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Using announcement options in the bid construction phase for disaster relief procurement

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  • Ertem, Mustafa A.
  • Buyurgan, Nebil
  • Pohl, Edward A.

Abstract

This paper presents an analysis of the bid construction phase of procurement auctions in disaster relief and humanitarian logistics. Substitution and partial fulfillment options are presented in formulations to allow bidders with fewer inventories to offer substitute item types and partial bids in auctions. During the auction announcement phase, a coordinating platform for disaster locations (i.e., auctioneer) allows substitution and partial fulfillment options to the relief suppliers (i.e., bidders) when acceptable. Thus, suppliers with fewer inventories can offer substitute item types and participate in more auctions by partially bidding. A genetic algorithm, a simulated annealing algorithm and an integer program are used for the analysis of the bid construction phase with different announcement options. Heuristic solution techniques and an IP formulation help understand the dynamics of the bid construction problem. It is shown that the addition of substitution and partial fulfillment options is essential to diversify and increase the usable capacity of the supplier base. Additionally, the partial fulfillment option enables better usage of supplier inventories in an environment with scarce supplies.

Suggested Citation

  • Ertem, Mustafa A. & Buyurgan, Nebil & Pohl, Edward A., 2012. "Using announcement options in the bid construction phase for disaster relief procurement," Socio-Economic Planning Sciences, Elsevier, vol. 46(4), pages 306-314.
    • Handle: RePEc:eee:soceps:v:46:y:2012:i:4:p:306-314
    DOI: 10.1016/j.seps.2012.03.004
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    3. Ghavamifar, Ali & Torabi, S. Ali & Moshtari, Mohammad, 2022. "A hybrid relief procurement contract for humanitarian logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    4. Dang, Duc-Cuong & Currie, Christine S.M. & Onggo, Bhakti Stephan & Chaerani, Diah & Achmad, Audi Luqmanul Hakim, 2023. "Budget allocation of food procurement for natural disaster response," European Journal of Operational Research, Elsevier, vol. 311(2), pages 754-768.
    5. Aghajani, Mojtaba & Torabi, S. Ali & Heydari, Jafar, 2020. "A novel option contract integrated with supplier selection and inventory prepositioning for humanitarian relief supply chains," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    6. Christian Wankmüller & Gerald Reiner, 2021. "Identifying Challenges and Improvement Approaches for More Efficient Procurement Coordination in Relief Supply Chains," Sustainability, MDPI, vol. 13(4), pages 1-23, February.
    7. Moshtari, Mohammad & Altay, Nezih & Heikkilä, Jussi & Gonçalves, Paulo, 2021. "Procurement in humanitarian organizations: Body of knowledge and practitioner's challenges," International Journal of Production Economics, Elsevier, vol. 233(C).
    8. Lijo John & Anand Gurumurthy & Gunjan Soni & Vipul Jain, 2019. "Modelling the inter-relationship between factors affecting coordination in a humanitarian supply chain: a case of Chennai flood relief," Annals of Operations Research, Springer, vol. 283(1), pages 1227-1258, December.

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