System and Method for Procurement Strategy Optimization Against Expressive Contracts

1 . A computer-implemented method of procurement strategy optimization for a buyer against expressive contracts on goods or services comprising:

(a) storing in a computer storage accessible to a processor of a computer data about a plurality of contracts, wherein the data about each contract specifies at least the following: one good or service associated with the contract, a payment rule to determine a payment for the purchase of at least one quantity of at least one good or service under the contract, and a seller under the contract; and wherein the data about a first one of the contracts also specifies a trigger condition and an associated effect, wherein the effect causes at least one of the following: a payment to occur, a future payment to change, a future payment to change contingent on a purchase transaction, or a constraint on allowable purchases to change;

(b) storing in the computer storage a forecast of a future quantity of at least one good or service to be purchased;

(c) the processor of the computer determining a first plan for future procurement against at least one of the plurality of contracts in step (a) based on the good or service and the payment rule in step (a), the trigger condition and the associated effect in step (a), and the forecast in step (b); and

(d) responsive to the processor automatically approving the first plan subject to one or more predetermined rules or the processor receiving an approval of the first plan, the processor causing the first plan to be adopted for future procurement.

2 . The method of claim 1 , wherein the trigger condition includes at least one of the following conditions:

the time of a purchase transaction occurs subsequently to a given point in time;

the volume quantity of at least one good or service, summed over a set of at least one purchase transaction associated with the first contract, exceeds a quantity threshold;

the monetary value of at least one good or service, summed over the payments of each purchase transaction of a set of at least one purchase transaction associated with the first contract, exceeds a value threshold, where the payment in a purchase transaction is specified in a purchase transaction or determined by the payment rule associated with the first contract;

the volume quantity of a first set of at least one good or service, summed over a first set of at least one purchase transaction associated with the first contract, when calculated as a fraction of the volume quantity of a second set of at least one good or service, summed over a second set of at least one purchase transaction, exceeds a fractional-quantity threshold; and

the monetary value of a first set of at least one good or service, summed over a first set of at least one purchase transaction associated with the first contract, when calculated as a fraction of the monetary value of a second set of at least one good or service, summed over a second set of at least one purchase transaction, exceeds a fractional-value threshold.

3 . The method of claim 1 , wherein the data about the first contract further includes information about a history of purchases made in connection with the first contract, where the satisfaction of the trigger condition is based on said information.

4 . The method of claim 1 , wherein the processor determines the first plan subject to at least one of the following objectives:

minimizing the estimated total payment made by the buyer for the forecast of future purchase of goods or services to be purchased under the first plan; and

maximizing the estimated total value to the buyer, net of estimated total payment, for the forecast of future purchase of goods or service in to be purchased under the first plan.

5 . The method of claim 1 , wherein the first plan adopted for future procurement in step (d) includes at least one of the following:

a target quantity for at least one good or service to be purchased in connection with a contract during a time interval;

a target quantity fraction for at least one good or service to be purchased in connection with a contract during a time interval relative to all purchases of the same or substitutable good or service;

a target monetary amount for at least one good or service to be purchased in connection with a contract during a time interval;

a target monetary amount fraction for at least one good or service to be purchased in connection with a contract during a time interval relative to all purchases of the same or substitutable good or service;

a specification of at least one purchase order wherein, when the purchase order occurs, then procurement against a particular contract is mandatory;

a specification of at least one purchase order wherein, when the purchase order occurs, then procurement against a particular contract is recommended;

a specification of a plurality of purchase orders and an alternation, wherein, when the plurality of purchase orders occurs, then procurement of each purchase order against an alternation between a plurality of contracts is mandatory; and

a specification of a plurality of purchase orders and an alternation, wherein, when the plurality of purchase orders occurs, then procurement of each purchase order against an alternation between a plurality of contracts is recommended.

6 . The method of claim 1 , wherein the effect includes at least one of the following:

a payment due by the buyer to the seller associated with the first contract or from the seller associated with the first contract to the buyer;

a payment between the buyer and the seller associated with the first contract, where the amount and due date of this payment are based on the history of purchases made in connection with the first contract;

a payment between the buyer and the seller associated with the first contract, where the amount and due date of this payment are based on the history of purchases made in connection with the first contract and on external data whose origin is specified within the first contract;

a change of a payment for future purchases on at least one good or service;

a change of a payment for future purchases on at least one good or service based on a payment amount for the good or service when the trigger condition is satisfied and on a history of purchases made in connection with the first contract;

a change of a payment for future purchases on at least one good or service based on a payment amount for the good or service when the trigger condition is satisfied, on a history of purchases made in connection with the first contract, and on external data that is specified within the first contract;

a change of a payment to be made for a purchase transaction that is associated with the trigger condition; and

a change of a capacity constraint that limits the quantity volume that a buyer can purchase on at least one good or service for future purchases.

