Removal of expiring items from inventory

• US 8,447,665 B1
• Filed: 03/30/2011
• Issued: 05/21/2013
• Est. Priority Date: 03/30/2011
• Status: Active Grant

• Current Assignee: Amazon Technologies, Inc. (Amazon.com, Inc.)
• Original Assignee: Amazon Technologies, Inc. (Amazon.com, Inc.)
• Inventors: Schoenharl, Timothy W., Poon, Chun-Ning, Bass, Andrew T., Wu, Youjiang, Bethala, Bhagyalaxmi, Maddala, Bhaskar, Zhuo, Dongui, Palyvoda, Oley Y.
• Primary Examiner(s): Frenel, Vanel
• Application Number:
  US13/076,215
• Time in Patent Office: 783 Days
• Field of Search: 705/28, 705/22, 235/383, 235/375, 235/379, 235/385
• US Class Current: 705/28
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders

Abstract

Systems and methods for the removal of expiring items from inventory are disclosed. In some embodiments, a method includes determining a breakeven holding time for an inventory item and calculating, based at least in part on a demand forecast for the inventory item and on the breakeven holding time, a first quantity of the inventory item to be removed from the inventory. The method also includes identifying an expiration time corresponding to the given inventory item and, in response to the expiration time being shorter than the breakeven holding time, calculating a second quantity of the inventory item, where a difference between the second and first quantities represents an additional quantity of the inventory item to be removed from the inventory. The method further includes causing at least one portion of the additional quantity of the inventory item to be removed from the inventory according to an inventory removal function.

Claims

1. A method, comprising:

performing, by one or more computers;

determining a breakeven holding time for an inventory item based, at least in part, on a disposition value of the inventory item, a cost of re-buying the inventory item, and a cost of holding the inventory item in the inventory;

calculating, based at least in part on a demand forecast for the inventory item and on the breakeven holding time, a first quantity of the inventory item to be removed from the inventory;

identifying an expiration time corresponding to the given inventory item;

in response to the expiration time being shorter than the breakeven holding time, calculating a second quantity of the inventory item, wherein a difference between the second and first quantities represents an additional quantity of the inventory item to be removed from the inventory; and

causing at least one portion of the additional quantity of the inventory item to be removed from the inventory according to an inventory removal function.

2. The method of claim 1, wherein the breakeven holding time corresponds to a length of time wherein an economic effect of holding the inventory item in the inventory is approximately the same as an economic effect of disposing of the inventory item and later re-buying the inventory item.

3. The method of claim 1, wherein the breakeven holding time is equal to a difference between the cost of re-buying the inventory item and the disposition value of the inventory item, divided by the cost of holding the inventory item in inventory per unit of time.

4. The method of claim 1, wherein the inventory item is a consumable product and the expiration time corresponds to an expiration date.

5. The method of claim 1, wherein the expiration time corresponds to a declining stage in the inventory item'"'"'s lifecycle.

6. The method of claim 1, wherein the inventory removal function is a linear function.

7. The method of claim 1, wherein the inventory removal function is an exponential function.

8. The method of claim 7, wherein the exponential function determines that the additional quantity of the inventory item be removed according to a removal ratio, and wherein the removal ratio increases exponentially between a time of purchase of the inventory item and the expiration time.

9. The method of claim 8 wherein the removal ratio causes a smaller portion of the additional quantity of the inventory item to be removed closer to the time of purchase, and a larger portion of the additional quantity of the inventory item to be removed closer the expiration time.

10. A system, comprising:

at least one processor; and

a memory coupled to the at least one processor, wherein the memory stores program instructions, and wherein the program instructions are executable by the at least one processor to cause the system to;

determine a first quantity of an inventory item to be removed from an inventory, wherein an economic benefit of disposing of the first quantity of the inventory item and re-buying the first quantity of the inventory item at the end of a time period is greater than an economic benefit of holding the first quantity of the inventory item in the inventory through the time period;

determine a second quantity of the inventory item to be removed from the inventory due to an expiration date; and

cause at least a portion of a difference between the second and first quantities of the inventory item to be removed from the inventory using an inventory removal function.

11. The system of claim 10, wherein to determine the first quantity of the inventory item, the program instructions are executable by the at least one processor to further cause the system to determine a breakeven holding time for the inventory item based, at least in part, on a disposition value of the inventory item, a cost of re-buying the inventory item, and a cost of holding the inventory item in the inventory.

12. The system of claim 11, wherein to determine the first quantity of the inventory item, the program instructions are executable by the at least one processor to further cause the system to integrate a demand forecast for the inventory item up to the breakeven holding time.

13. The system of claim 10, wherein the inventory removal function is linear.

14. The system of claim 10, wherein the inventory removal function determines that the at least a portion of the difference between the second and first quantities of the inventory item be removed exponentially between a time of purchase of the inventory item and the expiration date.

15. The system of claim 10, wherein the inventory removal function determines that a smaller portion of the difference between the second and first quantities of the inventory item be removed closer to a date of purchase of the inventory item, and that a larger portion of the difference between the second and first quantities of the inventory item be removed closer the expiration date.

16. A non-transitory computer-readable storage medium having program instructions stored thereon that, upon execution by a computer system, cause the computer system to:

calculate a first number of units of an inventory item to be removed from an inventory to reduce a potential economic loss associated with stocking the inventory item; and

determine a second number of units of the inventory item in addition to the first number of units to be removed from the inventory due to an expiration of the inventory item in accordance with an inventory removal function.

17. The non-transitory computer-readable storage medium of claim 16, wherein to calculate the number of units of the inventory item to be removed from the inventory, the program instructions further cause the computer system to calculate a breakeven holding time for the inventory item, wherein the breakeven holding time is equal to a difference between the cost of re-buying the inventory item and the disposition value of the inventory item, divided by the cost of holding the inventory item in inventory per unit of time.

18. The non-transitory computer-readable storage medium of claim 16, wherein the expiration is represented by a probability distribution.

19. The non-transitory computer-readable storage medium of claim 16, wherein the inventory removal function indicates that the second number of units of the inventory item be removed exponentially between a time of purchase of the inventory item and the expiration of the inventory item.

20. The non-transitory computer-readable storage medium of claim 16, wherein the inventory removal function determines that a smaller portion of the second number of units of the inventory item be removed closer to a date of purchase of the inventory item, and that a larger portion of the second number of units of the inventory item be removed closer the expiration of the inventory item.