News Column

Patent Application Titled "Residual Risk Analysis System, Method and Computer Program Product Therefor" Published Online

August 12, 2014



By a News Reporter-Staff News Editor at Information Technology Newsweekly -- According to news reporting originating from Washington, D.C., by VerticalNews journalists, a patent application by the inventors Strauss, Oliver Thomas (Santa Barbara, CA); Hansen, Morgan Scott (Santa Barbara, CA), filed on September 19, 2013, was made available online on July 31, 2014.

The assignee for this patent application is ALG, Inc.

Reporters obtained the following quote from the background information supplied by the inventors: "The market value of an item (e.g., a vehicle, a real estate property, etc.) is known at the time that it is sold to a consumer. After this initial transaction, however, the item's resale value is generally unknown. For a durable good or product, the resale value may be affected by various factors such as time, the availability of same or similar products, the geographical location where the product physically resides, demand in for the product in the resale market and/or industry, the purchasing power of the target buyers, and so on.

"Although the value of an item is easily established at the time the item was first sold, the value of the item will change (e.g., devalue) over time. The farther away in time a forecast is relative to the baseline, the more uncertainty will exist. Thus, the forecasting error will grow as the width of the time interval increases. The initial value, as well as the factors affecting the value of the item over time, vary with different types of items. These difficulties are multiplied when attempting to accurately forecast the value of an entire portfolio of different items.

"The difficulty of assessing the value of a portfolio of items may impact a company's business decisions. For example, consider a company that has a lease and loan portfolio. Each item in the portfolio represents a vehicle. One of the challenges faced by the company is to be able to assess the financial risk (losses and gains) on such a lease and loan portfolio (e.g., for purposes of obtaining financing based on the lease and loan portfolio. Because of these difficulties, it would be desirable to provide improved means for determining the residual value of a portfolio of assets."

In addition to obtaining background information on this patent application, VerticalNews editors also obtained the inventors' summary information for this patent application: "This disclosure is directed to systems, methods and computer program products for forecasting future values of a portfolio of assets. One particular embodiment is directed to a system for forecasting a future value of a portfolio of items. The system includes a server computer that is coupled to a network and to a data storage device. The server computer is configured to generate a residual value curve for each of a set of item types. The residual value curves are then stored in the data storage device for use in calculating residual values of items. The server computer also receives and/or maintains information defining a set of items (assets) that are associated with a portfolio. A customer associated with the portfolio may then request or otherwise initiate an assessment of the residual value of the portfolio. When the assessment is initiated, the server computer first determines a residual value for each item in the portfolio, and then aggregates the individual residual values into a residual value for the portfolio. This includes, for each of the items in the portfolio, identifying a corresponding one of the item types, retrieving the residual value curve corresponding to the identified item type, and determining a future value of the item based on the retrieved residual value curve for the corresponding item type. When the future values have been determined for all of the items in the portfolio and these values have been aggregated for the portfolio, the server computer can enable a client device to access the aggregated future values.

"The server computer may identify the item type corresponding to a particular item by identifying a type number (e.g., a vehicle identification number) associated with the item, and selecting the item type that is associated with the identified type number. If none of the types in the set defined for the system match the item, the system may instead select one of the types that is a near-match for the item, or it may use a composite of several types (e.g., types corresponding to competitive items) to approximate a match for the item. The set of item types defined for the system may be used to assess the future values of multiple, distinct portfolios of items. The system may be configured to enable a client device to provide inputs from the customer associated with the portfolio. These inputs can then be used to modify the residual value curves for the item types, or the computation of the residual values based on the residual value curves. The modifications based on customer inputs may be interactively adjusted through a work bench application executing on a client device. The system may alternatively utilize a type that is a partial match for the item.

"An alternative embodiment comprises a method for forecasting future values of an item. In this method, residual value curves are generated for each of a set of item types and then stored. When it is desired to assess the residual value of a portfolio, each of the items in the portfolio is examined. For each of the items in the portfolio, a corresponding one of the item types is identified, and a residual value curve corresponding to the identified item type is retrieved. The future value of the item is then determined based on the retrieved residual value curve. As the residual value of each item is determined, the values are aggregated, and the aggregated future values are stored. A client device can then be enabled to access the aggregated future values (e.g., by accessing the data storage device in which the values are stored, or by transmitting the values to a client device). Another alternative embodiment may comprise a computer program product that comprises a non-transitory computer-readable storage medium which stores computer instructions that are executable by a processor to perform this method.

"Numerous other embodiments are also possible.

"These, and other, aspects of the disclosure will be better appreciated and understood when considered in conjunction with the following description and the accompanying drawings. It should be understood, however, that the following description, while indicating various embodiments of the disclosure and numerous specific details thereof, is given by way of illustration and not of limitation. Many substitutions, modifications, additions and/or rearrangements may be made within the scope of the disclosure without departing from the spirit thereof, and the disclosure includes all such substitutions, modifications, additions and/or rearrangements.

BRIEF DESCRIPTION OF THE DRAWINGS

"The drawings accompanying and forming part of this specification are included to depict certain aspects of the disclosure. A more complete understanding of the disclosure and the advantages thereof may be acquired by referring to the following description, taken in conjunction with the accompanying drawings in which like reference numbers indicate like features.

"FIG. 1 depicts a diagram illustrating an exemplary network environment in which embodiments disclosed herein may be implemented.

"FIG. 2 depicts a diagram illustrating an exemplary system architecture in which embodiments disclosed herein can be implemented.

"FIG. 3 depicts a diagram illustrating an exemplary embodiment of a residual risk analysis modeling methodology.

"FIG. 4 depicts a diagram illustrating an exemplary residual value curve provided by a system implementing an embodiment of a residual risk analysis modeling methodology disclosed herein.

"FIG. 5 depicts a diagram illustrating an exemplary set of original and adjusted residual value curves in one embodiment.

"FIG. 6 depicts a diagram illustrating an exemplary self-correcting mechanism for fine-tuning a residual value curve over time utilizing a bounding function.

"FIG. 7 depicts a flow diagram illustrating an alternative method for forecasting the value of a portfolio of assets.

"FIG. 8 depicts a more detailed flow diagram illustrating the method of FIG. 7.

"FIG. 9 depicts a flow diagram illustrating the manner in which forecast information is used to determine the future values of specific items in a portfolio in one embodiment.

"While the invention is subject to various modifications and alternative forms, specific embodiments thereof are shown by way of example in the drawings and the accompanying detailed description. It should be understood, however, that the drawings and detailed description are not intended to limit the invention to the particular embodiment which is described. This disclosure is instead intended to cover all modifications, equivalents and alternatives falling within the scope of the present invention as defined by the appended claims. Further, the drawings may not be to scale, and may exaggerate one or more components in order to facilitate an understanding of the various features described herein."

For more information, see this patent application: Strauss, Oliver Thomas; Hansen, Morgan Scott. Residual Risk Analysis System, Method and Computer Program Product Therefor. Filed September 19, 2013 and posted July 31, 2014. Patent URL: http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=770&p=16&f=G&l=50&d=PG01&S1=20140724.PD.&OS=PD/20140724&RS=PD/20140724

Keywords for this news article include: ALG Inc., Information Technology, Information and Data Storage.

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Source: Information Technology Newsweekly


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