7 . The method of claim 6 , wherein the external data whose origin is specified within the first contract is either a price index, a tariff, or a financial index.

8 . The method of claim 1 , further including:

the processor receiving a second plan for future procurement against at least one of the plurality of contracts in step (a); and

the processor determining the first plan for future procurement based one at least one of the following:

a quantity difference of at least one good or service between the first plan and the second plan; and

a quality difference between the first plan and the second plan, where the quality of each plan for future procurement is determined by at least one of the following:

an estimated total payment to be made by the buyer for the forecast of future purchase of goods or services to be purchased under the plan; and

the estimated total value to the buyer, net of estimated total payment, for the forecast of future purchase of goods or service in claim 1 to be purchased under the plan.

9 . The method of claim 1 , further including:

storing in the computer storage a second plan for future procurement against at least one of the plurality of contracts in step (a), wherein the one or more predetermined rules in step (d) includes at least one of the following:

a quantity difference of at least one good or service between the first plan and the second plan; and

a quality difference between the first plan and a second plan, where the quality of each plan for future procurement is determined by at least one of the following:

an estimated total payment to be made by the buyer for the forecast of future purchase of goods or services to be purchased under the plan; and

the estimated total value to the buyer, net of estimated total payment, for the forecast of future purchase of goods or service to be purchased under the plan.

10 . The method of claim 1 , further including:

storing at least one business rule in computer storage; and

the processor determines the first plan based on the business rule.

11 . The method of claim 1 , wherein at least one of the plurality of contracts is stored in the computer storage in response to a sourcing event in which a plurality of sellers compete through a computer network bidding process to enter into at least one contract with the buyer for future procurement of at least one good or service.

12 . The method of claim 11 , wherein the storage of the at least one contract in the computer storage in response to the sourcing event is based on a business rule which is stored in the computer storage and which is utilized by the processor within the sourcing event.

13 . The method of claim 10 , wherein the storage of the at least one business rule in the computer storage is in responsive a sourcing event that utilizes the same or a different business rule, wherein the sourcing event includes a plurality of sellers competing through an electronic bidding process that is under the control of the processor to enter into at least one contract with the buyer for future procurement of at least one good or service.

14 . The method of claim 1 , further including the processor determining the first plan in step (c) subject to a current value or a forecast on the future value for at least one of the following:

a spot price for at least one good or service; and

external data whose origin is specified within the first contract.

15 . The method of claim 14 , wherein the external data whose origin is specified within the first contract is either a price index, a tariff, or a financial index.

16 . The method of claim 1 , wherein step (c) includes:

the processor outputting a candidate plan;

the processor receiving a first business rule in response to outputting the candidate plan; and

the processor determining the first plan subject to the first business rule.

17 . The method of claim 1 , further including the processor determining the first plan in step (c) subject to at least one of the following:

a bid from a seller specifying at least one contract that the seller would be willing to enter into with the buyer; and

at least one offer from a seller to modify at least one of the following: one of the trigger conditions, one of the effects, or a payment rule in a current contract.

18 . A computer-implemented method of procurement strategy optimization for a buyer against expressive contracts on goods or services comprising:

(a) storing in a computer storage accessible to a processor of a computer data about a plurality of contracts, wherein the data about each contract specifies at least the following: one good or service associated with the contract, a payment rule to determine a payment for the purchase of at least one quantity of at least one good or service under the contract, and a seller wider the contract; and wherein the data about a first one of the contracts also specifies a trigger condition and an associated effect, wherein the effect causes at least one of the following: a payment to occur, a future payment to change, a future payment to change contingent on a purchase transaction, or a constraint on allowable purchases to change;

(b) storing in the computer storage a forecast of a future quantity of at least one good or service to be purchased;

(c) the processor of the computer determining a first plan for future procurement against at least one of the plurality of contracts in step (a) based on the good or service and the payment rule in step (a), the trigger condition and the associated effect in step (a), and the forecast in step (b); and

(d) responsive to the first plan determined for future procurement determined in step (c), the processor: amending at least one contract stored in the computer storage in step (a), replacing at least one contract stored in the computer storage in step (a) with an amended form thereof, or storing one or more new contracts in the computer storage.

19 . The method of claim 18 , wherein:

step (c) includes the processor outputting information that depends on the first plan; and

step (d) includes the processor receiving one of the following in response to outputting the information that depends on the first plan: the amendment to the contract stored in the computer storage in step (a); the amended form of the at least one contract stored in the computer storage in step (a); or the one or more new contracts.

