Inventory Allocation Tool Optimizing Vendor Pack Sizes

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Solution Overview

Problem

Current inventory allocation tools for large retailers often over-order items to satisfy vendor pack size constraints, leading to increased costs and storage issues, and deviate significantly from allocation policies, causing inefficient cross-country shipping and transit times.

Innovation Solution

A computer network system with an optimized inventory allocation tool that allocates order quantities among distribution centers based on allocation policies, respecting minimum order quantities and vendor pack sizes, while minimizing over-ordering and maintaining alignment with allocation percentages.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If the IAT over-orders items to satisfy vendor pack size constraints, then vendor constraints are met, but ordering costs increase and storage capacity is impacted

Engineering Contradiction:

Improvevendor constraint satisfactionVSAvoidorder quantity

Core Design Contradiction:

ReliabilityVSQuantity of substance

Solution Approach 1:

The patent applies partial action by allocating vendor pack sizes selectively to distribution centers based on their specific needs and capacity, rather than uniformly applying vendor pack size constraints to all centers. This allows the system to meet vendor constraints where necessary while avoiding excessive ordering at centers where it would cause overstocking or capacity issues.

Inventive Principle:

Principle #16Partial or excessive action

Solution Approach 2:

The patent segments the distribution network into multiple distribution centers with individual allocation profiles. Each center can receive different allocations based on its capacity, demand patterns, and geographic location. This segmentation allows the system to satisfy vendor pack size constraints at some centers while avoiding them at others, thereby reducing overall over-ordering.

Inventive Principle:

Principle #1Segmentation

2Reliability

If the IAT creates significant deviation from allocation policy to satisfy minimum order quantity, then minimum order quantity is met, but allocation policy compliance deteriorates and shipping efficiency decreases

Engineering Contradiction:

Improveminimum order quantity satisfactionVSAvoidallocation policy compliance

Core Design Contradiction:

ReliabilityVSManufacturing precision

Solution Approach 1:

The patent changes the parameters of allocation by introducing flexible allocation percentages that can be adjusted based on vendor constraints and distribution center characteristics. Rather than rigidly following initial allocation policies, the system dynamically modifies allocation parameters to balance MOQ satisfaction with policy compliance, optimizing the trade-off between constraint satisfaction and allocation accuracy.

Inventive Principle:

Principle #35Parameter changes

Solution Approach 2:

The patent implements a dynamic allocation approach where allocation percentages and quantities are adjusted in real-time based on vendor constraints, distribution center capacity, and demand forecasts. This dynamic system allows the IAT to satisfy minimum order quantities while minimizing deviation from allocation policy by continuously optimizing the allocation plan rather than using fixed rules.

Inventive Principle:

Principle #15Dynamics

3Reliability

If the IAT distributes items to minimize vendor constraint violations, then vendor constraints are satisfied, but cross-country shipping increases and transit time increases

Engineering Contradiction:

Improvevendor constraint satisfactionVSAvoidtransit time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent applies preliminary action by pre-planning allocations with geographic considerations in mind. The system anticipates shipping requirements and pre-positions inventory in distribution centers strategically located to minimize transit distances and times. By planning allocations in advance with geographic optimization, the system satisfies vendor constraints while reducing the need for subsequent cross-country shipping and minimizing transit times.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS10565535B2System having inventory allocation tool and method of using same

Publication Date: 2020.02.18 WALMART APOLLO LLC

AI summary

A system and method includes a computer network system configured to provide output to a plurality of distribution centers for a retailer, an inputting system configured to allow ordering of a quantity of an item from a vendor having a minimum order quantity (MOQ) and vendor pack size for the item, an allocation system configured to allocate the order quantity based on an allocation policy including specific distribution centers and allocation percentages associated with the specific distribution centers, and an inventory allocation tool (IAT) configured to receive the allocation policy, order quantity, MOQ, and vendor pack size as inputs, optimizes distribution of the order quantity among the specific distribution centers so that MOQ and vendor pack size according to the allocation policy are respected, and outputs an executable purchase order over the computer network system for each specific distribution center.