Solving a sealed-bid reverse auction problem by multiple-criterion decision-making methods

This study presents a model for solving the sealed-bid, multiple-issue reverse auction problem, using multiple-criterion decision-making approaches, such that the interests of both the buyer and the supplier are satisfied. On the supplier side, the bid construction process is formulated as a fuzzy m...

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Bibliographic Details
Published in:Computers & mathematics with applications (1987) Vol. 56; no. 12; pp. 3261 - 3274
Main Author: Cheng, Chi-Bin
Format: Journal Article
Language:English
Published: Elsevier Ltd 01.12.2008
Subjects:
Algorithms
ATP
Available to promise inventory
Construction contracts
Decision making
Delivery scheduling
Electronic procurement
Fuzzy
Fuzzy multiple-objective programming
Mathematical models
Multiple-attribute decision making
Reverse auction
Suppliers
Technique for Order Preference by Similarity to Ideal Solution (TOPSIS)
Electronic procurement
Technique for Order Preference by Similarity to Ideal Solution (TOPSIS)
Multiple-attribute decision making
Fuzzy multiple-objective programming
Reverse auction
Available to promise inventory
ISSN:0898-1221, 1873-7668
Online Access:Get full text
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Summary:This study presents a model for solving the sealed-bid, multiple-issue reverse auction problem, using multiple-criterion decision-making approaches, such that the interests of both the buyer and the supplier are satisfied. On the supplier side, the bid construction process is formulated as a fuzzy multiple-objective programming problem, and is solved using an exhausted enumeration algorithm which adjusts the production plan in accordance with the buyer’s demand, based on the current master production schedule (MPS) and the available-to-promise (ATP) inventory. The use of the information of MPS and ATP enables the supplier to make accurate estimates of the production costs associated with specific delivery dates, and thus facilitates the construction of a bid which is both profitable and likely to secure the contract. On the buyer side, the winner determination process is treated as a multiple-attribute decision-making problem, and is solved using the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method. The validity of the proposed approach is demonstrated via an illustrative example.
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ISSN:0898-1221
1873-7668
DOI:10.1016/j.camwa.2008.09.011