Research On Application Of Auction In E-procurement

E-procurement is an application in electronic commerce, and it has the potential to contribute significantly to the procurement process. One of the key strands of the company Procurement Policy is to improve the procurement process by streamlining and re-engineering procurement processes, and reducing the cost of doing business. Electronic procurement, including the use of reverse auctions, has the potential to contribute significantly to achieving these goals.The internet allows buyers and suppliers to come together in real time, and to use dynamic pricing models for procurement purposes. Examples of dynamic pricing models include:1. Auctions - where buyers bid for the right to purchase;2. Reverse auctions - where suppliers bid for the right to supply;3. Consolidated purchasing - where many buyers combine their requirements and negotiate on price with a supplier, the price decreases as the combined requirements increase;This dissertation specifically relates to real time reverse auctions on the internet. In a reverse auction, there is a single buyer and many suppliers. In this instance, the objective is to use market forces to drive suppliers to lower prices. The buyer indicates its requirement, and suppliers progressively bid lower prices to win the right of supply.While the specific process and rules of reverse auctions can vary, the process generally involves the Buyer posting its requirement (including product description, delivery and warranty specifications, and terms and conditions of supply) on the internet. The buyer also notifies suppliers of the starting price, date, time and duration of the reverse auction. To participate in the reverse auction, suppliers log onto the auction site on the internet. During the reverse auction, suppliers can see the current bid and make lower bids if they wish. At the close of the reverse auction, the bidder offering the lowest price usually wins the right of supply.The dissertation is divided into 6 parts: The first part proposes the problem, and expatiates the present condition of E-procurement and auction, then introduces the main content; the second part describes the research about E-procurement; the third part study the auctions; The fourth part discusses the research on application of reverse auction in E-procurement; The fifth part prove two examples that expound and prove above-mentioned research; The last part summarizes the dissertation and indicate the future work.