System and method for estimating forward retail commodity price within a geographic boundary
First Claim
1. A method for determining a forward retail price of a commodity, comprising:
- determining, by a computer system comprising a processor and a non-transitory computer-readable medium, a current retail price of the commodity for a specific location within a geographic boundary, wherein the current retail price of the commodity comprises a wholesale price component, a total markup component, and a tax component, and wherein the total markup component comprises a rack markup component and a retail markup component;
subtracting, by the computer system, an estimated total markup of the commodity for the specific location from an aggregated composite retail price of the commodity for the specific location to generate an estimated current wholesale price of the commodity for the specific location; and
creating, by the computer system, a forward market curve indicating forward retail price of the commodity for a corresponding period of time within the geographic boundary, wherein creating the forward market curve comprises;
determining, by the computer system, a rate of change between retail pricing and wholesale pricing for the commodity over a past period of time for each location within the geographic boundary on a monthly basis;
forecasting, by the computer system, future wholesale prices and estimated total markup for each location within the geographic boundary on a monthly basis;
calculating, by the computer system, an estimated forward retail price for each location within the geographic boundary on a monthly basis based on a plurality of factors, wherein the plurality of factors includes the current retail price of the commodity, the estimated current wholesale price of the commodity, and the rate of change; and
aggregating, by the computer system, the estimated forward retail price, location by location, within the geographic boundary on a monthly basis.
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Abstract
Embodiments disclosed herein provide a new way to generate estimated forward retail prices for a retail commodity within a geographic boundary that represents a target market. Using estimates for local retail prices, combined with knowledge of current and historical wholesale prices, embodiments disclosed herein enable the creation of a forward estimate of retail prices on fuels for a specific location, time period, and fuel grade. In some embodiment, the process of creating a forward estimate of retail prices on fuels comprises performing a predictive modeling utilizing wholesale gasoline prices, rack markup, retail markup, and taxes on a location, time period, and fuel grade basis. In some cases, the estimated forward retail prices thus generated can be used in a pricing model for price protection services for that retail commodity in that target market.
240 Citations
20 Claims
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1. A method for determining a forward retail price of a commodity, comprising:
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determining, by a computer system comprising a processor and a non-transitory computer-readable medium, a current retail price of the commodity for a specific location within a geographic boundary, wherein the current retail price of the commodity comprises a wholesale price component, a total markup component, and a tax component, and wherein the total markup component comprises a rack markup component and a retail markup component; subtracting, by the computer system, an estimated total markup of the commodity for the specific location from an aggregated composite retail price of the commodity for the specific location to generate an estimated current wholesale price of the commodity for the specific location; and creating, by the computer system, a forward market curve indicating forward retail price of the commodity for a corresponding period of time within the geographic boundary, wherein creating the forward market curve comprises; determining, by the computer system, a rate of change between retail pricing and wholesale pricing for the commodity over a past period of time for each location within the geographic boundary on a monthly basis; forecasting, by the computer system, future wholesale prices and estimated total markup for each location within the geographic boundary on a monthly basis; calculating, by the computer system, an estimated forward retail price for each location within the geographic boundary on a monthly basis based on a plurality of factors, wherein the plurality of factors includes the current retail price of the commodity, the estimated current wholesale price of the commodity, and the rate of change; and aggregating, by the computer system, the estimated forward retail price, location by location, within the geographic boundary on a monthly basis. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9)
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10. A non-transitory computer-readable medium storing program instructions executable by a processor to perform the steps comprising:
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determining a current retail price of a commodity for a specific location within a geographic boundary, wherein the current retail price of the commodity comprises a wholesale price component, a total markup component, and a tax component, and wherein the total markup component comprises a rack markup component and a retail markup component; subtracting an estimated total markup of the commodity for the specific location from an aggregated composite retail price of the commodity for the specific location to generate an estimated current wholesale price of the commodity for the specific location; and creating a forward market curve indicating forward retail price of the commodity for a corresponding period of time within the geographic boundary, wherein creating the forward market curve comprises; determining a rate of change between retail pricing and wholesale pricing for the commodity over a past period of time for each location within the geographic boundary on a monthly basis; forecasting future wholesale prices and estimated total markup for each location within the geographic boundary on a monthly basis; calculating an estimated forward retail price for each location within the geographic boundary on a monthly basis based on a plurality of factors, wherein the plurality of factors includes the current retail price of the commodity, the estimated current wholesale price of the commodity, and the rate of change; and aggregating the estimated forward retail price, location by location, within the geographic boundary on a monthly basis. - View Dependent Claims (11, 12, 13, 14, 15, 16)
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17. A system comprising:
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a processor; and a non-transitory computer-readable medium, communicatively coupled to the processor, storing program instructions executable by the processor to perform the steps comprising; determining a current retail price of a commodity for a specific location within a geographic boundary, wherein the current retail price of the commodity comprises a wholesale price component, a total markup component, and a tax component, and wherein the total markup component comprises a rack markup component and a retail markup component; subtracting an estimated total markup of the commodity for the specific location from an aggregated composite retail price of the commodity for the specific location to generate an estimated current wholesale price of the commodity for the specific location; and creating a forward market curve indicating forward retail price of the commodity for a corresponding period of time within the geographic boundary, wherein creating the forward market curve comprises; determining a rate of change between retail pricing and wholesale pricing for the commodity over a past period of time for each location within the geographic boundary on a monthly basis; forecasting future wholesale prices and estimated total markup for each location within the geographic boundary on a monthly basis; calculating an estimated forward retail price for each location within the geographic boundary on a monthly basis based on a plurality of factors, wherein the plurality of factors includes the current retail price of the commodity, the estimated current wholesale price of the commodity, and the rate of change; and aggregating the estimated forward retail price, location by location, within the geographic boundary on a monthly basis. - View Dependent Claims (18, 19, 20)
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Specification