Reverse auction with buyer–supplier negotiation using bi-level distributed programming

This study presents a framework for solving a sealed-bid, multi-issue, and multi-sourcing reverse auction problem in which negotiation takes place between the buyer and the suppliers during the bidding process. The problem is formulated as a bi-level distributed programming model in which the buyer...

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Bibliographic Details
Published in:European journal of operational research Vol. 211; no. 3; pp. 601 - 611
Main Author: Cheng, Chi-Bin
Format: Journal Article
Language:English
Published: Amsterdam Elsevier B.V 16.06.2011
Elsevier
Elsevier Sequoia S.A
Series:European Journal of Operational Research
Subjects:
Algorithms
Allocations
Applied sciences
Auctions
Auctions/bidding
Available to promise inventory
Bi-level distributed programming
bidding Available to promise inventory Bi-level distributed programming Negotiation Fuzzy mathematical programming
Bids
Decision making
Decision making models
Decision theory. Utility theory
Exact sciences and technology
Feasibility
Fuzzy mathematical programming
Inventory control, production control. Distribution
Mathematical models
Mathematical problems
Negotiation
Negotiations
Operational research
Operational research and scientific management
Operational research. Management science
Optimization
Optimization algorithms
Portfolio theory
Programming
Studies
Suppliers
Negotiation
Auctions/bidding
Bi-level distributed programming
Fuzzy mathematical programming
Available to promise inventory
Decision making
Iterative method
Bilevel programming
Fuzzy programming
Subcontracting
Modeling
Delivery lead time
Reverse auction
Optimization
Supplier customer relationship
Bargaining
Feasibility
Information exchange
Mathematical programming
ISSN:0377-2217, 1872-6860
Online Access:Get full text
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Description
Summary:This study presents a framework for solving a sealed-bid, multi-issue, and multi-sourcing reverse auction problem in which negotiation takes place between the buyer and the suppliers during the bidding process. The problem is formulated as a bi-level distributed programming model in which the buyer is the upper level decision maker, while suppliers at the lower level make decisions independent of each other. The negotiation process between the buyer and the suppliers is facilitated via the iterative exchange of decision information between the upper and lower levels of the model. The outcome of the sealed-bid auction is determined using an algorithm designed to establish the optimum quantity allocation and delivery time at the upper level and the corresponding optimized production plans at the lower level. The feasibility of the proposed approach is demonstrated via an illustrative example.
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ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2011.01.017