Coordination of purchasing and bidding activities across markets

Dajun Zeng, James C. Cox, Moshe Dror

Research output: Chapter in Book/Report/Conference proceedingConference contribution

4 Citations (Scopus)

Abstract

In both consumer purchasing and industrial procurement, combinatorial interdependencies among the items to be purchased are commonplace. E-commerce compounds the problem by providing more opportunities for switching suppliers at low costs, but also potentially eases the problem by enabling automated market decision-making systems, commonly referred to as trading agents, to make purchasing decisions in an integrated manner across markets. Most of the existing research related to trading agents assumes that there exists a combinatorial market mechanism in which buyers (or sellers) can bid (or sell) service or merchandise bundles. Today's prevailing e-commerce practice, however, does not support this assumption in general and thus limits the practical applicability of these approaches. We are investigating a new approach to deal with the combinatorial interdependency challenges for online markets. This approach relies on existing commercial online market institutions such as posted-price markets and various online auctions that sell single items. It uses trading agents to coordinate a buyer's purchasing and bidding activities across multiple online markets simultaneously to achieve the best overall procurement effectiveness. This paper presents two sets of models related to this approach. The first set of models formalizes optimal purchasing decisions across posted-price markets with fixed transaction costs. Flat shipping costs, a common e-tailing practice, are captured in these models. We observe that making optimal purchasing decisions in this context is NP-hard in the strong sense and suggest several efficient computational methods based on discrete location theory. The second set of models is concerned with the coordination of bidding activities across multiple online auctions. We study the underlying coordination problem for a collection of first- or second-price sealed-bid auctions and derive the optimal coordination and bidding policies.

Original languageEnglish (US)
Title of host publicationProceedings of the Hawaii International Conference on System Sciences
EditorsR.H. Sprague Jr.
Pages2585-2594
Number of pages10
Volume37
StatePublished - 2004
EventProceedings of the Hawaii International Conference on System Sciences - Big Island, HI., United States
Duration: Jan 5 2004Jan 8 2004

Other

OtherProceedings of the Hawaii International Conference on System Sciences
CountryUnited States
CityBig Island, HI.
Period1/5/041/8/04

Fingerprint

Purchasing
Costs
Electronic commerce
Tailings
Computational methods
Freight transportation
Decision making

ASJC Scopus subject areas

  • Software
  • Industrial and Manufacturing Engineering

Cite this

Zeng, D., Cox, J. C., & Dror, M. (2004). Coordination of purchasing and bidding activities across markets. In R. H. Sprague Jr. (Ed.), Proceedings of the Hawaii International Conference on System Sciences (Vol. 37, pp. 2585-2594). [INBTB08]

Coordination of purchasing and bidding activities across markets. / Zeng, Dajun; Cox, James C.; Dror, Moshe.

Proceedings of the Hawaii International Conference on System Sciences. ed. / R.H. Sprague Jr. Vol. 37 2004. p. 2585-2594 INBTB08.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Zeng, D, Cox, JC & Dror, M 2004, Coordination of purchasing and bidding activities across markets. in RH Sprague Jr. (ed.), Proceedings of the Hawaii International Conference on System Sciences. vol. 37, INBTB08, pp. 2585-2594, Proceedings of the Hawaii International Conference on System Sciences, Big Island, HI., United States, 1/5/04.
Zeng D, Cox JC, Dror M. Coordination of purchasing and bidding activities across markets. In Sprague Jr. RH, editor, Proceedings of the Hawaii International Conference on System Sciences. Vol. 37. 2004. p. 2585-2594. INBTB08
Zeng, Dajun ; Cox, James C. ; Dror, Moshe. / Coordination of purchasing and bidding activities across markets. Proceedings of the Hawaii International Conference on System Sciences. editor / R.H. Sprague Jr. Vol. 37 2004. pp. 2585-2594
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