Patent ID: 8438093
Filing Date: 2013-05-07
Classification: G06Q,Y02P

Abstract:
1. A method for a buyer to manage economic risk regarding purchase from suppliers of one or more components to produce a finished product for commercial sale comprising: a. providing a computer configured to determine a contract price for the one or more components of the finished product based on a calculated compensating factor for reducing volatility of a market providing adequate volume to offset price risk for the one or more components of the finished product; b. executing a forward contract indexed on a regulated pricing schema for the one or more components outside the regulated class of the buyer between the buyer and one or more suppliers for supply of at least one of the components to the buyer according to mutually agreeable terms which include contract pricing having: c. hedging by the buyer against the contract pricing by purchasing derivatives in the derivatives market after confirming a high correlation between the contract pricing and the derivatives pricing according to the compensation factor calculated by the computer.