Two-Axis Risk Graph for Invoice Auction Bidders
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Solution Overview
Problem
Invoice auctions face challenges as bidders have limited information about the risks of collecting from customers or suppliers, making it cumbersome and time-consuming for them to assess financial risks, and existing systems present financial data in a raw and difficult-to-absorb manner.
Innovation Solution
The system calculates two individual scores representing different aspects of financial risk and combines them to generate an overall risk score, which is displayed on a multi-axis graph or as a two-axis score, providing bidders with a simplified guide to make informed decisions on bidding and terms.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If the system presents detailed financial data in raw format, then the information completeness is improved, but the ease of understanding and decision-making deteriorates
Solution Approach 1:
The patent segments complex financial risk assessment into two distinct score components: a first score representing likelihood of default and a second score representing likelihood of collection. This segmentation allows bidders to understand different aspects of risk separately while maintaining complete information about overall risk exposure.
Solution Approach 2:
The patent transforms one-dimensional raw financial data into a two-dimensional visual display using a graph with two axes. Each axis represents a different risk dimension, and the position on the graph provides immediate visual understanding of risk levels without losing underlying data completeness.
2Measurement precision
If the system provides comprehensive financial analysis, then the measurement precision is improved, but the time required for assessment increases
Solution Approach 1:
The system performs preliminary calculations of the two risk scores before the auction takes place. This preliminary action prepares the risk assessment in advance, so when bidders need to make decisions, the precision analysis is already complete and ready for immediate display.
Solution Approach 2:
The patent creates simplified visual representations (copies) of complex financial data through the two-axis graph display. This copying transforms detailed financial analysis into an easily consumable format that preserves the essential risk information while dramatically reducing the time needed for bidders to process and understand the data.
3Measurement precision
If the system displays multiple risk metrics separately, then the measurement precision is improved, but the device complexity increases
Solution Approach 1:
The patent merges multiple separate risk metrics into a unified two-axis graph display. The first score and second score are displayed together in a single visual framework, allowing bidders to comprehend multiple risk dimensions simultaneously without the complexity of separate displays or tables.
Data Source
AI summary
In preparation for receiving bids in an auction, an auction computer system generates a first score that represents a likelihood that a responsible party will default on an auctioned transaction and a second score that represents a likelihood of collection from the responsible party on a defaulted transaction. For each respective bidder of one or more bidders from the plurality of bidders, a display of a bidder computer system of the respective bidder displays a graph having a first axis corresponding to the likelihood that the responsible party will default on the transaction and a second axis corresponding to the likelihood of collection from the responsible party on a defaulted transaction, and display an indicia at a location in the graph correspond to the first score and the second score, and receive from at least one bidder of the one or more bidders a bid for the transaction.