Chapter 11

Procurement Auctions

Damian R. Beil
Stephen M. Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109,

This tutorial introduces the basic ingredients of procurement auction research. After discussing the classic market-pricing logic of the open-descending auction, we demonstrate how simple modeling embellishments can extend the market-pricing auction logic to also capture key operational realities and trade-offs encountered in procurement practice. This tutorial should be of value to anyone interested in studying competitive bidding in supply chains.

Key word: competitive bidding; auctions; procurement; sourcing; supply chain

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Citation Information:

D. B. Beil. 2010. Procurement auctions. J. J. Hasenbein, ed. TutORials in Operations Research, Vol. 7. INFORMS, Hanover, MD, pp. 248–259.

DOI: 10.1287/educ.1100.0079
©2010 INFORMS : ISSBN 978-0-9843378-0-4