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On models for the operation of a class of electronic marketplaces

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  • Scott, Carlton H.
  • Scott, J.E.Judy E.

Abstract

Innovation in information technology and the use of the Internet have enabled electronic marketplaces to become an important mechanism for linking suppliers and customers in a cost-efficient fashion. Previous research has generally focused on the benefits of electronic marketplaces from transaction cost economics and strategic perspectives. Yet very little academic research has addressed how to actually operate such a marketplace. In this paper, after reviewing the status of electronic marketplaces research, we focus on an operational perspective. A model of an electronic marketplace linking customers and suppliers either directly or via an intermediary is given and solved under various scenarios. This model uses a single cost-minimizing objective and the extensions address issues such as (1) a physical presence for the electronic marketplace, which can provide value-added services and preserve anonymity; and (2) sole sourcing or dual sourcing. An additional model explicitly represents the diverse objectives of the multiple players in the market using goal programming. The contribution of this research to practitioners is to offer a cost-effective alternative to current forms of allocating supply and demand. The cost-minimizing and multiple criteria models and extensions in this study make a contribution to research by expanding the horizons of previous studies on the operation of electronic marketplaces.

Suggested Citation

  • Scott, Carlton H. & Scott, J.E.Judy E., 2004. "On models for the operation of a class of electronic marketplaces," Omega, Elsevier, vol. 32(5), pages 373-383, October.
    • Handle: RePEc:eee:jomega:v:32:y:2004:i:5:p:373-383
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    References listed on IDEAS

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    1. Pinar Keskinocak & Shidhar Tayur, 2001. "Quantitative Analysis for Internet-Enabled Supply Chains," Interfaces, INFORMS, vol. 31(2), pages 70-89, April.
    2. J. Yannis Bakos, 1997. "Reducing Buyer Search Costs: Implications for Electronic Marketplaces," Management Science, INFORMS, vol. 43(12), pages 1676-1692, December.
    3. Arthur M. Geoffrion & Ramayya Krishnan, 2001. "Prospects for Operations Research in the E-Business Era," Interfaces, INFORMS, vol. 31(2), pages 6-36, April.
    4. Romero, Carlos, 2001. "Extended lexicographic goal programming: a unifying approach," Omega, Elsevier, vol. 29(1), pages 63-71, February.
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    Cited by:

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