Patent ID: 7664683

Claim:
A system for determining a distribution policy for a single period inventory system, the single period inventory system controlling a distribution of consumer items with limited shelf lives wherein at an end of the limited shelf life the consumer items lose substantially all of their initial consumer value, the system comprising: (a) a database for storing historical sales data of sales information of each i th consumer item where i=1, 2, . . . , m at each j th location where j=1, 2, . . . , n of the single period inventory system, the database stored in a memory and used by a processor; (b) a forecast engine for forecasting the mean demand λ ij of each i th consumer item at each j th location of the single period inventory system on the basis of the historical sales data; and (c) an optimization application comprising a software module executing on a computer, the software module operable to: initially allocate draw units to each j th location equal to the mean demand λ ij of an i th consumer item at each j th location; determine a first location that meets a pre-selected allocation decision criterion comprising at least the draw units allocated to each j th location for the i th customer item, and the mean demand λ ij for the i th customer item at each j th location; allocate a first one and only one additional draw unit to the first location; determine a second location that meets the pre-selected allocation decision criterion with the first location having the first one and only one additional draw unit, and allocate a second one and only one additional draw unit to the second location; and determine the second location step above until at least one constraint is satisfied, the at least one constraint being based on performance metrics including at least one of safety stock, expected sellout, expected stockout, or expected return.