Unified Price Planning System for Retail Inventory Control

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Solution Overview

Problem

Current marketing systems lack a unified platform for managing price adjustments, promotions, and inventory management, leading to inefficiencies in pricing strategies, particularly for seasonal products, which results in higher financial risks for retailers due to unsold stock and reduced gross margins.

Innovation Solution

A price planning system that integrates automated pricing engines, manual pricing engines, and promotional management tools, allowing for a closed-loop retail process that includes communication with inventory and budget systems to optimize pricing decisions and minimize stock levels.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Loss of energy

If markdowns are applied restrictively to control gross margin, then profit margin is preserved, but remaining stock increases leading to higher financial losses

Engineering Contradiction:

Improvegross marginVSAvoidremaining stock

Core Design Contradiction:

Loss of energyVSLoss of substance

Solution Approach 1:

The system implements automated feedback loops that continuously monitor sales performance, inventory levels, and margin targets. The automated pricing engine receives real-time data on slow-selling items and automatically adjusts prices or triggers promotional actions when predefined thresholds are exceeded, creating a closed-loop control system that responds dynamically to changing conditions without manual intervention.

Inventive Principle:

Principle #23Feedback

Solution Approach 2:

The system enables self-service automated price planning where the pricing engine autonomously identifies slow sellers, determines appropriate markdown strategies, and executes price adjustments without requiring continuous manual input from pricing agents. The system serves itself by automatically generating price plans, monitoring their effectiveness, and triggering subsequent actions based on predefined business rules and performance metrics.

Inventive Principle:

Principle #25Self-service

2Ease of operation

If manual price adjustment is used for seasonal products, then pricing decisions can be made based on experience and intuition, but the process is time-consuming and lacks consistency

Engineering Contradiction:

Improvepricing decision flexibilityVSAvoidpricing process time

Core Design Contradiction:

Ease of operationVSLoss of time

Solution Approach 1:

The system performs preliminary actions by pre-configuring pricing strategies, margin targets, and promotional parameters before the sales season begins. Pricing agents can define multiple pricing scenarios and rules in advance, allowing the automated engine to execute predetermined strategies automatically when conditions are met, eliminating the need for time-consuming manual decisions during critical sales periods.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system replaces the mechanical manual process of price adjustment with an automated electronic pricing engine that uses algorithms and business rules to determine optimal prices. This substitution transforms the manual, intuition-based mechanical process into an automated, data-driven electronic system that operates continuously without human intervention, dramatically reducing processing time while maintaining strategic flexibility.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Ease of manufacture

If separate systems are used for budgeting, inventory, pricing, and promotions, then each task can be specialized, but feedback between tasks is lost and overall efficiency decreases

Engineering Contradiction:

Improvetask specializationVSAvoidfeedback between tasks

Core Design Contradiction:

Ease of manufactureVSLoss of information

Solution Approach 1:

The system merges previously separate budgeting, inventory, pricing, and promotion management functions into an integrated price planning system. The automated pricing engine accesses real-time data from inventory systems, budget constraints, and sales performance metrics through unified data connections, enabling coordinated decision-making across all functions while maintaining the specialized capabilities of each component through modular architecture.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The integrated price planning system provides multi-functionality by serving as a central platform that simultaneously handles budget monitoring, inventory optimization, price adjustment, and promotion management. The system universally manages all pricing-related tasks across different product categories and sales channels through a single automated engine, eliminating information silos while preserving specialized processing capabilities for each function.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS7805383B2Price planning system and method including automated price adjustment, manual price adjustment, and promotion management

Publication Date: 2010.09.28 SAP SE

AI summary

The present invention discloses a method, program, product and system for managing the sale of a product. The system can determine if the product is a slow seller, determining a markdown to be applied to a price of the product, reconciling a markdown budget with the determined markdown to be applied to the price to determine whether the markdown will be applied, and adjusting the price of the product by the markdown. The system can also apply manual pricing data and promotion pricing data. The system integrates several tasks required for selling articles and services.