Inventory Redistribution Control for Fixed-Lifetime Retail Returns

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Solution Overview

Problem

Retailers face inventory imbalances due to generous return policies, particularly when online sales are combined with brick-and-mortar returns, leading to inefficient and costly inventory redistribution methods that do not maximize revenue, especially for items with a fixed lifetime.

Innovation Solution

A computerized inventory redistribution control system that simultaneously solves the transportation and price optimization problems to balance redistribution costs against revenue gains, considering the fixed lifetime of items and accounting for their full lifecycle, including markdowns and promotions.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If items are returned to any store in the retail chain, then customer convenience is improved, but inventory imbalance at stores worsens

Engineering Contradiction:

Improvecustomer convenienceVSAvoidinventory balance

Core Design Contradiction:

Ease of operationVSStability of the object's composition

Solution Approach 1:

The system continuously monitors inventory levels at each store and uses this feedback to dynamically determine optimal return locations. The computerized system adjusts redistribution strategies based on real-time inventory data, ensuring that returned items are directed to stores with capacity and demand, thus maintaining inventory balance while preserving customer convenience

Inventive Principle:

Principle #23Feedback

Solution Approach 2:

The system performs preliminary analysis of inventory levels and store capacity before directing returns. By pre-calculating optimal destination stores based on current inventory states, the system prevents inventory imbalances from occurring in the first place, rather than reacting to them after they occur

Inventive Principle:

Principle #10Preliminary action

2Stability of the object's composition

If returned items are sent back to distribution center, then inventory control is improved, but redistribution cost increases

Engineering Contradiction:

Improveinventory controlVSAvoidredistribution cost

Core Design Contradiction:

Stability of the object's compositionVSLoss of energy

Solution Approach 1:

The system extracts the intermediary distribution center step from the traditional return flow. Instead of mandating that all returns go through the DC, the computerized system directly routes items from return locations to optimal destination stores, eliminating unnecessary transportation steps and reducing redistribution costs while maintaining inventory control

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

The system replaces static redistribution rules with dynamic, real-time optimization. Return destinations are not predetermined but are dynamically selected based on current inventory levels, demand forecasts, and transportation costs, allowing the system to adapt to changing conditions and minimize redistribution expenses

Inventive Principle:

Principle #15Dynamics

3Adaptability or versatility

If online purchases can be returned to brick-and-mortar stores, then customer flexibility is improved, but store inventory imbalance worsens

Engineering Contradiction:

Improvecustomer flexibilityVSAvoidstore inventory balance

Core Design Contradiction:

Adaptability or versatilityVSStability of the object's composition

Solution Approach 1:

The computerized inventory redistribution system acts as an intelligent intermediary between online return requests and physical store inventory capacity. It matches returned items with appropriate destination stores based on multiple criteria including inventory levels, item characteristics, and store capabilities, thereby enabling customer flexibility while preventing store inventory imbalances

Inventive Principle:

Principle #24Intermediary (Mediator)

4Loss of energy

If multiple redistribution approaches are considered, then revenue optimization is improved, but decision complexity increases

Engineering Contradiction:

Improverevenue optimizationVSAvoiddecision complexity

Core Design Contradiction:

Loss of energyVSDevice complexity

Solution Approach 1:

The system replaces manual decision-making processes with an automated computerized optimization engine. This engine evaluates multiple redistribution approaches simultaneously using algorithms that consider transportation costs, store capacity, demand forecasts, and item characteristics, automatically selecting the optimal strategy without human intervention and eliminating decision complexity

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS12567026B2Computerized inventory redistribution control system

Publication Date: 2026.03.03 ORACLE INT CORP

AI summary

One example of computerized inventory redistribution control includes, for each location inventory record in a set of location inventory records, calculating a quantity change that will bring a current item quantity to a different item quantity for the location inventory record. Determining a cost of a minimum-cost redistribution among the physical locations to effect the quantity changes. Determining a scaling factor that maximizes total revenue when the quantity changes are scaled by the scaling factor after deducting the cost scaled by the scaling factor. Generating transfer instructions for a redistribution of the item by scaling the transfer quantities of the minimum-cost redistribution by the scaling factor. Transmitting each transfer instruction to a computing device associated with a physical location indicated in the transfer instruction.