Bidding Strategies In Multi-attributes Procurement Auction With Fixed-income Rate

With the development of the procurement theory and practice, the single-attribute auction can not meet the needs of a large-scale procurement auction. The procurement auction with the only goal of price expulse high quality goods suppliers and reduce the benefit of buyers and suppliers to some extent, but the multi-factor procurement auction is to overcome these problems. To the revenue of suppliers, most studies have focused on the expected proceeds. But in real procurement auction, getting a level of income rate must one of their primary conditions to participate in the auction. The income rate will be reflected in the auctions similar to the reservation price in sale auction. Therefore, we will analyze supplier's bidding strategy under the fixed-income rate, and the winning probability.This paper analysis the single-item and multi-item procurement auction's bidding strategy under the fixed-income rate. In the single-item procurement auction, this article reference to Che's classic literature, establish a scoring function mechanism to determine the quality. The quality of a bid is determined, and then the cost of suppliers is set. Because the model is built under fixed-income rate, so the supplier's bid price can be expressed out. This part also compares the price of fixed-income rate and the price of balanced strategy, and then we find out there are three types of suppliers in this model. As for the multi-factor of multi-item procurement auction, the qualities of goods are difficult to determine because there may be multiple sets of optimal quality to meet their standards in the combined bid. The scoring function referenced to Che's classic literature may have multiple solutions. We assume suppliers may change the alignment of their different products without changing the portfolio's overall rate of return in order to maximize the yield of self-interest. Thus we establish another quality-related equation, combination this equation and the scoring function we can get the quality bid, then the price.This paper also analyzes suppliers winning probability in this bidding strategy with fixed-income rate, and then gets the conclusion: Whether in single or multi-item procurement auction, supplier's winning probability always relates to supplier's fixed-income rate, supplier type and the number of participants, and showed a negative relation. Although having the same fixed-income rate of return, the suppliers with higher cost type also have low probability of winning; the suppliers who improve their returns will reduce the winning probability also; if number of participants increase, competition increase, and the supplier's winning probability reduce. We also simply simulate the functional relationship between winning probability and the type of suppliers, fixed-income rate, and the number of participants.