Modeling and analysis for single item multi-attribute Reverse Auction

Effective procurement is one of the key challenges faced in the Supply Chain Management process. With the increase in awareness among customers, manufacturers emphasize more on quality of the product. In order to produce a quality product at an economical rate, the other attributes of a product often play more important role in deciding the procurement of raw materials than the price alone. Multi-attribute Reverse Auction mechanism is proved to be very effective in addressing this challenge efficiently. But the inherit problem of an optimal supplier selection within a cobweb of constraints is often very difficult to address. Any solution proposed to address this issue needs to be technologically feasible to provide a faster, efficient and effective result. One such solution which promises higher market efficiency through an effective information exchange of buyer´s preferences and supplier´s offerings is Analytic Hierarchy Process (AHP). This paper presents a framework for purchasing a single item online from multiple suppliers using AHP method. A case study is presented along with numerical analysis, which illustrates the AHP method of supplier selection.