A Decision Support System for Market Mechanisms Choice in e-Procurement

Abstract

Since the rise of the Internet electronic markets have become an important component of e-procurement by bringing together demand and supply. E-markets are meeting venues for component suppliers and purchasers, who use exchange mechanisms to electronically support the procurement process. Exchange mechanisms can be conceived as market institutions providing sets of rules, which determine the functioning of the market and the permissible actions such as bidding deadlines, non-disclosure rules or bid-revocation constraints. In nowadays procurement landscape, mechanisms vary from electronic procurement catalogues, where requests and offers are publicly announced, to e-negotiations , where the participants bargain over the conditions of a trade using electronic message exchange and / or decision support platforms, to auctions, where one or two sides automate the process during which participants from the other side compete against each other (Kersten, Neumann, Vahidov, & Chen, 2006). The variety of procurement solutions already suggests  that there is no single best solution for all imaginable sourcing activities. Instead, some mechanisms like e.g. an auction might be advantageous in certain situations while others are not (and vice versa).
In this paper we present a knowledge-based system (KMS) aimed at supporting procurement staff in their decision making on which mechanism to choose best for a specific sourcing scenario.