Mars Inc. Online Procurement Case Study Help
How can the requirement that first bid wins in the case of ties be met within the optimization framework?
Mars Incorporated had the strong culture of mutuality with its highly valued suppliers, which determines the design choices of the action;hencemaking it different from the number of private industrial sectors. There has been many reasons due to which the iterative auction formats was selected, which are provided below:
- It allows the suppliers to resubmit the bids that were not competitive or wrongly submitted.
- It reflected the iterative pattern of negotiation, referring to the process the supply pool being familiar with and accepted.
- It was simple as well as time efficient.The bids are submitted by suppliers on bundles they were concerned with.
Significantly, the company has gone for the Request for Quotations (RFQs) option on account of the decision of being independent of few suppliers. With the use of such option; the suppliers would be able to select the auction. A different bundles would be chosen by suppliers, thus forming a large number of bids. It must be made sure that the company’s requirement are met by the bidders prior to announcing the winning bidder.
In addition to this, the requirement that first bid wins in the case of ties should be met within the optimization framework as it traces the patterns round of auction, which comprise two principles. As per the bidding process being used; the first winner of bidding would be announced after the management determines by identifying through the respective quantities supplied by each bidder. For example; taking 2 bids in the case, assuming that the supplier 1 bids $120 for 3 items and supplier 2 bids $50 for 1 item. Therefore, the selection of the bidder would be based on the number of quantities the bidder supplied on the bid. This could be further improved with the usage of the numeric time stamps on those bids which are received, such as: provided in the exhibit 1 of the case study. This in turn, helps in bidding topurchase by accepting the required inventory at lower cost, when the greater number of suppliers compete for the request of the product.
Could a Mars-type combinatorial auction be operated without the use of optimization?
The Mars-type combinatorial auction could be operated without the use of the optimization on account of the promising application which allows the number of items to have independent values to be sold in simultaneous manner & thus allowing the bidders to bid on the several combination items. Mars-type combinatorial auction is considered the best system as it is used with core considerationover fulfilling the procurement goal, which at the same time strengthens the biding of each vendor. It is pertinent to note that there are various types of auctionthat are included in the combinatorial auction, comprising reverse auction as well as round by round auction. It is useful and widely used due to the reason that it provides benefits to the suppliers as well as the purchasers, and playsinevitable part in improving the economic efficiency.(Rothkopf, (Nov., 2003)).
There are number of challenges and issues which that have the possibilities to occur under such type of auction, which could either be hybrid or economic and computational. Referring to the case of Mars Incorporation;the company’s management is required to determine an efficient and feasible allocation of items that are going to be purchased. This could be done when all the suppliers submit their bids in either package form or in bundle. Such computational issue is referred to as winner determination problem. Additionally, time barrier is another problem which is associatedwiththe company’s management due to which the management is entitled to choose the bidder within a few minutes. Though, the process could said to be easy in the current 12 bids, which are received.After the commercialization process; the number of bids would fall somewhere between 500 and 5000 category, which is not easy for the management of the organization...................................
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