Computer implemented system for estimating the demand dependent unit stockout cost of a consumer item at a location of a single peroid inventory system, stockout cost application therefor, and method therefor

1. Computer implemented system for estimating the demand dependent unit stockout cost b ij =b(λ ij ) of an i th consumer item at a j th location of a single period inventory system, the system comprising:

(a) a database for storing historical sales data of sales information of at least the i th consumer item where i=1, 2, . . . , m at at least the j th location where j=1, 2, . . . , n of the single period inventory system;

(b) a forecast engine for forecasting the mean demand λ ij of at least the i th consumer item at at least the j th location of the single period inventory system on the basis of the historical sales data;

(c) a unit cost file for storing the unit retail price p ij , the unit production cost c ij , and the unit return cost g ij of at least the i th consumer item at at least the j th location of the single period inventory system; and

(d) a stockout cost application for estimating the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system as a function of its associated p ij , c ij , g ij , and λ ij wherein said stockout cost application minimizes |b ij CEST(λ ij ,D ij )−(c ij −g ij )CER(λ ij ,D ij )| for determining the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system.

2. The system according to claim 1 wherein said stockout cost application determines the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b ij CEST(λ ij ,D ij ) thereat, and the cost of its conditional expected returns (c ij −g ij )CER(λ ij ,D ij ) therefrom.

3. The system according to claim 1 wherein the consumer item is a printed media publication.

4. A computer readable storage medium on which a stockout cost application is store, which is capable of operating on at least one computer, and which is capable of estimating the demand dependent unit stockout cost b ij =b(λ ij ) of an i th consumer item at a j th location of a single period inventory system wherein

the stockout cost application is operable to: receive the unit retail price p ij , the unit production cost c ij , the unit return cost g ij , and the mean demand λ ij of the i th consumer item at the j th location of the single period inventory system; and

estimate the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system as a function of its associated p ij , c ij , g ij , and λ ij wherein said stockout cost application minimizes |b ij CEST(λ ij ,D ij )−(c ij −g ij )CER(λ ij ,D ij )| for determining the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system.

5. The stockout cost application according to claim 4 and operable to determine the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b ij CEST(λ ij ,D ij ) thereat, and the cost of its conditional expected returns (c ij −g ij )CER(λ ij ,D ij ) therefrom.

6. The stockout cost application according to claim 4 wherein the consumer item is a printed media publication.

7. Computer implemented method for estimating the demand dependent unit stockout cost b ij =b(λ ij ) of an i th consumer item at a j th location of a single period inventory system, the method comprising the steps of:

(a) storing historical sales data of the sales information of at least the i th consumer item where i=1, 2, . . . , m at at least the j th location where j=1, 2, . . . , n of the single period inventory system;

(b) forecasting the mean demand λ ij of at least the i th consumer item at at least the j th location of the single period inventory system on the basis of the historical sales data;

(c) receiving the unit retail price p ij , the unit production cost c ij , and the unit return cost g ij , of at least the i th consumer item at at least the j th location of the single period inventory system;

(d) estimating the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system as a function of its associated p ij , c ij , g ij , and λ ij wherein said stockout cost application minimizes |b ij CEST(λ ij ,D ij )−(c ij −g ij )CER(λ ij ,D ij )| for determining the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system; and

(e) communicating the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system.

8. The method according to claim 7 wherein step (d) includes determining the demand dependent unit stockout cost b ij =b(λ ij ) of the i th consumer item at the j th location of the single period inventory system to substantially balance the cost of its conditional expected stockout b ij CEST(λ ij ,D ij ) thereat, and the cost of its conditional expected returns (c ij −g ij ) CER(λ ij ,D ij ) therefrom.

9. The method according to claim 7 wherein the consumer item is a printed media publication.