Seller automated engine architecture and methodology for optimized pricing strategies in automated real-time iterative reverse auctions over the internet and the like for the purchase and sale of goods and services
View Patent ↗An improved seller automated engine architecture methodology particularly (though not exclusively) for use in automated real-time iterative reverse auctions over the Internet and the like for the purchase and sale of goods and services, providing a choice of architectural implementations while enabling price optimization on market share-directed considerations, specific sales target-directed implementations, seller utility derivative-following implementations, model optimizer implementations and explorations, mathematical optimization-oriented and rules-based implementations.
1. An automatic seller and price quotation system having, in combination, a seller automatic engine storing seller-specific predetermined market strategy, business objectives, and market condition information and responsive to buyer requests in order automatically to create a response to the price quotation based upon the buyer request and within the respective guidelines of seller-specific predetermined information stored in that seller automatic seller engine;
a processor for initiating an iterative real-time automatic seller engine competition for bettering price quotations within said respective guidelines until a best price quotation is received;
the seller automatic engine being adapted to process multiple price optimizers through one or more architectural implementations within the seller automatic engine, at least two of the price optimizers configured for different goals, the architectural implementations selected from the group consisting of a parallel processing architecture, a pipeline architecture, a hub and spoke architecture, and a hybrid architecture.
2. The system of claim 1 wherein each price optimizer is configured for an architecture selected from the group consisting of market-share directed implementation, specific sales target-directed implementation, seller utility derivative-following implementation, selected model optimizer implementation with exploration features, mathematical optimization oriented implementation, and a rule-based implementation.
3. A system as claimed in claim 1 wherein the multiple price optimizers are provided to the seller engine through a price management unit for enabling price optimization for one or more of several goals or business objectives of the seller including an objective selected from the group consisting of global price, events, and supplier's breakpoint.
4. The system of claim 3 wherein the price optimization is effected in light of inputted market data, historical data and seller targets.
5. The system of claim 3 wherein all optimized prices within the seller engine are integrated to produce a seller price quote.
6. The system of claim 5 wherein price management is implemented within the seller engine by mathematical logic optimization that addresses each of price optimization and optimized price integration.
7. The system of claim 6 wherein price optimization within the seller engine is effected for one or more of several goals or business objectives of the seller, including global price, events, and suppliers breakpoint.
8. The system of claim 7 wherein price optimizing within the seller engine is effected by an implementation selected from the group consisting of target-directed implementation, market-share implementation, model optimization with exploration implementation, utility derivative-following implementation, and rules-engine implementation.
9. The system of claim 8 wherein a utility derivative-following price bid implementation function is used, and the price is adjusted by the amount of utility earned in a previous period as a result of a price change.
10. The system of claim 8 wherein, when a price request is received, an expected contribution to the seller utility from that request is calculated such that the optimal price will be the price that maximizes such contribution.
11. The system of claim 10 wherein the utility function is selected from the group consisting of substantially of exponential, piecewise exponential, linear, piecewise linear, and hybrid, and wherein each price optimizer is configurable to be one of a sales target optimizer, a market share optimizer, an event optimizer, a supply-break optimizer, a price watch optimizer, or an other optimizer, and each price optimizer is configurable for implementation as a market share-directed implementation, a sales target-directed implementation, a utility derivative-following implementation, or a rules engine implementation.
12. The system of claim 11 wherein an estimation of historic bid-response function parameters is enabled by minimizing squared errors through equations
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or by maximum likelihood estimation through equations
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wherein for the auction i, ρ( ) is the historic bid-response function, W i is assigned the value 1 if the auction is won and 0 if the auction is lost, w i is a weight which expresses the confidence in the accuracy or relevance, a, b, c, and d are scaling factors where a is a parameter for non-price factors, b is a parameter for price factors, c is a parameter for order size, d is a parameter for the recent historic average market, Q i is the order size, p i is the unit price quoted by the seller, and p ci is the recent historic average unit price in the market.