Analysis of capacity and cost heterogeneity in a vendor base

Description

Internet based marketplaces have enabled industrial buyers to locate suppliers from geographically diverse locations. This has resulted in increased variations in certain supplier parameters such as capacity and cost among the participating suppliers. In this paper we consider two supplier parameters that can affect the price the buyer pays and the number of suppliers that the buyer will select for award of contract. These attributes are capacity and production cost. We show how the buyer will determine the optimum number of suppliers using a reverse auction mechanism when she does not have perfect knowledge of the suppliers' parameters.

Publication Date

1-1-2010

DOI

10.1109/IEEM.2010.5674454

ISBN

978-1424485031||978-1424485017||978-1424485024

Publisher

IEEE

Keywords

Capacity, Cost, Supplier Selection

Conference

2010 IEEE International Conference on Industrial Engineering and Engineering Management: 7-10 December, 2010, Macao, China

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