A Lotting Method for Electronic Reverse Auctions

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 thesuppliers, 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.e-commerce;reverse auctions;hierarchical clustering;lotting;e-procurement

A Lotting Method for Electronic Reverse Auctions

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 thesuppliers, 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

A note on a multi-period profit maximizing model for retail supply chain management

In this note we present an efficient exact algorithm to solve the joint pricing and inventoryproblem for which Bhattacharjee and Ramesh (2000) proposed two heuristics. Our algorithmappears to be superior also in terms of computation time. Furthermore, we point out several mistakes in the paper by Bhattacharjee and Ramesh.pricing;inventory;dynamic programming

The Development of an Internet Reverse Auction; an Alternative to e-Procurement

E-commerce is expected to growth tremendously as the economic shifted into global market. This has encouraged Small and Medium sized Enterprise (SME) to use the changes in the way they procured goods and services and should not miss the emergence of technology. The aim o f this research is to understand and analyze the principles of online reverse auction, to design online reverse auction website and to develop a prototype called W eb b ased Intermediary R everse A uction (WIRA). T he m ethodology that been adopted in order to develop this project are the planning phase, analysis phase, design and development phase, testing and debugging phase and implementation phase. The prototype of the online reverse auction is developed based on the research and analysis conducted by using several important tools. Tools that being used in this project are, Macromedia Dreamweaver, Adobe Photoshop, Macromedia Flash MX, Microsoft Access, ASP and IIS. By having this website, SMEs should realized that they can gained much profits as the product's price is much cheaper then they can get in e-procurement

A note on a multi-period profit maximizing model for retail supply chain management

In this note we present an efficient exact algorithm to solve the joint pricing and inventory problem for which Bhattacharjee and Ramesh (2000) proposed two heuristics. Our algorithm appears to be superior also in terms of computation time. Furthermore, we point out several mistakes in the paper by Bhattacharjee and Ramesh

A Polynomial Time Algorithm for a Deterministic Joint Pricing and Inventory Model

In this paper we consider the uncapacitated economic lot-size model, where demand is adeterministic function of price. In the model a single price need to be set for all periods. Theobjective is to find an optimal price and ordering decisions simultaneously. In 1973 Kunreuther and Schrage proposed an heuristic algorithm to solve this problem. The contribution of our paper is twofold. First, we derive an exact algorithm to determine the optimal price and lot-sizing decisions. Moreover, we show that our algorithm boils down to solving a number of lot-sizing problems that is quadratic in the number of periods, i.e., the problem can be solved in polynomial time.pricing;inventory;production;lot-sizing

The Development of an Internet Reverse Auction; an Alternative to e-Procurement

E-commerce is expected to growth tremendously as the economic shifted into global market. This has encouraged Small and Medium sized Enterprise (SME) to use the changes in the way they procured goods and services and should not miss the emergence of technology. The aim o f this research is to understand and analyze the principles of online reverse auction, to design online reverse auction website and to develop a prototype called W eb b ased Intermediary R everse A uction (WIRA). T he m ethodology that been adopted in order to develop this project are the planning phase, analysis phase, design and development phase, testing and debugging phase and implementation phase. The prototype of the online reverse auction is developed based on the research and analysis conducted by using several important tools. Tools that being used in this project are, Macromedia Dreamweaver, Adobe Photoshop, Macromedia Flash MX, Microsoft Access, ASP and IIS. By having this website, SMEs should realized that they can gained much profits as the product's price is much cheaper then they can get in e-procurement

Combining Column Generation and Lagrangian Relaxation

Although the possibility to combine column generation and Lagrangian relaxation has been known for quite some time, it has only recently been exploited in algorithms. In this paper, we discuss ways of combining these techniques. We focus on solving the LP relaxation of the Dantzig-Wolfe master problem. In a first approach we apply Lagrangian relaxation directly to this extended formulation, i.e. no simplex method is used. In a second one, we use Lagrangian relaxation to generate new columns, that is Lagrangian relaxation is applied to the compact for-mulation. We will illustrate the ideas behind these algorithms with an application in Lot-sizing. To show the wide applicability of these techniques, we also discuss applications in integrated vehicle and crew scheduling, plant location and cutting stock problems.column generation;Lagrangean relaxation;cutting stock problem;lotsizing;vehicle and crew scheduling

Airline Revenue Management with Shifting Capacity

Airline revenue management is the practice of controlling the booking requests such that the planes are filled with the most profitable passengers. In revenue management the capacities of the business and economy class sections of the plane are traditionally considered to be fixed and distinct capacities. In this paper, we give up this notion and instead consider the use of convertible seats. A row of these seats can be converted from business class seats to economy class seats and vice versa. This offers an airline company the possibility to adjust the capacity configuration of the plane to the demand pattern at hand. We show how to incorporate the shifting capacity opportunity into a dynamic, network-based revenue management model. We also extend the model to include cancellations and overbooking. With a small test case we show that incorporating the shifting capacity opportunity into the revenue management decision indeed provides a means to improve revenues.convertible seats;dynamic capacity management;revenue management;seat inventory control;shifting capacity

A Polynomial Time Algorithm for a Deterministic Joint Pricing and Inventory Model

In this paper we consider the uncapacitated economic lot-size model, where demand is a deterministic function of price. In the model a single price need to be set for all periods. The objective is to find an optimal price and ordering decisions simultaneously. In 1973 Kunreuther and Schrage proposed an heuristic algorithm to solve this problem. The contribution of our paper is twofold. First, we derive an exact algorithm to determine the optimal price and lot-sizing decisions. Moreover, we show that our algorithm boils down to solving a number of lot-sizing problems that is quadratic in the number of periods, i.e., the problem can be solved in polynomial time