# Patent

## Title
Dynamically configurable and extensible rating engine

## Abstract

A method and apparatus for managing inventory in a distressed inventory warehouse with the aid of a programmable computer is disclosed. The method and apparatus provides for the complete automation of the inventory management of a distressed inventory warehouse. The method and apparatus also provides for the continual updating of records related to the distressed inventory as it passes through various stages within the distressed inventory warehouse.

## Background
with the present invention is appended hereto as Appendix A.

1. Field of the Invention

The present invention relates to a method and apparatus for managing inventory with the aid of a programmable computer, and more particularly to a method and apparatus for receiving, sorting, marking, tracking, and selling distressed inventory which has been delivered to a distressed inventory central warehouse. The method and apparatus provides for the complete automation of the inventory management of a distressed inventory warehouse and the continual updating of inventory data records related to the distressed inventory as it passes through various stages within the warehouse.

2. Description of the Prior Art

Approximately 1% of all inventory shipped by freight carriers in the U.S. does not reach its intended destination or is not accepted by the buyer once it reaches its destination. This type of inventory is commonly referred to as "distressed inventory". Inventory often becomes distressed inventory because it was accidentally loaded on the wrong freight truck, damaged, or simply marked improperly.

Distressed inventory often cannot be feasibly reunited with the original inventory manufacturer or seller because freight carriers often do not immediately return to the place where they initially picked up the inventory. Therefore, it is common for freight carriers to deliver distressed inventory to centrally located distressed inventory warehouses that sort, store, redeliver or sell the inventory.

Once the distressed inventory is delivered to the distressed inventory warehouse, the distressed inventory warehouse must manage the distressed inventory and determine how to best deal with it. There are many unique problems associated with the managing of distressed inventory that are not encountered in the management of "regular" inventory. For example, regular inventory is typically delivered to a warehouse only after it has been ordered. Further, the ordered inventory will usually be clearly identified, typically in the form of documentation which accompanies the inventory (i.e., freight bills, labels, UPC code, etc). Yet further, the delivery dates and times for regular inventory is set well in advance of the delivery. In contrast, with distressed inventory, it is impossible to anticipate what inventory will be lost, damaged, etc., during shipping; therefore, it is also impossible to anticipate what types of goods will be delivered to the distressed inventory warehouse and when the distressed inventory will be delivered. Accordingly, distressed inventory warehouses must be constantly prepared to receive and manage all types of inventory, particularly unidentified inventory, at all times.

Another unique problem associated with the management of distressed inventory management is that much of the distressed inventory cannot be easily identified because it is either mislabeled or not labeled at all. Accordingly, the distressed inventory warehouses often must open all boxes of inventory and identify and sort the distressed inventory before determining how to best handle it.

Another unique problem associated with the management of distressed inventory is that many different types of inventory may be received by a single distressed inventory warehouse without advance notice. For example, it is not uncommon for distressed inventory warehouses to receive food items, clothing, vehicle parts, electronics, personal hygiene products, appliances, musical instruments, cleaning supplies and other similar goods. As can be appreciated, each of these types of inventory require different handling procedures. Thus, it is much more difficult to develop procedures for handling distressed inventory than for non-distressed inventory.

Another unique problem associated with the management of distressed inventory is that the distressed inventory is not always handled in conventional manners. For example, distressed inventory is often in such bad shape that it must be trashed or sold for scrap value. Additionally, some freight carriers require that certain types of distressed inventory be returned to them. Thus, distressed inventory warehouses must identify the distressed inventory that requires special handling and separate it from other types of inventory. Since different types of inventory must pass through different inventory management stages, it is exceedingly difficult to accurately manage and track all the distressed inventory received by a distressed inventory warehouse with known inventory tracking methods.

Another problem associated with the management of distressed inventory is that it is difficult to obtain and maintain sufficient records for use in pricing the distressed inventory for sale.

Methods and apparatuses for managing and tracking inventory are known in the art. However, none of these prior art methods and apparatus have been designed to take into account the unique difficulties associated with managing distressed inventory. Accordingly, there is a need for a method and apparatus for tracking inventory that is particularly configured for managing distressed inventory.

In view of the problems associated with managing distressed inventory as set forth, it is an object of the present invention to provide a method and apparatus for managing and tracking inventory with the aid of a programmable computer that is particularly designed to take into account the unique difficulties associated with managing distressed inventory.

