Industrial Procurement Auctions

As illustrated in the previous chapters, combinatorial auctions have successfully been applied to various application domains, such as the allocation of airspace system resources (Chapter 20), truckload transportation (Chapter 21) and bus routes (Chapter 22). Industrial procurement is potentially a huge application domain for combinatorial auctions, and it has turned into a topic of interest for software vendors and procurement managers in the B2B domain. A number of applications have been reported, but unfortunately, possibly because of efforts to protect proprietary information and competitive advantages, there is little documentation and public information on details of the design of combinatorial auctions in industrial procurement. The focus of this chapter is on describing current practice in this domain. We will also provide a case study of procurement auctions at Mars, Incorporated in order to illustrate the particularities in this field.