FAHP-BOCR Based Framework for Single Item Multi-attribute Procurement in B2B Electronic Reverse Auctions

This paper presents a framework of purchasing a single item online from multiple suppliers with a new sourcing tool called electronic reverse auctions (ERAs). Because of the ability to deal both positive and negative attributes, benefits, opportunities, costs, risks (BOCR) method is integrated with fuzzy analytic hierarchy process (FAHP) to evaluate the suppliers´ performance in the framework. After pre-qualified evaluation of suppliers, a nonlinear integer programming (NIP) is formulated to solve the winner determination problem considering procurement cost, administrative cost, and switching cost. In order to solve the NIP model, a heuristic algorithm is proposed to find feasible solutions. The FAHP-BOCR approach integrated with the mathematic programming is used to improve the efficiency of the final result. Finally, a numerical analysis is proposed to analyze the impact of the parameters.