Composing supply chains through multiunit combinatorial reverse auctions with transformability relationships among goods

Authors:
Andrea Giovannucci;Jesús Cerquides;Juan A. Rodríguez-Aguilar
Affiliations:
Artificial Intelligence Research Institute, Spanish National Research Council, Bellaterra, Spain and Laboratory for Synthetic, Perceptive, Emotive, and Cognitive Systems, Pompeu Fabra University, ...;University of Barcelona, Barcelona, Spain;Artificial Intelligence Research Institute, Spanish National Research Council, Bellaterra, Spain
Venue:
IEEE Transactions on Systems, Man, and Cybernetics, Part A: Systems and Humans
Year:
2010

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Abstract

In this paper, we introduce a novel auction-based decision support system to help a firm readily assemble supply chains. At this aim, we tackle the problem of deciding whether to outsource some production processes or not--the so-called make-or-buy decision problem. The solution to the make-or-buy decision problem is an optimal supply chain whose operations are either performed in-house or outsourced. We propose to employ a novel extension of combinatorial reverse auctions, the so-called Multiunit Combinatorial Reverse Auction with Transformability Relationships Among Goods, which allows the following: 1) a buyer/auctioneer to express transformability relationships among goods (some goods can be transformed into others at some transformation cost) and 2) bidders to express their preferences over bundles of goods.