7/28/2019 Appendix D Bidding Game

1/6

Supplier Execution Reservation Final price 100

Costs Uniform demand

1 0 42 Lower bound 0

2 10 33 Upper bound 100

3 20 25

4 30 195 50 10

6 65 5

7 80 2

8 100 0

Supplier # 1

input cells

Supplier Execution Reservation Position Status Quantity Profit

Bids

1 12 32.71428571 1 ACTIVE 14.32855001 26.57333788

2 14 31 2 ACTIVE 14.29795743 -0.04366998

3 21 25 3 ACTIVE 40.0059994 18.72779996

4 31 19 4 ACTIVE 62.81930851 11.08438144

5 64 6.73 5 ACTIVE 76.50293713 13.37496435

6 66 7 6 INACTIVE 76.50293713 0

7 72 4.85 7 ACTIVE 82.67919003 7.518260541

8 100 0 8 ACTIVE 100 0

UPDATE ORDERS

OPTIMIZE BID for

7/28/2019 Appendix D Bidding Game

2/6

x

x

x

x

x

x

-10 0 10 20 30

1

2

3

4

5

6

7

Profit

Supplie

r

7/28/2019 Appendix D Bidding Game

3/6

INSTRUCTIONS TO USE THE SPREADSHEET

This file simulates the interaction between suppliers that compete for the procurement of a manufacturer.

The given data is the following:

there are N=7 suppliers

the final selling price is p=100the costs of reserving capacity and producing are given by cells B3-C9

the customer demand follows a uniform distribution in [0;100], presente

The input from the suppliers are in the form of a pair of a reservation fee and an execution fee. For instanc

These inputs are coloured in red and are presented in cells B16-C22

Once the inputs are introduced, you must hit the button "UPDATE ORDERS" in order to obtain the decision

the position is the rank in which the manufacturer calls the suppliers wh

the status is the description of the competitive position of the suppliers,

the quantity is the cumulated amount of capacity bought from a particul

finally, the profit is the expected profit obtained by a supplier given all th

One can optimize the profit of a given supplier either by doing it by hand (inputting new bids and hitting "UP

7/28/2019 Appendix D Bidding Game

4/6

d in cells E2-F4

, if supplier 2 offers a reservation price v=5 and an execution price w=80, then the manufacturer will pay 5

of the manufacturer. This information is shown in the columns next to the bids, and consist of

en it requests (executes) supply; for example if the position is 3, then two other suppliers are called before t

inactive meaning that the supplier gets zero orders from the manufacturer, and active meaning some order

r supplier plus all the suppliers with smaller position, therefore the "real" capacity reserved is given by the

ese bids, they are plotted in the graph of the spreadsheet

DATE ORDERS"), or otherwise by hitting "OPTIMIZE BID" after filling the cell F11 with the correct number;

7/28/2019 Appendix D Bidding Game

5/6

or every unit of capacity it reserves and 80 for every unit of supply it requests.

his particular supplier

(can be very small though)

ifference of the quantity shown in the cell of a supplier minus the quantity shown in the cell of the supplier

this last function returns an approximation of the optimal bid that can be improved by hand

7/28/2019 Appendix D Bidding Game

6/6

ith previous position