It is a more particular object of the present invention to provide a method and apparatus for managing and tracking distressed inventory with the aid of a programmable computer that allows an operator to easily and effectively identify and mark distressed inventory as it arrives at the distressed inventory warehouses.

It is another object of the present invention to provide a method and apparatus for managing and tracking distressed inventory with the aid of a programmable computer that allows an operator to easily and effectively track and sell inventory after it has been identified and marked and as it passes through various other stages in the distressed inventory warehouse.

It is another object of the present invention to provide a method and apparatus for managing and tracking inventory with the aid of a programmable computer that creates a unique inventory data record for each piece of inventory that is received by the distressed inventory warehouse and that permits the inventory data record to be instantaneously updated from anywhere in the distressed inventory warehouse to indicate the status of the inventory.

It is another object of the present invention to provide a method and apparatus for managing and tracking distressed inventory with the aid of a programmable computer that permits sales people to enter into negotiations with potential customers for the sale of the distressed inventory anywhere in the distressed inventory warehouse and that permits the appropriate inventory data records to be continually updated to indicate these negotiations.

It is another object of the present invention to provide a method of creating and managing a database of product UPC codes for use in pricing distressed inventory for sale.

In view of these and other objects that become evident from the following description of the present invention, a method and apparatus that is particularly designed for managing and tracking distressed inventory with the aid of a programmable computer is provided. The preferred inventory tracking apparatus broadly includes a centrally located host computer, a printer, and a plurality of remote programmable input devices located throughout the distressed inventory warehouse and in communication with the host computer.

The host computer is operable for receiving inventory information relating to the distressed inventory and for creating and storing inventory data records containing the inventory information. The label printer is coupled with the host computer and is operable for printing machine-readable inventory labels that relate to their respective inventory data records for placement on the inventory.

The programmable input devices are in communication with the host computer and may include portable scanning devices, remote access terminals or computers or other types of programmable devices. The programmable input devices are operable for inputting or scanning the machine-readable inventory labels and for communicating with the host computer for receiving and transmitting tracking, sales and other status information.

The method of the present invention is performed with the aid of a computer program for operating the host computer described above. The method broadly includes the steps: a) receiving into the host computer inventory information related to a piece of inventory, the inventory information including inventory identification information and inventory destination information; b) storing the inventory information in an inventory data record in the computer; c) printing a machine-readable inventory label with a printer coupled with the computer, the inventory label including an inventory code associated with the inventory data record; d) placing the inventory label on the inventory; e) entering the inventory code into a programmable input device in communication with the computer for accessing the inventory data record; f) entering updating information into the programmable input device whenever the inventory information changes; g) sending the updating information from the programmable input device to the computer; and h) updating the inventory data record stored in the host computer in response to receipt of the updating information.

The updating information specified above may include order information indicating that a customer has offered to buy the inventory, tracking information indicating that the inventory has been moved to a new location within the warehouse, and pricing information to change the price of the inventory. This updating information is transmitted from the programmable input device to the host computer to update the inventory data record for constantly maintaining accurate inventory information within the host computer.

The present invention also includes a method for creating and managing a database of product UPC codes for use in pricing distressed inventory for sale.

A preferred embodiment of the present invention is described in detail below with reference to the attached drawing figures, wherein:

FIG. 1 is a schematic representation of the inventory management apparatus constructed in accordance with a preferred embodiment of the present invention;

FIG. 2 is a flow diagram illustrating an overview of the steps in the preferred inventory management method of the present invention;

FIG. 3 is a flow diagram illustrating the inventory unloading and sorting portion or subroutine of the present invention;

FIG. 4 is a flow diagram illustrating the retail order and load-out portion or subroutine of the present invention;

FIG. 5 is a flow diagram illustrating the warehouse invoice and loadout process portion or subroutine of the present invention;

FIG. 6 is a flow diagram further illustrating the warehouse invoice and loadout process portion or subroutine of the present invention, and specially illustrating the hold and release portions of the warehouse subroutine;

FIG. 7 is a flow diagram further illustrating the warehouse invoice and loadout process portion or subroutine of the present invention, and specially illustrating the flag and unflag portions of the warehouse subroutine;

FIG. 8 is a flow diagram illustrating the bid sale and loadout portion or subroutine of the present invention;

FIG. 9 is a flow diagram illustrating the pricing and marking portions and subroutines of the present invention; and

FIG. 10 is a flow diagram illustrating the price markdown and markup portion or subroutine of the present invention.

