The 2007 procurement challenge: A competition to evaluate mixed procurement strategies

The 2007 procurement challenge: A competition to evaluate mixed procurement strategies

Global competition is putting a premium on the ability to manage risk through flexible and agile Web-enabled procurement practices. This article discusses the design of the 2007 “Supply Chain Management Procurement Challenge” (SCM-PC), a competition designed by the first three authors to evaluate the performance of mixed procurement strategies that balance risk through combinations of long-term...

Competition for procurement shares

We propose a new procurement procedure which allocates shares of the total amount to be procured depending on the bids of suppliers. Among the properties of the mechanism are: (i) Bidders have an incentive to participate in the procurement procedure, as equilibrium payoffs are strictly positive. (ii) The mechanism allows to vary the extent to which affirmative action objectives, like promoting ...

Procurement Competition at Work: The Manufacturer's Experience

Procurement Strategies with Unreliable Suppliers

We propose and analyze a general periodic-review model in which the firm has access to a set of potential suppliers, each with specific yield and price characteristics. Assuming that unsatisfied demand is backlogged, the firm incurs three types of costs: (i) procurement costs, (ii) inventory-carrying costs for units carried over from one period to the next, and (iii) backlogging costs. A procur...

Competition for Procurement Contracts with Service Guarantees

We consider a market with two suppliers and a set of buyers in search of procurement contracts with one of the suppliers. In particular, each buyer needs to process a certain volume of work, and each supplier’s ability to process the customers’ requests is constrained by a production capacity. The procurement contracts include guarantees that the products will be available when needed, and the ...