20 . The method of claim 19 , wherein, the decision in step (d) to amend at least one contract stored in the computer storage is based on at least one of the following:

a spot price on at least one good or service;

a forecast of a future spot price on at least one good or service;

an estimate of bids received in a sourcing event; and

an estimate of the payment rules, and trigger and effect conditions, in new contracts.

21 . The method of claim 19 , further including:

(e) storing in the computer storage a second plan for future procurement against at least one of the plurality of contracts stored in the computer storage, wherein the second plan is either determined by the processor or received by the processor from an external source and is based on the forecast in step (b); and

(f) responsive to the processor automatically approving the second plan subject to one or more predetermined rules or the processor receiving an approval of the second plan, the processor causing the second plan to be adopted for future procurement.

22 . The method of claim 19 , where the one or more new contracts in step (d) are stored in the computer storage by the processor in response to a sourcing event that includes a plurality of sellers competing through a networked bidding process to enter into at least one contract with the buyer for future procurement of at least one good or service.

23 . The method of claim 21 , wherein the second plan in step (e) is further based on:

a quantity difference of at least one good or service between the first plan and the second plan; and

a quality difference between the first plan and the second plan, where the quality of each plan for future procurement is determined by at least one of the following:

an estimated total payment to be made by the buyer for the forecast of future purchase of goods or services to be purchased under the plan; and

the estimated total value to the buyer, net of estimated total payment, for the forecast of future purchase of goods or service to be purchased under the plan.

24 . The method of claim 21 , the one or more predetermined rules is based on:

a quantity difference of at least one good or service between the first plan and the second plan; and

a quality difference between the first plan and the second plan, where the quality of each plan for future procurement is determined by at least one of the following:

an estimated total payment to be made by the buyer for the forecast of future purchase of goods or services to be purchased under the plan; and

the estimated total value to the buyer, net of estimated total payment, for the forecast of future purchase of goods or service to be purchased under the plan.

25 . The method of claim 21 , further including storing at least one business rule in the computer storage, wherein the processor causes the second plan to be adopted for future procurement based on the business rule.

26 . The method of claim 21 , further including:

the processor outputting a candidate plan;

the processor receiving a first business rule in response to outputting the candidate plan; and

the processor causing the second plan to be adopted subject to the first business rule.

27 . A computer-implemented method of procurement strategy optimization for a buyer against expressive contracts on goods or services comprising:

(a) storing in a computer storage accessible to a processor of a computer data about a plurality of contracts, wherein the data about each contract specifies at least the following: one good or service associated with the contract, a payment rule to determine a payment for the purchase of at least one quantity of at least one good or service under the contract, and a seller under the contract; and wherein the data about a first one of the contracts also specifies a trigger condition and an associated effect, wherein the effect causes at least one of the following: a payment to occur, a future payment to change, a future payment to change contingent on a purchase transaction, or a constraint on allowable purchases to change;

(b) storing in the computer storage data regarding a first plurality of purchase transactions completed in the past by following a first procurement plan against the plurality of contracts;

(c) storing in the computer storage information regarding elements of at least one purchase transaction of the first plurality of purchase transactions;

(d) the processor determining a second plurality of purchase transactions subject to the following: a change to at least one but not all of the elements in step (c), a total cost to the buyer, the good or service and payment rule in step (a), the trigger condition and the associated effect in step (a), and the plurality of first purchase transactions in step (b); and

(e) the processor storing in the computer storage a second procurement plan procurement plan against the plurality of contracts, wherein the second procurement plan is determined subject to the first procurement plan and the second plurality of purchase transactions.

28 . The method of claim 27 , wherein the at least one element in step (d) is the name of the seller.

29 . The method of claim 27 , wherein:

the at least one element in step (d) is a purchase order; and

the second plurality of purchase transactions in step (d) is determined further subject to:

the aggregate purchase of goods or services being the same as in the first plurality of purchase transactions, and

at least one restriction on the allowable time period between the purchase of a good or service in the first plurality of purchase transactions and the purchase of the same good or service in the second plurality of purchase transactions.

30 . The method of claim 27 , wherein:

the at least one element in step (d) is the time the purchase transaction was placed; and

the second plurality of purchase transactions in step (d) is determined further subject to at least one restriction on the allowable time period between a time at least one purchase transaction was placed in the first plurality of purchase transactions and a time a corresponding purchase transaction is placed in the second plurality of purchase transactions.

31 . The method of claim 27 , wherein:

the at least one element in step (d) is a first good or service; and

the second plurality of purchase transactions in step (d) is determined further subject to a substitution of a good or service in a purchase transaction of the second plurality of purchase transactions for the first good or service in a corresponding purchase transaction of the first plurality of purchase transactions.

32 . The method of claim 27 , further including storing in the computer storage at least one business rule that imposes a constraint on the second plurality of purchase transactions.