I. Inventory Management Apparatus

Turning now to the attached drawing figures, FIG. 1 illustrates the preferred inventory management apparatus 10 of the present invention. The following description of the inventory management apparatus 10 is provided for disclosing a preferred embodiment and best mode of the present invention. Those skilled in the art will appreciate that the preferred components of the inventory management apparatus 10 may be replaced with equivalent components without departing from the scope of the present invention.

The preferred inventory management apparatus 10 broadly includes a host computer 12, one or more printers 14 coupled with the host computer 12, and a plurality of programmable input devices in communication with the host computer 12. The programmable input devices may include one or more portable scanning devices 16, one or more remote computers 18, or any other types of input devices.

In more detail, the host computer 12 is provided for receiving inventory information relating to the distressed inventory and for creating and maintaining inventory data records containing the inventory information. The host computer 12 may be any type of minicomputer, microcomputer or mainframe computer but is preferably a Hewlett Packard 9000 Series 800 Model E server computer that uses the HP-Unix operating software and includes a conventional display monitor, a digital data storage tape drive, dual two-giga byte mirroring hard drives, and an integrated local-area-network (LAN) connection. Those skilled in the art will appreciate that the host computer 12 may be any type of computer including a microcomputer, minicomputer, or mainframe computer.

The printer or printers 14 are coupled with the host computer 12 and may be any conventional printer operable for printing machine-readable inventory labels. In preferred forms, a plurality of printers 14 are provided at various locations throughout the distressed inventory warehouse.

The programmable input devices are operable for scanning or entering the machine-readable inventory labels and for communicating with the host computer 12 to provide updating information to the host computer 12. As discussed above, the programmable input devices may include the portable scanning devices 16 or the remote computers 18. In preferred forms, a plurality of programmable input devices are provided at various locations throughout the distressed inventory warehouse.

The portable scanning devices 16 are preferably laser radio frequency (RF) terminals manufactured by Symbol Technologies. Each of the RF scanning devices 16 preferably includes a programmable microprocessor, a barcode scanner, an alphanumeric keypad, a portable printer, and a radio transceiver.

The RF scanning devices 16 communicate with the host computer 12 by transmitting and receiving radio signals to and from an RF transceiver 20 coupled with the host computer 12. The preferred RF transceiver 20 is also manufactured by Symbol.

A serial access bridge 22 also preferably manufactured by Symbol Technologies serves as a bridge between the RF transceiver 20 and the host computer 12. The serial access bridge 22 manages radio frequencies used for transmission, determines the most optimum frequencies in the surrounding environment, and determines the "chipping" sequence used to encrypt all transmissions between the RF scanning devices 16 and the host computer 12. The serial access bridge 22 also manages the transmission handoffs between the RF scanning devices 16 and the RF transceiver 20 by assigning unique configuration numbers to each of the RF scanning devices 16 and the RF transceiver 20 so that transmissions from each unit can be recognized.

Each remote computer 18 is preferably a conventional IBM compatible or equivalent microcomputer having a 486 or Pentium type microprocessor and a display screen; however, they may also be "dumb" terminals with input capabilities only. In preferred forms, a plurality of remote computers 18 are positioned in various strategic locations within the distressed inventory warehouse.

A plurality of data communications and terminal controllers 24 are provided for coupling the host computer 12 with the remote computers 18 and printers 14. The datacommunications and terminal controller 24 transfers data between the remote computers 18 and the host computer 12 and controls communications that would otherwise be controlled by the host computer 12, thus freeing the host computer 12 from these management functions. The datacommunications and terminal controllers 24 are preferably 16-port devices manufactured by Hewlett Packard and are connected with the host computer 12 by conventional LAN cabling.

As illustrated, the host computer 12 may also be coupled with remote computers 18 that are positioned outside the distressed inventory warehouse by a digital leased line 26. The digital leased line 26 is preferably a 4-wire conductor provided by an all-digital transmission network.

A pair of data/channel service units 28 provide for communication between the host computer 12 and the remote computers 18 positioned outside the distressed inventory warehouse. Each data/channel service unit 28 functions as a digital modem, boosting signals across the digital leased line 26. Each data/channel service unit 28 is designed for direct connection to the digital leased line 26 and is operable for transmitting data at up to 56,000 bits-per-second (bps). The data/channel service units 28 are preferably manufactured by Motorola.

II. Inventory Management Method

The method of the present invention manages distressed inventory or freight delivered to a distressed inventory warehouse. As used herein, inventory and freight are considered to be synonymous and are therefore used interchangeably. Additionally, as used herein, distressed inventory or freight is understood to include all types of inventory, particularly unidentified inventory, that is delivered to a distressed inventory warehouse by a freight carrier, including but not limited to, food items, automobile parts, clothing, personal hygiene products, art work, furniture, appliances, electronics, rugs, musical instruments, sports equipment, jewelry, and all other consumer wholesale and retail goods.

The inventory management method of the present invention is implemented with the aid of a computer program for operating the inventory management apparatus 10 described above. The computer program is preferably written in Pick Basic language, but may also be written in other conventional program languages. The computer program is preferably stored in the read-only memory (ROM) of the host computer 12, but may also be stored in the host computer's hard drive or in external disks or tapes for transfer to the memory of the host computer 12.

The source code for the computer program is reproduced in the attached microfiche appendix. The flow diagrams in the drawing figures provide a high-level overview of the computer program.

Many of the method steps described and illustrated herein require and operator or distressed inventory warehouse salesperson to enter or scan in information concerning the inventory. These scanning or entering steps can be performed at any of the components of the inventory management apparatus 10 including the host computer 12, any of the RF scanners 16 or any of the remote computers 18. This allows the inventory to be managed from anywhere within the distressed inventory warehouse.

FIG. 2 illustrates an overview of the inventory management method of the present invention. As illustrated generally in step 200 of FIG. 2, inventory or freight is first received by the distressed inventory warehouse and unloaded. Then, at step 202, the freight is sorted into several categories that determine how the freight will be managed within the distressed inventory warehouse. In preferred forms, the freight is sorted into the following categories: (1) freight that will be sold for scrap value (step 204); (2) freight that will be trashed (step 206); (3) over freight that will be reunited with the freight carrier or manufacturer (steps 208 and 210); (4) freight that will be stored, managed, and sold in the warehouse of the distressed warehouse inventory (steps 212, 214, 216, and 218); and (5) freight that will be stored, managed, and sold in a retail portion of the distressed inventory warehouse (steps 220, 222, 224, 226, and 228). The management, tracking, and sales of the freight during each of these categories or stages is discussed in more detail below.

FIG. 3 illustrates the freight unloading portion or subroutine of the present invention. In general, this portion or subroutine of the method provides for the unloading of the freight carrier, the identifying of the inventory delivered, and the creation and storage of inventory data records in the host computer 12 for use in managing and tracking the inventory as it passes through various stages within the distressed inventory warehouse.

In more detail, the inventory or freight is first delivered to the distressed inventory warehouse by a freight carrier. After the freight carrier has arrived, an operator logs the arrival time and unload start time of the freight carrier. Then, the operator initiates the unload subroutine or portion of inventory management method by accessing the appropriate subroutine in the host computer 12 as illustrated generally in step 300. Access may include conventional log-on or connection procedures and may provide an initial display screen informing the operator of the options available in the unload subroutine.

After the freight has been unloaded, it must be identified before proceeding through various stages in the distressed inventory warehouse. To identify the freight, the operator first determines whether the inventory has been delivered with a freight bill as illustrated in step 302.

If a freight bill has been provided with the inventory, the operator scans the bill or enters the freight bill information manually into the host computer 12 or one of the programmable input devices in communication with the host computer 12 in step 304. Alternatively, if a freight bill has not been provided with the inventory, the computer program prompts the operator to enter a description of the inventory including the inventory type, quantity, condition and other information to describe the inventory in step 306.

Next, in step 308, the computer program prompts the operator to enter the location within the distressed inventory warehouse where the inventory will be initially stored before it proceeds through further stages of the inventory management method. As described in more detail below, this location may include a warehouse area, a retail area, or other specialized areas for particular types of freight.

After receiving this inventory identification information and location information, the host computer 12 stores the information in an inventory data record as illustrated generally in step 310. The host computer 12 creates a unique inventory data record for each piece of inventory received in the distressed inventory warehouse. Inventory labels are then printed by a printer 14 coupled with the host computer 12 or any one of the remote computers 18 and applied to the pieces of inventory as indicated in step 312. Each inventory label preferably includes a machine-readable code that identifies or is associated with its respective inventory data record.

During the unload portion or subroutine of the inventory management method, the operators also sort the inventory into groups and place groups of inventory onto portable storage containers such as pallets. Then, the host computer 12 creates and stores a portable grouping unit (PGU) data record for each pallet. Each PGU data record identifies each and every piece of inventory on its respective pallet. The host computer 12 also creates a pallet identification number, or PGU number, for each pallet. Finally, PGU labels that identify their respective PGU data records are printed and applied to the pallets. Once the unload portion or subroutine of the inventory management method is complete, the operator logs the unload end time, and the pallets of inventory are moved to their proper locations within the distressed inventory warehouse.

FIG. 4 illustrates the retail order and loadout portion or subroutine of the inventory management method. In general, the retail order portion of the method manages distressed inventory in those situations involving a purchase by a customer of an item of distressed inventory which cannot be taken through cashier lanes, or a purchase of distressed inventory at a reduced price.

In more detail, the retail order portion of the inventory management method is initiated in step 400 by an operator or salesperson after a customer has requested service. The computer program first prompts the operator to enter his or her salesperson I.D. number and the customer I.D. number in step 402. The computer program may also prompt entry of the customer's name, phone number, and other identifying information.

Next, in step 404, the computer program prompts for entry of inventory information identifying the inventory that the customer wishes to purchase. In preferred forms, the operator performs this step by scanning the inventory label placed on the inventory with one of the portable RF scanning devices 16 to access the inventory data records stored in the host computer 12.

After the inventory information is scanned or entered, the RF scanner 16 or remote computer 18 used for scanning or entering displays the assigned price for the inventory in step 406 and asks whether the price is acceptable to the customer. The inventory management method gives the salesperson the ability to either accept the assigned price for the distressed inventory or to perform a markdown of the price.

In the event of a markdown, the computer program prompts the sales person to enter the new price and a markdown code used to identify the reason for the markdown in step 408. This subroutine of the inventory management method also provides for the creation and storage of a data record containing a permissible markdown range for each salesperson. After the new price is entered, the host computer 12 compares the new price to the permissible markdown range for the corresponding sales person and verifies whether the markdown amount is within the permissible range. If the price is confirmed, the host computer 12 updates the appropriate inventory data record with this markdown information. The method also allows the operator to call up a pricing history for the inventory that lists the prices at which similar or identical pieces of inventory were sold to aid in the markdown pricing decision.

After the price of an item has been established and confirmed, the inventory management apparatus 10 creates a retail order for the sale of the inventory in step 410. The retail order may be generated by any of the RF units, remote computers 18, or host computer 12 and includes the name and password of the salesperson, the customer identification information, the inventory data record code or number, and the quantity of the inventory purchased.

As illustrated generally in steps 412, 414, 416, 418, 420, and 422, the retail order and loadout portion or subroutine also allows a salesperson to delete an order, change an order, and add more orders. The subroutine also allows a salesperson to view a running dollar total of items being purchased by a particular customer as the retail order is being processed and save and print the retail order and to go to another retail order for another customer. The salesperson can then later return to the prior customer's retail order.

The retail order and loadout portion of the method also allows a salesperson to view, at any time, on all RF units and all remote computers 18 or terminals, all items entered on any of the retail orders by entering the retail order's unique assigned number into any one of the RF units or remote computers 18.

After a retail order has been completed, it is saved in the host computer 12 as a retail order data record and is printed either on a dedicated printer coupled with the host computer 12 or on one of the portable printers 14 coupled with the RF scanning devices 16 or remote computers 18 as illustrated in step 424. The customer is then given a copy of the retail order to take to any cash register for payment.

To begin a retail checkout at a cash register, the cashier first presses a retail order button on the register and enters the retail order number in step 426. The portion of the method allows the cashier to adjust the tax status of each individual item if the buyer is tax-exempt. The method also allows the cashier to delete any items from the retail order and add any additional items that the customer has brought to the register not included on the retail order. The method then directs a printer 14 to print each item listed on the order on a point of sale (POS) receipt.

After the customer has paid for the inventory, a "pick" ticket is automatically printed at the distressed inventory warehouse loadout dock as illustrated in step 428. The pick ticket is used by the loadout person to locate the inventory and to transfer it to the dock door for loadout. The pick ticket may include, among other things, the retail order number, customer name, non-carryout items sold, quantity and location.

The method also generates a listing of non-carryout, purchased items on the loadout person's terminal for identifying items for customer pick-up. The listing of non-carryout, purchased items appears on a remote computer 18 positioned at the loadout dock when the loadout person enters an order number appearing on the retail order. The method permits the loadout person to scan out the purchased items as they are transferred to the customer. The method causes an error message to appear on the loadout terminal in the event that a scanned item does not appear on the list of purchased items.

Finally, the retail order and loadout portion of the method prints a loadout confirmation after all non-carryout items have been scanned and transferred by the loadout person to the customer. The loadout person then has the customer sign the loadout confirmation to acknowledge receipt of the items. The host computer 12 stores the retail order information in step 430 and retains it for future pickups in cases where a customer cannot pick up all the items on the retail order.

FIG. 5 illustrates the warehouse and loadout portion or subroutine of the inventory management method of the present invention. In general, this portion of the inventory management method provides for the invoicing, sales, and loadout of inventory stored in the warehouse portion of the distressed inventory warehouse.

In more detail, a salesperson initiates the warehouse invoice and loadout process by accessing the appropriate subroutine in the host computer 12 in step 500. The computer program then prompts the salesperson to enter his or her I.D. number and customer identification as illustrated in step 502. The program then determines if the customer has a current invoice on file. If a current invoice is found, it is displayed.

Step 504 lists the sale options for the inventory and prompts for a selection. In preferred forms, the method permits a salesperson to scan or enter a portable grouping unit (PGU) number, then either price the whole PGU, or scan in individual items on the PGU with individual prices and descriptions. The input of the PGU number can be performed by any of the RF scanning units 16 or remote computers 18.

The inventory management method provides for the following sales options:

The subroutine also allows salespeople to delete or change the quantity, price, or description of any previously entered item or PGU.

After a sale has been made, the inventory management method creates a warehouse order and prints the order at any one of the printers 14 in step 506. The customer can then take this warehouse invoice to any cash register for purchase and loadout as described above. Step 508 then updates the appropriate inventory data records in the host computer 12. During loadout, the inventory management method requires the loadout person to sign for the sold items with a unique account number to ensure that the proper items were loaded out.

After a warehouse order or invoice has been created and saved, the warehouse portion or subroutine of the inventory management method allows a salesperson to call back the invoice to either add to it, make changes in it, or delete it. The method also allows the cashier to adjust a tax status of each individual item and allows the cashier to delete any items from the warehouse invoice and to add any additional items the customer has brought to the register not included on the warehouse invoice. Finally, once the inventory has been sold, paid for, and loaded out, the inventory management method indicates in the appropriate inventory data records that the purchased items are no longer in the distressed inventory warehouse.

To account for items which have been purchased but not picked-up, the inventory management method generates a report of purchased items that have not been picked up, identifying the items by customer name and phone number. This permits the distressed inventory warehouse to contact the customer. In the event that a customer purchases a whole PGU of multiple items and not all of the items are found at loadout, the inventory management method does not modify the inventory data records for the unfound items.

FIGS. 6 and 7 are continuations of the warehouse invoice and loadout portion or subroutine of the inventory management method and illustrate the hold/release and flag/unflag options of method. These portions or subroutines permit any item or PGU entered on an invoice to be placed in a hold, release, flagged, or unflagged status.

For example, these subroutines permit a salesperson to input into the inventory management apparatus 10 a special status on any unsold item or PGU. The special status regarding a particular item is transmitted to the host computer 12 by way of any one of the RF scanning units 16 or remote computers 18 and is added to the appropriate inventory data records. The inventory data records can then be accessed by any RF scanning unit 16 or remote computer 18 to obtain this special status information. The special status information is intended to alert any other salesperson of special information about that particular item, e.g., that a bid has already been placed on that item, that the item appears on a faxed bid offering, or that a buyer has made an appointment to see the item.

As illustrated generally in steps 600, 602, and 604 of FIG. 6 and steps 700, 702, and 704 of FIG. 7, the inventory management method prompts a salesperson wishing to add a special status to enter his or her identification, comments regarding the special status, and the date the special status was created. Once a special status has been entered for a particular piece of inventory, the inventory management method prohibits the sale of that piece of inventory. The inventory management method allows for the release of the special status to release the item for sale after a special release code has been entered into any of the portable RF units or remote computers 18.

FIG. 8 illustrates the bid sale and loadout portion or subroutine of the inventory management method. In general, this subroutine provides for the selling of inventory in the warehouse by a bidding or auction process, with the inventory typically being sold to the highest bidder.

In more detail, the bid sale and loadout process is begun when a salesperson accesses the appropriate subroutine in the inventory management method in step 800. To prepare the inventory for bid sale, it is first marked with bid lot numbers in step 802. Customers then submit bids for the inventory, and the bids are entered into any one of the RF scanning devices 16 or remote computers 18 in step 804.

Once all bids are received, the host computer 12 compares the bids and determines the highest bid price in step 806. The sales people then select the successful bidder, which is usually the high bidder. The inventory management method then creates, saves and prints a bid sale invoice in step 808. A copy of the bid sale invoice is given to the successful bidder in step 810 for loadout as described above. Finally, the appropriate inventory data records are updated and saved in step 812.

FIG. 9 illustrates the retail pricing and marking portion or subroutine of the inventory management method. In general, this subroutine provides for the separating or "exploding" of inventory into saleable units, pricing of inventory based on criteria determined from previous pricing steps, and marking of the inventory with new price labels or tags.

In more detail, this portion of the inventory management method is initiated when a sales person access the appropriate subroutine in the host computer 12 by way of a remote computer 18 in step 900. In preferred forms, a dedicated remote computer or computers are provided for these pricing and marking steps of the inventory management method.

As illustrated in step 902, salesperson or operator first sorts the inventory to separate out items that require special attention during pricing. For example, items of art, electronics, or building materials are often priced and managed differently than other types of inventory.

The operator then scans or enters the information on the inventory label in step 904 and review the information stored in the inventory data record. This allows the operator to determine such things as the quantity of that particular type of inventory that was received.

The operators may decide to divide up boxes of items into individual or package units that are more saleable in step 908. For example, distressed inventory warehouses often receive large boxes full of individual bars of soap. Since many consumers would rather purchase individual bars of soap rather than an entire carton, the inventory management method provides for the separating of the individual items into saleable units. This process is commonly referred to a "exploding".

After the inventory is exploded, a new "child" inventory data record is created with a number that relates to the original or "parent" inventory data record. The inventory management method then prompts the operators to fill in these new child data records with pricing information for the exploded items.

To assist the operator in pricing the individual saleable items, the items' UPC codes can be scanned or entered in step 910 to provide information which may be useful in pricing the item. The operator is also prompted to enter other information into the child inventory data record including the quantity and unit of measure of the item being priced, a detailed description of the item, the manufacturer of the product, a departmental code that corresponds with the product category, and a reference price for which other stores such as Wal-Mart are selling the item.

After entering the above-described information, the operator is prompted to enter a selling price for the item in step 914. This selling price is saved with the child inventory data record for use in pricing other identical or similar types of inventory.

The inventory management method also provides for the creation and updating of a UPC code data base as illustrated generally in step 912. Each time an item's UPC code is scanned, the UPC information is saved in the UPC data base. The UPC data base also includes all of the information saved in the child data records described above. Thus, once a new UPC code is stored in the UPC data base, a permanent history of that product including detailed sales and markdown information is maintained. Then, each successive time that a UPC code is scanned for a product that has previously been scanned, the complete pricing history for that item can be retrieved and used for determining prices for the item.

FIG. 10 illustrates the markdown/markup portion or subroutine of the inventory management method. In general, this subroutine provides for the marking down or marking up of the price or prices of an entire stock of a particular type of inventory that has been previously priced in the above-described pricing subroutine. This subroutine also allows for the marking down or marking up of the price or prices of selected portions of the stock of a particular type of inventory.

In more detail, the markdown/markup process is initiated when an operator accesses the appropriate subroutine of the inventory management method in step 1000. The inventory management method then prompts the operator to scan the inventory label or enter the inventory numbers on the label for the items that are to be marked down or up. As described above, these inventory numbers can be entered in either the RF scanning devices 16 or the remote computers 18. The inventory management method then retrieves the appropriate inventory data record and displays on the terminal of the RF scanner or remote computer 18 the date the item was originally priced, the quantity of the item currently in the distressed inventory warehouse, the original price of the items, the product description, the product manufacturer, the most recent markdown/markup date if any, and the most recent markdown/markup price if any.

All of the above-described information can be used by the operator for determining a new price for the item. For example, if the operator learns that a large quantity of the item is currently in the distressed inventory warehouse and that recent markdown prices have failed to increase sales of the item, he or she can more drastically reduce the price to increase sales.

After the operator enters the inventory numbers for the inventory that is to be marked up or marked down, the inventory management method prompts the operator to enter a new price in step 1002. The inventory management method then prompts the operator to input a reason code for the adjustment in step 1004 and modifies and updates the appropriate inventory data record to reflect the new price in step 1006. Finally, new price tags with the new updated prices are printed and applied to the inventory in step 1008.

Although the invention has been described with reference to the preferred embodiment illustrated in the attached drawing figures, it is noted that equivalents may be employed and substitutions made herein without departing from the scope of the invention as recited in the claims.

## Claims

claimed as new and desired to be protected by letters patent includes the following:

1. A method for managing inventory with the aid of a computer, said method comprising the steps: information including inventory identification information and inventory destination information; computer; computer after storing said inventory information, said inventory label including an inventory code associated with said inventory data record; placed in an inventory destination; communication with the computer for accessing said inventory data record; inventory information changes; computer; and receipt of said updating information.

2. The method as set forth in claim 1, said updating information including order information indicating that a customer has offered to buy the inventory, said updating step including updating said data record to indicate that the customer has offered to buy the inventory.

3. The method as set forth in claim 2, further including the step of creating and storing said order information in an order data record in said computer.

4. The method as set forth in claim 3, further including the step of printing an order receipt including said order information stored in said order data record.

5. The method as set forth in claim 2, further including the steps: permissible price reduction range for each salesperson who may sell the inventory; in said computer.

6. The method as set forth in claim 5, said order information including a salesperson password, a customer code identifying the customer, an offered purchase price for the inventory, and a quantity of the inventory ordered.

7. The method as set forth in claim 6, further including the step of comparing in said computer said offered purchase price to said permissible price reduction range for the employee to determine if the offered purchase price falls within said permissible price reduction range for the salesperson.

8. The method as set forth in claim 1, said updating information including price change information indicating that the price of the inventory has been changed, said updating step including updating said data record to indicate that the price of the inventory has been changed.

9. The method as set forth in claim 1, said updating information including tracking information indicating that the inventory has been moved to a new location, said updating step including updating said data record to indicate that the inventory has been moved to a new location.

10. The method as set forth in claim 1, the inventory having a machine readable freight bill including inventory information describing the inventory, said method further including the steps: read said inventory information; and the computer.

11. A method for tracking and selling multiple pieces of inventory with the aid of a computer and a plurality of portable scanning devices in communication with the computer, said method comprising the steps: inventory placed in said storage container; storage container will be stored; portable grouping unit data record in the computer; associated with said portable grouping unit data record with a printer coupled with the computer; devices when a customer wishes to buy the inventory in the storage container; computer; and the order information to indicate that the inventory placed in the storage container has been purchased.

12. The method as set forth in claim 11, further including the step of creating and storing in said computer an order code including said order information.

13. The method as set forth in claim 12, further including the step of printing an order receipt including the order information stored in said order code.

14. The method as set forth in claim 13, said order information including a salesperson password, customer information identifying the customer who is buying the inventory, a sales price of the inventory, and a quantity of the inventory ordered.

15. The method as set forth in claim 11, further including the steps: portable scanning device when the customer wishes to buy said selected pieces of inventory; customer wishes to buy said selected pieces of inventory; computer; and response to receipt of the order information to indicate that said selected pieces of inventory have been purchased.

16. A method for managing distressed inventory received in a distressed inventory warehouse with the aid of a computer, said method comprising the steps: carrier; inventory; identified inventory, said inventory information including inventory identification information and inventory destination information; inventory in a separate inventory data record in the computer; records for all of said pieces of identified inventory; identified inventory with a printer coupled with the computer, said inventory labels each including an inventory code associated with its respective inventory data record; and inventory for tracking said pieces of identified inventory as they are moved through the warehouse.

17. A distressed inventory management apparatus for managing distressed inventory comprising: distressed inventory, said inventory information including inventory identification information and inventory destination information, to store said received inventory information in an inventory data record, and to create an inventory code associated with said inventory data record; machine-readable inventory label including said inventory code associated with said inventory data record; and inventory code, to receive updating information when said inventory information changes, and to transmit said updating information to said computer; information from said input device and to update said inventory data record in response to receipt of said updating information.

18. A method for managing distressed, unidentified inventory with the aid of a computer, said method comprising the steps: computer; communication with the computer for accessing said inventory data record; inventory information changes; computer, and reciept of said updating information.

19. The method as set forth in claim 18, further including the steps of; computer, said inventory label including an inventory code associated with said inventory data record; and