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Mechanism design for multiple item procurement using a distributed ellipsoid algorithm

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  • MILLER, Andrew J.
  • MISHRA, Debasis
  • VEERAMANI, Dharmaraj

Abstract

We study a problem in a procurement setting in which an Original Equipment Manufacturer (OEM) wants to procure a set of items from a set of suppliers. Each supplier incurs a cost for supplying any subset/bundle of items, and each supplier's cost information is known only to him. The goal is to determine (i) an efficient allocation of suppliers to items and (ii) appropriate payments for suppliers. We formulate the problem of determining which supplier should supply what items as an integer program. We develop a method, which is based on the ellipsoid method, that solves the dual of the linear relaxation of the problem in polynomial time. We also show that the linear relaxation has an integral optimal solution.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2005087.

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Date of creation: 00 Dec 2005
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Handle: RePEc:cor:louvco:2005087

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  1. Sven de Vries & James Schummer, 2005. "On Ascending Vickrey Auctions for Heterogeneous Objects," 2005 Meeting Papers 389, Society for Economic Dynamics.
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