Competitive Sourcing for Internet Commerce

In electronic commerce on the Internet, a customer can choose among several competitive suppliers, but because of the nature of the Internet, the reliability and trustworthiness of suppliers may vary signi cantly. The customer's goal is to maximize its utility, by minimizing the expense required to ful ll its request, and maximizing its probability of success by some deadline. To this end, the customer creates a request strategy, describing which suppliers to contact under what conditions. In this paper we describe models for representing request strategies complete with supplier reliabilities, delivery timeliness pro les, and customer deadlines. We also develop decision procedures for selecting request strategies that maximize expected utility under certain scenarios, and more e cient heuristics that approximate the optimal solution.