Patent ID: 7801753

Claim:
A method for producing optimal purchase schedules for an enterprise, using an electronic computing device, the method comprising the steps of: causing the electronic computing device to create a plurality of supply channel models, said models defining attributes of a plurality of supply channels, wherein the attributes include supply channel master data of items, requisitioning sites, vendors, vendor sites, transport modes, supply agreement parameters, and corporate business rules; creating a scope for planning, wherein creating the scope for planning includes defining the optimization configurations by specifying the following parameters of an optimizer: the number of time buckets through which material can be ordered in advance, the point in the planning horizon through which lot-sizing rules must be applied, the point in the planning horizon through which minimum order lot-size rules must be applied, a flag for allowing shortness either by lot size multiple or minimum lot size, and a flag for ignoring prices and costs, wherein creating the scope for planning further includes: solving linear programming models to determine how an order quantity of a desired item is to be split between multiple suppliers, wherein the solving comprises: determining a first optimal solution by solving a first iteration that ignores lot sizing restrictions, determining a second optimal solution by solving a second iteration that considers the two closest values to the first optimal solution that are multiples of a desired lot size; analyzing output purchase schedules, wherein the output purchase schedules consist of real and virtual planning scenarios, through analysis of purchase costs, basic prices, contractual obligations, rebates and penalties, fulfillment, and compliance with contractual terms; analyzing enterprise compliance, wherein analyzing enterprise compliance comprises analyzing compliance with purchase quantities and flex limits, payment terms, lead time provided for order processing, supply and transportation costs and taxes, and basic prices, before the output purchase schedules are finalized as orders and sent to a vendor; and generating, by the electronic computing device, an optimal purchase plan for obtaining quantities of an item from multiple potential vendors based on the supply channel models, a solution to the second linear programming iteration, the analyzed output purchase schedules, and the analyzed enterprise compliance.