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Browse Prior Art Database

Shipping and holding Cost Minimization

IP.com Disclosure Number: IPCOM000016100D
Original Publication Date: 2002-Oct-11
Included in the Prior Art Database: 2003-Jun-21
Document File: 2 page(s) / 42K

Publishing Venue

IBM

Abstract

A fundamental transformation in business to business transactions is occurring, due to the Internet. Retailers are rapidly moving to a model, where some components are shipped from their inventory while other components are dropped shipped from sub-suppliers or distributors. The differences in distribution methods combined with the wide variation in delivery times based shipping method and distance being shipped results in range of delivery times over a period of days or weeks. Typically customers want all the parts to arrive in a single shipment or on the same day to avoid holding items for a period to days or weeks. This forces companies to bring items into a common location or distribution point then resend the bundled order to the customer. This invention defines a new method that eliminates the need for intermediate step of bundling and reduces overall expense as both shipping and holding cost can be minimized. Many customer orders have a multitude of different parts. The customer would prefer if all parts are delivered on the same day. Current methods require the shipping company to gather all of the items, hold them in a common place, and than ship them to the end user. This invention supports sending all items to the end user on a common date, eliminates the common holding area, and takes advantage of lower cost shipping methods if possible.

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Shipping and holding Cost Minimization

A fundamental transformation in business to business transactions is occurring, due to the Internet. Retailers are rapidly moving to a model, where some components are shipped from their inventory while other components are dropped shipped from sub-suppliers or distributors. The differences in distribution methods combined with the wide variation in delivery times based shipping method and distance being shipped results in range of delivery times over a period of days or weeks. Typically customers want all the parts to arrive in a single shipment or on the same day to avoid holding items for a period to days or weeks. This forces companies to bring items into a common location or distribution point then resend the bundled order to the customer.

This invention defines a new method that eliminates the need for intermediate step of bundling and reduces overall expense as both shipping and holding cost can be minimized.

Many customer orders have a multitude of different parts. The customer would prefer if all parts are delivered on the same day. Current methods require the shipping company to gather all of the items, hold them in a common place, and than ship them to the end user.

This invention supports sending all items to the end user on a common date, eliminates the common holding area, and takes advantage of lower cost shipping methods if possible.

A database is created for each item. The database contains the following fields:

1) Zone that supplier is in
2) The actual cost of the item
3)How many Item in stock or not? If not how many days until in stock. This field is updated from the supplier each day.

Another table contains time to ship from supplier to customer by three different methods for different regions or zones of the country (from lowest cost 3-7 days, to 48 hours, and overnight delivery).

The solution works in the following way:

Customer places order which contains multiple items.

Each item is checked against database to determine when it could be at the customer's address using fastest method.

This calculated by determining time to ship if in i...