Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
2000-10-25
2004-06-15
Nguyen, Cuong (Department: 3625)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S035000
Reexamination Certificate
active
06751597
ABSTRACT:
BACKGROUND
1. Field of Invention
The present invention relates to a system and method for conducting trade activities and more particularly to a system and method for conducting trade activities electronically with the capability of achieving and optimizing complex trade objectives in the realm of electronic commerce.
2. Discussion of Prior Art
Current electronic commerce systems lack the decision support capabilities necessary for achieving the objectives of the various traders, especially in business-to-business electronic transactions. For example:
Procurement Organization. A business or government agency may seek to perform a multi-million dollar procurement of various office supplies from a possibly large number of authorized suppliers. An example of a procurement objective is to minimize the total expenditure on the required quantities of office supplies, under the limitations of the allocated budget, and the maximal price per specific items the agency is ready to pay. It is desirable that the underlying E-commerce system would recommend the optimal trade, i.e., what items and in what quantities should be purchased from each authorized supplier and for what price. Buying each item from a supplier offering the minimal price per item may not be the best strategy, because of various deals, incentives and volume discounts that suppliers may be willing to offer.
Supplier. A computer hardware supplier offers a range of components and their configurations. One possible objective is maximizing its revenue, while maintaining at least a 17% profit margin, subject to limitations on the current inventory levels and capacity, and under the requirement that inventory turnover be at least 50% per month. Also, a supplier may be willing to offer numerous special deals and incentives to preferred volume buyers.
Manufacturer. A pharmaceutical manufacturer may seek to perform a complex transaction of selling a bundle of its products to a chain of drug stores, and, at the same time, purchasing a range of raw materials necessary to manufacture them. In doing so, the manufacturer may be trying to achieve the objective of maximizing the overall profit subject to the limitations on manufacturing production capacity, available manufacturing processes and the available cash.
Collaborating Bidder. An authorized (e.g., on a GSA schedule) supplier (or manufacturer) is willing to put a bid in response to a big procurement solicitation by the federal government. The supplier may be too small to respond to large-scale solicitation, and he may seek to find a bidding alliance with other complementary suppliers. An example objective of the supplier may be to minimize the combined bid price (to increase the chances of winning), while guaranteeing his own 13% profit margin and under the restriction that his expenses shall not exceed $2 million.
Surplus Seller. An electronic device manufacturer may seek to eliminate useless surplus inventory. The objective here may be to maximize the sale price for the overall surplus, possibly selling it to more than one buyer.
For decision support, corporations with large volume of business transactions maintain extensive operations and R&D staff, as well as special-purpose, often proprietary, decision-support systems. However, the development of such special-purpose systems requires tremendous R&D effort in terms of time and capital outlay. Furthermore, those special purpose systems are typically not adaptable when it comes to dynamic evolutionary changes in business structure, constraints and objectives. Moreover, even in large corporations, many of the decision support activities, such as in the above examples, are not automated. Most importantly, special purpose systems are not capable of supporting transactions that span across widely distributed suppliers, manufacturers, and procurement organizations. On the other side of the spectrum, many small and medium size companies and organizations simply cannot afford the luxury of maintaining large sales and procurement staff and the special-purpose decision support tools. Those companies cannot keep up with ever-changing business opportunities, which often involve numerous business parties engaged in electronic commerce.
Companies such as Ariba, CommerceOne, Commerce Exchange, etc., do provide procurement and supply side integration, but the decision of exactly which items need to be purchased or sold, from or to which trader, and in what quantities and for what prices is left to sales and procurement personnel. Also lacking matchmaking optimization capabilities are Internet-based electronic commerce services, such as electronic malls and shops (e.g., IMALL and Amazon.com), electronic auctions (e.g., EBAY and Yahoo), and competitive shopping (e.g., PriceLine.com, using a reverse auction). Today, companies in that category mainly provide business-to-consumer and consumer-to-consumer services, but are also trying to expand into the business-to-business market. Products like IBM Net.Commerce and MS Site Server are suites of software productivity tools used to deploy a wide range of E-commerce solutions. However, they also lack the decision support capabilities necessary for achieving complex trade objectives.
Current Internet-based trade systems only support simple trade objectives such as purchasing or selling specific items within a certain price range. For example, EBAY allows the auctioning of specific items, i.e., iterative price-bids bounded by a floor price and a time deadline. IMALL supports selling specific products or services at a fixed price. PriceLine.com allows customers to bid their own price for a product or service, does comparative shopping and keeps the monetary difference.
Prior art examples of systems and methods used in connection with electronic commerce, trade optimization and logistics support are disclosed in various US Patents and related literature.
U.S. Pat. No. 4,903,201 discloses a computerized automated futures trading exchange. The traders in the exchange enter bids to purchase commodity contracts. They also enter offers to sell commodity contracts The system automatically matches between bids and offers. The system automatically completes transactions between traders.
The invention above lacks the capability to match an aggregation of partial bids to an aggregation of partial offers, where bids and offers are specified as ranges delimited by constraints. In the invention above the trader lacks the capability to define an objective function and to perform optimization on the specified objective function. The invention above is limited to the futures markets.
U.S. Pat. No. 5,077,665 discloses a matching system in which bids are automatically matched against offers for given trading instruments. Although the system provides match making between bids and offers of financial instruments, the system does not provide the trader the ability to specify objective function, to set constraints per specific financial instrument, and therefore to achieve a predefined business objective. The invention described therein is related only to financial markets and does not allow the user to specify other items for match making besides financial instruments.
U.S. Pat. No. 5,283,731 discloses computer-based classified advertising. The system comprises a data processor and means for creating an advertising database available to each user in the system. The invention described therein restricts the matching capabilities to a single match and does not provide capabilities to perform optimization and to specify complex trading specifications, constraints and objectives.
U.S. Pat. No. 5,710,887 discloses a computer system and method for electronic commerce. The system facilitates commercial transactions between a plurality of customers and at least one supplier of items over a computer driven network capable of providing communications between the supplier and at least one customer site associated with each customer. Despite the fact that the system disclosed in the invention is suitable for a wide range of providers o
Brodsky Alex
Gozhansky Alan
Karpishpan Sonya
Katz Marcel
Zelivinski Stanislav
B2E Sourcing Optimization, Inc.
Blank Rome LLP
Nguyen Cuong
LandOfFree
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