Integrating Data Envelopment Analysis and Reverse Auction Using Bi-level Programming Approach

Document Type : Scientific Paper

Authors

1 Professor, Department of Industrial Engineering, University of Tehran, Tehran, Iran

2 Ph.D. in Industrial Engineering, Department of Industrial Engineering, Iran university of Science and Technology

Abstract

Over the past decade, supply chain management has turned to be a strategic goal for leading producing organizations. This is due to the rapid changes in the operating environment of the company, the high level of market globalization and the increasing growth of customer demand for more and higher quality of services. Among the activities in this area, management of procurement and sourcing could cause significant changes in many companies. In general, one of the most common methods of sourcing and procurement is reverse auction. In this paper, using bi level planning and Data Envelopment Analysis, a reverse auction process is designed to select suppliers. A Meta-Heuristic method based on the enumeration of all possible solutions is designed to solve the proposed model. Then a numerical study has been used for examining the accuracy of the model and the proposed solution.

Keywords


[1] نعیمی صدیق، ع. چهارسوقی، ک. شیخ محمدی، م. "طراحی مدل هماهنگی در زنجیره تأمین رقابتی با استفاده از رویکرد نظریه بازی با همکاری و بدون همکاری". مجله مدل سازی در مهندسی، دانشگاه سمنان، دوره 10، شماره 21، 1391.
[2] فضلی خلف، م. چهارسوقی، ک. پیشوایی، م. "طراحی پایای شبکه زنجیره تأمین حلقه بسته تحت عدم قطعیت: مطالعه موردی یک تولید‌کننده باتری‌‌ اسیدی". مجله مدل­سازی در مهندسی، دانشگاه سمنان، دوره 10. شماره 29، 1393.
[3]  Brunelli, M., "Online auctions save millions for Quaker Oats and SmithKline Beecham". Purchasing,. 128(4): p. S22, 2000.
[4]  Hohner, G., et al., "Combinatorial and quantity-discount procurement auctions benefit Mars, Incorporated and its suppliers". Interfaces,. 33(1): p. 23-35, 2003.
[5]  Metty, T., et al., "Reinventing the supplier negotiation process at Motorola". Interfaces,. 35(1): p. 7-23, 2005.
[6]  Sandholm, T., "Very-large-scale generalized combinatorial multi-attribute auctions: Lessons from conducting $60 billion of sourcing". 2013.
[7]  Breuer, T., et al., "Endogenous leverage and asset pricing in double auctions". Journal of Economic Dynamics and Control,. 53: p. 144-160, 2015.
[8]  Zhang, Z. and M. Jin., "Iterative multi-attribute multi-unit reverse auctions". The Engineering Economist,. 52(4): p. 333-354, 2007.
[9]  Che, Y.-K., "Design competition through multidimensional auctions". The RAND Journal of Economics, p. 668-680, 1993.
[10]    Chen-Ritzo, C.-H., et al., "Better, faster, cheaper: An experimental analysis of a multiattribute reverse auction mechanism with restricted information feedback". Management Science, 51(12): p. 1753-1762, 2005.
[11]    Parkes, D.C. and J. Kalagnanam., "Models for iterative multiattribute procurement auctions". Management Science, 51(3): p. 435-451, 2005.
[12]    Benoit, J.-P. and V. Krishna., "Multiple-object auctions with budget constrained bidders". The Review of Economic Studies, 68(1): p. 155-179, 2001.
[13]    Rothkopf, M.H., A. Pekeč, and R.M. Harstad., "Computationally manageable combinational auctions". Management science, 44(8): p. 1131-1147, 1998.
[14]    Bichler, M., J.R. Kalagnanam, and H.S. Lee., "RECO: Representation and evaluation of configurable offers". in Computational Modeling and Problem Solving in the Networked World, Springer. p. 235-258, 2003.
[15]    Mishra, D. and D. Veeramani., "A multi-attribute reverse auction for outsourcing". in Database and Expert Systems Applications, 2002. Proceedings. 13th International Workshop on. 2002. IEEE.
[16]    Ronen, A. and D. Lehmann., "Nearly optimal multi attribute auctions". in Proceedings of the 6th ACM conference on Electronic commerce. 2005. ACM.
[17]    Harris, M. and A. Raviv., "Allocation mechanisms and the design of auctions". Econometrica: Journal of the Econometric Society, p. 1477-1499, 1981.
[18]    Weber, R.J., "MULTIPLE—0BJECT AUCTIONS". 1981.
[19]    Yuan, Y., "A multi-attribute reverse auction decision making model based on linear programming". Systems Engineering Procedia, 4: p. 372-378, 2012.
[20]    Hsieh, F.-S. and C.C. Hua., "Decision Support for Combinatorial Reverse Auction with Multiple Buyers and Sellers". in Opportunities and Challenges for Next-Generation Applied Intelligence. 2009, Springer. p. 105-110.
[21]    Cheng, C.-B., "Reverse auction with buyer–supplier negotiation using bi-level distributed programming". European Journal of Operational Research, 211(3): p. 601-611, 2011.
[22]    Buer, T. and H. Kopfer., "A Pareto-metaheuristic for a bi-objective winner determination problem in a combinatorial reverse auction". Computers & Operations Research, 41: p. 208-220, 2014.
[23]    Tsai, K.-m. and F.-c. Chou., "Developing a fuzzy multi-attribute matching and negotiation mechanism for sealed-bid online reverse auctions". Journal of theoretical and applied electronic commerce research, 6(3): p. 85-96, 2011.
[24]    Pham, L., et al., "Multi-attribute online reverse auctions: Recent research trends". European Journal of Operational Research, 242(1): p. 1-9, 2015.
[25]    Mansouri, B. and E. Hassini., "A Lagrangian approach to the winner determination problem in iterative combinatorial reverse auctions". European Journal of Operational Research, 244(2): p. 565-575, 2015.
[26]    Jin, M. and A.J. Yu., "Procurement auctions and supply chain performance". International Journal of Production Economics, 162: p. 192-200, 2015.
[27]    Kuyzu, G., et al., "Bid price optimization for truckload carriers in simultaneous transportation procurement auctions". Transportation Research Part B: Methodological, 73: p. 34-58, 2015.
[28]    Charnes, A., W.W. Cooper, and E. Rhodes., "Measuring the efficiency of decision making units". European journal of operational research, 1978. 2(6): p. 429-444.
[29]    Haas, D., M.G. Kocher, and M. Sutter., "Measuring Efficiency of German Football Teams by Data Envelopment Analysis"*. Central European Journal of Operations Research, 12(3): p. 251, 2004.
[30]  ابراهیمی، س. جعفرزاده افشاری، ا. "ارایه یک مدل ریاضی جهت بهینه­سازی عملیات شبکه انتقال گاز"، مجله مدل سازی در مهندسی، دانشگاه سمنان، دوره 44، شماره 14، 1395.
 
