Cost and Cost Parameter Estimation in Whole-Set Equipment Multi-Attribute Procurement Auction

In whole-set equipment multi-attribute procurement, the buyer not only cares about the exchange price, but also pays more attention to the influence of lead-time and equipment quality on his value. According to the practice of equipment procurement, this paper formulates the suppliers´ cost function with parameters which are unknown to the buyer, and the buyer´s value resulted from the procurement is expressed by value function. Both the cost and value relate to quality, leadtime and quantity attributes. In order to get the more concrete cost function, we study the cost parameters by multi-round bidding. In the end, We provide a numerical example to illustrate our method and get a reasonable solution.