Patent ID: 7251615

Claim:
A computer-based method of markdown management comprising: inputting to a computer system historical sales data for an item of commerce; calculating, with the computer system, a price elasticity of sales of the item of commerce as a function of an historically observed consumer demand rate reflected by historical sales data, said calculating step including fitting a demand model to that historically observed consumer demand rate of the item of commerce, said historically observed consumer demand rate including a non-time-dependent price elasticity term; determining, with the computer system, a simulated sales rate of the item of commerce that would have been realized under a price markdown scenario, the determining of the simulated sales rate taking into account the price elasticity of sales of the item of commerce as a function of an historically observed consumer demand rate reflected by historical sales data; generating, with the computer system, an estimate of a maximum possible gross margin for the item of commerce, where the maximum possible gross margin include the simulated sales rate under the price markdown scenario as a function of price p and time t; and generating with the computer a display showing differences between the maximum possible gross margin and the historical sales data for use by sales personnel in evaluating pricing of the item.