Abstract
An increasing number of commercial companies are using online reverse auctions for their sourcing activities. In reverse auctions, multiple suppliers bid for a contract from a buyer for selling goods and/or services. Usually, the buyer has to procure multiple items, which are typically divided into lots for auctioning purposes. By steering the composition of the lots, a buyer can increase the attractiveness of its lots for the suppliers, which can then make more competitive offers, leading to larger savings for the procuring party. In this paper, a clustering-based heuristic lotting method is proposed for reverse auctions. Agglomerative clustering is used for determining the items that will be put in the same lot. A suitable metric is defined, which allows the procurer to incorporate various approaches to lotting. The proposed lotting method has been tested for the procurement activities of a consumer packaged goods company. The results indicate that the proposed strategy leads to 2–3% savings, while the procurement experts confirm that the lots determined by the proposed method are acceptable given the procurement goals.
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© 2003 Springer-Verlag Berlin Heidelberg
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Kaymak, U., Verkade, J.P., te Braake, H.A.B. (2003). A Heuristic Lotting Method for Electronic Reverse Auctions. In: Yazıcı, A., Şener, C. (eds) Computer and Information Sciences - ISCIS 2003. ISCIS 2003. Lecture Notes in Computer Science, vol 2869. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-39737-3_41
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DOI: https://doi.org/10.1007/978-3-540-39737-3_41
Publisher Name: Springer, Berlin, Heidelberg
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