A multi-attribute e-auction mechanism for procurement: Theoretical foundations [An article from: European Journal of Operational Research]

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Description:
We describe a multi-attribute e-auction mechanism, with a focus on its theoretical foundations. Our mechanism is designed for auctioning multiple units of a good, primarily in B2B transactions. It can be used in various types of forward and reverse auctions/RFQs (Request for Quote), although the emphasis in this paper is on procurement. To incorporate the auction owner's preferences across issues/attributes in an auction/negotiation setting, we adopt a novel application of the 'pricing out' technique. Another key feature of our mechanism is the optimization-based 'suggested price' decision support component, which momentarily gives the best price acceptable to the buyer.