Patent ID: 7844510

Claim:
A computer-implemented method of sequencing items for absorption costing, said items classified according to a classification identifying parent-child relationships of said items, said method comprising: creating at a computer system an initial hierarchy comprising said items, each of said items associated with a hierarchy level of a plurality of hierarchy levels based on one or more cost groups in which each of said items is located, each cost group representing one or more inventory sites; modifying at the computer system said initial hierarchy using a first iterative process to reposition a plurality of said items in the plurality of hierarchy levels, wherein said first iterative process generates a modified hierarchy and comprises: accessing an item in the hierarchy, said accessed item associated with an accessed hierarchy level; identifying a second item in the hierarchy, wherein the second item corresponds to a child item of the accessed item in the classification; upon determining that the hierarchy level associated with the second item is higher in the hierarchy than the accessed hierarchy level, changing the position of the accessed item in the hierarchy such that the accessed item is associated with a new hierarchy level different from the accessed hierarchy level and wherein the new hierarchy level is above the hierarchy level associated with the second item; repeating, using the computer system, said modifying until an iteration is completed without repositioning any of said plurality of said items in the hierarchy; determining, using the computer system, an absorption costing sequence for said items from said modified hierarchy for the iteration completed without repositioning any of said plurality of said items in the hierarchy; calculating, using the computer system and said absorption costing sequence in a second iterative process, the cost of an item of said plurality of cost groups; and repeating said second iterative process using the computer system until the costs of a plurality of items of said plurality of cost groups have been calculated.