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Supplier selection is a complex and strategic activity needed in every organization, involving many stakeholders and different attributes as price, delivery performance, and product quality. Globalization, in the last decades, increased the competitiveness between vendors, enhancing the use of decision models to support the best choice based on optimizations and bidding variations due to specific needs. This chapter presents three models of multi-dimensional auctions to improve an international humanitarian NGO process procurement efficiency by reducing procurement costs and the decision-making process time. These models have the advantage to be easily implementable in typically complex environments where there is a large number of categories, suppliers, and other features.

The first proposed model uses combinatorial auctions and is suited for procurement, where suppliers can benefit from cost complementarity. The second one uses volume discount auctions and is suited for volumetric purchases, where discounts for large quantities are common. The third one is a multi-attribute model, which computes the best possible solution considering several criteria and can be used in case of complex purchases that involve various categories and trade-offs and are subject to spot prices.

Several design considerations for this type of auctions are reviewed, as well as the mathematical formulation to determine the best alternative (i.e., winner) that can be solved using simple tools like Microsoft Excel. The models are optimized by a mixed-integer programming, and the multi-attribute one is developed using multi-criteria decision analysis (MCDA). All three models developed in this research showed superior results compared to the baseline, being between 9% and 20% more efficient than a regular supplier selection (singly choosing the lowest price) and improving the bidding compliance.

Objective – This chapter examines the performance of the market to discover efficient equilibrium under alternative auction designs.

Background – Auctions are increasingly being used to allocate emissions allowances (“permits”) for cap and trade and common-pool resource management programs. These auctions create thick markets that can provide important information about changes in current market conditions.

Methodology – This chapter uses experimental methods to examine the extent to which the predicted increase in the Walrasian price due to a shift in willingness to pay (perhaps due to a shift in costs of pollution abatement) is reflected in observed sales prices under alternative auction formats.

Results – Price tracking is comparably good for uniform-price sealed-bid auctions and for multi-round clock auctions, with or without end-of-round information about excess demand. More price inertia is observed for “pay as bid” (discriminatory) auctions, especially for a continuous discriminatory format in which bids could be changed at will, in part because “sniping” in the final moments blocked the full effect of the demand shock.

Conclusion – Uniform-price auctions (clock and sealed-bid uniform-price, and continuous uniform-price) generate changes in purchase prices that are reasonably close to predicted changes. There is some evidence of tacit collusion causing prices to be too low relative to predictions in most cases. The worst price tracking was observed for discriminatory auctions.

Application – Uniform-price auctions appear to perform at least as well as other auction designs with respect to discovery of efficient market prices when there are unexpected and unannounced changes in willingness to pay for permits.

Drawing from seminal research on organizational buying behavior (Johnston, 1979; Johnston & Bonoma, 1981), we use a case study format to explore the impact of the Internet and internationalization on today's industrial procurement processes. Interviews with senior managers of an industrial distributor reveal several key insights regarding the impact of the Internet on buyer–supplier interactions and the importance of global sourcing. Based on these exploratory findings, implications for future research are offered.