Dynamic Inventory Pricing Based on Product Condition and Age

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Solution Overview

Problem

Conventional inventory management systems fail to determine accurate product prices based on product characteristics, leading to inefficient return processing and reduced profit margins due to inconsistent pricing of returned and stored products.

Innovation Solution

A system and method that utilize a processor and database to scan product indicia, determine if a product is returned or not, assess its condition and age, and calculate a new price as a discount of the original price based on these characteristics, allowing for dynamic pricing adjustments.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If conventional inventory management systems use arbitrary discounts or original prices for returned products, then the system complexity is reduced, but the pricing accuracy and profit margins deteriorate

Engineering Contradiction:

Improvepricing accuracyVSAvoidsystem complexity

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The system dynamically adjusts pricing parameters based on multiple product characteristics including age, condition, inventory rate, and demand. The pricing algorithm changes the price parameter adaptively rather than using fixed arbitrary discounts, resolving the contradiction between pricing accuracy and system complexity by making complexity manageable through structured parameter adjustment

Inventive Principle:

Principle #35Parameter changes

Solution Approach 2:

The system incorporates feedback loops that continuously monitor product performance, inventory movement, and market conditions. This feedback mechanism enables the system to learn from past pricing decisions and adjust future pricing strategies, improving pricing accuracy while managing complexity through data-driven iterative optimization

Inventive Principle:

Principle #23Feedback

2Loss of energy

If returned products are held in inventory without dynamic pricing, then the inventory management simplicity is maintained, but the loss of value and profit margins increases

Engineering Contradiction:

Improvevalue lossVSAvoidreturn processing efficiency

Core Design Contradiction:

Loss of energyVSProductivity

Solution Approach 1:

The system introduces dynamic pricing that adapts to changing product conditions, ages, and market demands. This dynamic approach prevents value loss by ensuring products are priced according to their current state rather than maintaining static original prices, while improving processing efficiency through automated pricing decisions

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The system performs preliminary pricing calculations and assignments automatically when products enter the return process. By pre-determining pricing based on initial product assessment, the system reduces manual intervention and accelerates the return processing workflow while preventing value loss through immediate appropriate pricing

Inventive Principle:

Principle #10Preliminary action

3Measurement precision

If products are priced based on multiple characteristics (age, condition, inventory rate), then the pricing reflects true product value, but the processing time and system complexity increases

Engineering Contradiction:

Improvetrue value assessmentVSAvoidprocessing time

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The system replaces manual pricing decisions with automated computer-based algorithms that instantly calculate prices based on multiple characteristics. This substitution of mechanical manual processes with electronic automated processing enables comprehensive multi-factor pricing without significant time penalty, as computations occur rapidly through programmed logic

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

4Adaptability or versatility

If conventional systems use fixed pricing for all products, then the ease of operation is maintained, but the adaptability to product characteristics and market conditions deteriorates

Engineering Contradiction:

Improvepricing adaptabilityVSAvoidoperational simplicity

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The system performs self-service pricing by automatically determining optimal prices based on its own internal data about product characteristics, inventory rates, and historical performance. This self-determining capability provides high adaptability to product characteristics while maintaining operational simplicity, as the system manages its own pricing without requiring complex manual intervention

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS11763256B2Computerized systems and methods for managing inventory by determining product prices based on product characteristics

Publication Date: 2023.09.19 COUPANG CORP

AI summary

Systems and method are provided for managing inventory by determining product prices based on product characteristics. One method includes, based on a condition of the product and an age of the product, determining a new price of a returned product and modifying the database to assign the new price to the product identifier. Based on a determination that the product is not a returned product from a customer: calculating an inventory rate associated with the product; based on the calculated inventory rate, determining a new price of the product; and modifying the database to assign, to the product identifier, the inventory rate and the new price.