Data processing: financial – business practice – management – or co – For cost/price
Reexamination Certificate
1999-07-22
2001-07-24
Cosimano, Edward R. (Department: 2161)
Data processing: financial, business practice, management, or co
For cost/price
C700S099000, C700S100000, C705S002000
Reexamination Certificate
active
06266655
ABSTRACT:
TECHNICAL FIELD OF THE INVENTION
This invention relates to computer-implemented enterprise management tools, and more particularly to a computer-implemented method of calculating resource values for an asset intensive manufacturer.
BACKGROUND OF THE INVENTION
One of the unique challenges of any manufacturing enterprise is valuation of its products and resources. In the case of product valuation, traditionally, prices are computed on the basis of a cost-plus measure and some measure of the ability of the customer to pay. Resources are conventionally valued in terms of prices paid for them, for example, the price paid for a machine used to make products.
In recent years, computer-implemented enterprise management tools have been developed to assist in management decisions. These tools often include pricing tools, intended to assist in the valuation process.
Notable among product pricing tools are those especially developed for airlines. These tools are not necessarily suitable for manufacturers. For example, material intensive manufacturers have limited materials (components) rather than capacity. In contrast, asset intensive manufacturers have limited resource capacity and demand may be serviced before desired. In both cases, probabilistic demand is not in a particular order for different prices, as is the case with airline travel.
SUMMARY OF THE INVENTION
One aspect of the invention is a method of valuing resources used to manufacture products. The method is especially useful for asset intensive manufacturers, who have limited capacity on their resources. The manufacturing process is modeled in terms of time periods, resources used during each time period, and products made by the resources. From this information, a usage value for each product per resource and an availability value for each resource can be determined. Additional input data parameters are the profit and allocation for each product. A probabilistic demand function is used to represent expected demand for each product. Given these values and the demand function, a value equation is formulated for each resource. Each value equation is expressed as a agrangian equation having a lagrange multiplier that represents the resource value. The equations are then solved for the lagrange multiplier to obtain a value for each resource.
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Baker & Botts L.L.P.
Cosimano Edward R.
i2 Technologies, Inc.
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