E-procurement using goal programming

Abstract

e-Procurement is an Internet-based business process for obtaining materials and services and managing their inflow into the organization. In this paper we develop multiattribute e-Procurement systems with configurable bids and formulate the bid evaluation problem as a linear integer multiple criteria optimization problem. Configurable bids allow multiple values for each attribute and for each value the bidder can specify price as a piecewise linear function of quantity. The suppliers can express volume discount bargaining strategy and economies of scale, using the above price function. The buyer can include several business rules and purchasing policies as side constraints in the optimization problem to evaluate the winning bids. We propose the use of goal programming techniques to solve the bid evaluation problem.