1. Reverse Auctions
• A reverse auction (also called procurement auction,
e-auction, sourcing event, e-sourcing or eRA) is a tool
used in industrial business-to-business procurement.
• The role of the buyer and seller are reversed, with
the primary objective to drive purchase prices
downward.
– In an ordinary auction (or also known as forward auction),
buyers compete to obtain a good or service.
– In a reverse auction, sellers compete to obtain business.
2. Experiment with
e-auction Designs
• Supply managers explored new auction
designs
– Multi-lot e-auctions
– Changing the type of real-time information visible
to bidders (price feedback versus rank feedback)
– Using different pricing rules
– Enabling multi-attribute auctions that focus on
more than just price.
3. Benefits of e-Auctions
• Save time
• Standardize the sourcing process
• Help organizations standardize contract terms
and conditions
• Buyers can be assured the obtained price is
competitive