Development and evaluation of the interactive bidding strategies for a demander and its suppliers in supplier selection auction market

Abstract

Supplier selection strategy is a critical issue in a supply chain management (SCM) system. Selecting the correct suppliers can have a significant impact on the competitiveness of firms. This research is concerned with the development of the interactive bidding strategies for a demander and its multiple suppliers in a supplier selection auction market (SSAM). The objective of this paper is to investigate the negotiation efficiency for the various bidding strategies the demander employed in different order conditions. The negotiation efficiency is assumed as the required negotiation times to achieve an agreement, agreed price and the procurement costs. Further, this paper runs the experiments of SSAM and provides a bidding strategy guideline for a demander to achieve its goals of supplier selection in varying order conditions. To this end, the negotiation efficiency of this proposed bidding strategy model is compared with other research.

Keywords:

• Supply chain management
• Interactive bidding strategy
• Supplier selection auction market
• Negotiation efficiency