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

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

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    File URL: http://www.sciencedirect.com/science/article/pii/S0038012112000195
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    Article provided by Elsevier in its journal Socio-Economic Planning Sciences.

    Volume (Year): 46 (2012)
    Issue (Month): 4 ()
    Pages: 306-314

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    Handle: RePEc:eee:soceps:v:46:y:2012:i:4:p:306-314
    DOI: 10.1016/j.seps.2012.03.004
    Contact details of provider: Web page: http://www.elsevier.com/locate/seps

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    1. Hazra, Jishnu & Mahadevan, B., 2006. "Impact of supply base heterogeneity in electronic markets," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1580-1594, November.
    2. Song, Jiongjiong & Regan, Amelia, 2005. "Approximation algorithms for the bid construction problem in combinatorial auctions for the procurement of freight transportation contracts," Transportation Research Part B: Methodological, Elsevier, vol. 39(10), pages 914-933, December.
    3. Johansen, Soren Glud & Thorstenson, Anders, 1998. "An inventory model with Poisson demands and emergency orders," International Journal of Production Economics, Elsevier, vol. 56(1), pages 275-289, September.
    4. Yi, Pengfei & George, Santhosh K. & Paul, Jomon Aliyas & Lin, Li, 2010. "Hospital capacity planning for disaster emergency management," Socio-Economic Planning Sciences, Elsevier, vol. 44(3), pages 151-160, September.
    5. Altay, Nezih & Green III, Walter G., 2006. "OR/MS research in disaster operations management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 475-493, November.
    6. Clay Whybark, D., 2007. "Issues in managing disaster relief inventories," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 228-235, July.
    7. Bagchi, Aniruddha & Aliyas Paul, Jomon & Maloni, Michael, 2011. "Improving bid efficiency for humanitarian food aid procurement," International Journal of Production Economics, Elsevier, vol. 134(1), pages 238-245, November.
    8. Sheu, Jiuh-Biing, 2007. "An emergency logistics distribution approach for quick response to urgent relief demand in disasters," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(6), pages 687-709, November.
    9. Balcik, Burcu & Beamon, Benita M. & Krejci, Caroline C. & Muramatsu, Kyle M. & Ramirez, Magaly, 2010. "Coordination in humanitarian relief chains: Practices, challenges and opportunities," International Journal of Production Economics, Elsevier, vol. 126(1), pages 22-34, July.
    10. Oktay Günlük & Lászlo Ladányi & Sven de Vries, 2005. "A Branch-and-Price Algorithm and New Test Problems for Spectrum Auctions," Management Science, INFORMS, vol. 51(3), pages 391-406, March.
    11. Jotshi, Arun & Gong, Qiang & Batta, Rajan, 2009. "Dispatching and routing of emergency vehicles in disaster mitigation using data fusion," Socio-Economic Planning Sciences, Elsevier, vol. 43(1), pages 1-24, March.
    12. Zaki, Ahmed S. & Cheng, Hsing Kenneth & Parker, Barnett R., 1997. "A Simulation Model for the Analysis and Management of An Emergency Service System," Socio-Economic Planning Sciences, Elsevier, vol. 31(3), pages 173-189, September.
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