[31]    Candler, W. and R. Townsley., "A linear two-level programming problem". Computers & Operations Research, 9(1): p. 59-76, 1982.
[32]    Bialas, W. and M. Karwan., "Multilevel linear programming". State University of New York at Buffalo, 1978.
[33]    Bard, J.F., "An efficient point algorithm for a linear two-stage optimization problem". Operations Research, 31(4): p. 670-684, 1983.
[34]    Bard, J.F., "An investigation of the linear three level programming problem". Systems, Man and Cybernetics, IEEE Transactions on, (5): p. 711-717, 1984.
[35]    Bialas, W., M. Karwan, and J. Shaw., "A parametric complementary pivot approach for two-level linear programming". State University of New York at Buffalo, 57,1980.
[36]    Chen, Y. and M. Florian., "On the geometric structure of linear bilevel programs: a dual approach". CENTRE DE RECHERCHE SUR LES TRANSPORTS PUBLICATION, (867), 1992.
[37]    Papavassilopoulos, G., "Algorithms for static Stackelberg games with linear costs and polyhedra constraints". in 1982 21st IEEE Conference on Decision and Control. 1982.
[38]    Gao, Z., J. Wu, and H. Sun., "Solution algorithm for the bi-level discrete network design problem". Transportation Research Part B: Methodological, 39(6): p. 479-495, 2005.
[39]    Tuy, H., A. Migdalas, and P. Värbrand., "A global optimization approach for the linear two-level program". Journal of Global Optimization, 3(1): p. 1-23, 1993.
[40]    Shi, C., et al., "An extended branch and bound algorithm for linear bilevel programming". Applied Mathematics and Computation, 180(2): p. 529-537, 2006.
[41]    Hansen, P., B. Jaumard, and G. Savard., "New branch-and-bound rules for linear bilevel programming". SIAM Journal on scientific and Statistical Computing, 13(5): p. 1194-1217, 1992.
[42]    Shi, C., J. Lu, and G. Zhang., "An extended Kuhn–Tucker approach for linear bilevel programming". Applied Mathematics and Computation, 162(1): p. 51-63, 2005.
[43]    Wen, U.-P. and Y. Yang., "Algorithms for solving the mixed integer two-level linear programming problem". Computers & Operations Research, 17(2): p. 133-142, 1990.
[44]    Faísca, N.P., et al., "Parametric global optimisation for bilevel programming". Journal of Global Optimization, 38(4): p. 609-623, 2007.
Gümüş, Z.H. and C.A. Floudas., "Global optimization of mixed-integer bilevel programming problems". Computational Management Science, 2(3): p. 181-212, 2005.
Volume 20, Issue 59
April 2018
Pages 69-83
  • Receive Date: 05 December 2017
  • Revise Date: 21 December 2017
  • Accept Date: 08 September 2018
  • Publish Date: 21 September 2018