of the at risk perishables, Z is a threshold for the percentage of quantity unlikely to be sold by the UBD, G is a cost per perishable good, and M_n is a minimum of an output price for the n^th group of the at risk perishables based on the UBD.

17. The nontransitory computer readable media of claim 16, further comprising:

updating a point of sale (POS) terminal with the pricing of the at risk perishables.