Browse Prior Art Database

Web based Dynamic pricing business practice

IP.com Disclosure Number: IPCOM000014713D
Original Publication Date: 2001-Apr-16
Included in the Prior Art Database: 2003-Jun-20

Publishing Venue

IBM

Abstract

This business practice maximizes the profit generated on each individual item by recalculating the selling price to fit the existing inventory and future build plan for the item. The future build plan is also modified to match the current sell actuals. Basically pricing is automatically reconfigured to slow demand down when supply is low and increase demand when supply is high. The process will also modify future builds to reflect the current demand of the item. Current methods manually set prices for each item. Rarely is the price optimized to match the build/inventory plan. This leaves money on the table as you either have to much inventory at the end because you priced higher than market conditions and/or you run out of the part because you priced lower than the market conditions. Web based selling due to its dynamic nature and ability to change in real time allows us to fix this problem. This business practice creates a model to best determine selling price to maximize profit. Inputs into the model include the following: