Patent ID: 7236949

Claim:
Computer implemented system for estimating the demand dependent unit stockout cost b ij =b(λ ij ) of an i th consumer item at a j th location of a single period inventory system, the system comprising: (a) a database for storing historical sales data of sales information of at least the i th consumer item where i=1, 2, . . . , m at at least the j th location where j=1, 2, . . . , n of the single period inventory system; (b) a forecast engine for forecasting the mean demand λ ij of at least the i th consumer item at at least the j th location of the single period inventory system on the basis of the historical sales data; (c) a unit cost file for storing the unit retail price p ij , the unit production cost c ij , and the unit return cost g ij of at least the i th consumer item at at least the j th location of the single period inventory system; and (d) a stockout cost application for estimating the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system as a function of its associated p ij , c ij , g ij , and λ ij wherein said stockout cost application minimizes |b ij CEST(λ ij ,D ij )−(c ij −g ij )CER(λ ij ,D ij )| for determining the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system.