Patent ID: 8676632

Claim:
A computer system for optimizing a price of a product, the system comprising: at least one processing unit and at least one memory unit; a first set of computer-readable instructions stored in the at least one memory unit for causing the at least one processing unit to define an optimal price for said product in satisfaction of a first constraint and a second constraint, said first constraint requiring that a quantity of the product predicted to be sold during a first time interval be less than an inventory of the product and said second constraint requiring that a quantity of product predicted to be sold by an end of a second time interval exhaust the inventory of the product; wherein the first set computer-readable instructions stored in the at least one memory unit cause the at least one processing unit to define the optimal price by: Pr ⁡ ( y it = 1 ) = I ⁡ ( i ∈ A ) ⁢ exp ⁡ ( V it ) ( 1 + ∑ j = 1 B ⁢ I ⁡ ( i ∈ A ) ⁢ exp ⁡ ( V jt ) ) ′ where: V it =β 0it +β 1 p i,t-1 +β 2 d i,t-1 +p i,t (β 3 +β 4 s t )+ d i,t (β 5 +B 6 s t ) where: q it =I ( iεA ) Q M Pr ( y it =1) where: ∑ t = 1 x ⁢ q it ≤ I i where: ∑ t = 1 y ⁢ q it ≥ I i and where: q it is a quantity of item i period t, A is a set of SKUs in the choice set, B is a cardinality of set A, I i is an inventory of product i, T is a number of periods over which to optimize, t is an index for time periods, s t is a seasonality for period t, p it is a price of item i in period t, d it is a deal percentage of item i in period t, Q M is expected traffic, and β x , β xy , β xyz are constants in a regression model.