US 7,454,374 B2 · Method for evaluating a forward-buy opportunity

Abstract

A method for evaluating a forward-buy opportunity relating to a product set is provided. At the outset, an incremental forward buy quantity for each product in the product set is initialized to a user defined quantity. Financial and product parameters relating to the products in the product set are input, and a return on investment (ROI) for each product is calculated. In response to the calculated ROI being equal to or greater than a defined value, the product having the highest ROI is identified and the recommended buy quantity is recorded. The recommended buy quantity for the identified product is incremented and the ROI for each product is recalculated. The iterative ROI calculation method continues until the ROI for each product is no longer equal to or greater than the defined value.

Claims12

Dependent claims

A method for evaluating a forward-buy opportunity relating to a product set, comprising:

initializing a user defined incremental forward buy quantity for each product in the product set;
inputting a financial parameter relating to at least one of an inventory carrying cost or a discount rate;
inputting a product parameter relating to at least one of a product demand, a product quantity, or a product price;
calculating a return on investment for each product in the product set in response to the financial and product parameters;
determining whether the calculated return on investment is equal to or greater than a defined value;
in response to the calculated return on investment being equal to or greater than a defined value, identifying the product having the highest return on investment and recording a recommended buy quantity relating to that product;
and
incrementing the recommended buy quantity of the identified product and recalculating the return on investment for each product in the product set until each return on investment calculation is no longer equal to or greater than the defined value.

5 more elements

An iterative method for comparing forward-buy purchasing opportunities across multiple products in a product set, comprising:

initializing for each product a user defined incremental forward buy quantity;
inputting financial and product information relating to each product of the product set, the product information including a statistical distribution of product demand, a current on hand balance, and a parameter relating to product trend;
filtering out from the product set those products having an undesirable product trend;
calculating for each product a probability of demand materialization in response to the statistical distribution of product demand, the current on hand balance, and a purchase of an additional unit of that product to increase the current on hand quantity;
calculating a return on investment for each product in the product set, the calculation factoring in a cost relating to the probability of demand materialization;
determining whether the return on investment is acceptable;
in response to the return on investment being acceptable, identifying the product having the highest return on investment and recording the recommended buy quantity relating to that product;
and
incrementing the recommended buy quantity of the identified product and recalculating the return on investment for each product in the product set until each return on investment calculation is no longer acceptable.

6 more elements

Dependencies are inferred from the claim text.

Method for evaluating a forward-buy opportunity

Life of this patent

Method for evaluating a forward-buy opportunity

Life of this patent

Abstract

Claims12