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Unformatted text preview: ing lower prices is a major objective of any buyer, of course, and a straightforward
way to drive prices down and obtain increased supplier attention is to leverage total
purchasing volume through Internet-based auctions. In a way, these are the e-procurement
equivalents of traditional requests-for-proposal and price bidding techniques that purchasing
departments have used for years: Bundle your volume together, and make it a winner-takeall proposition. Now, however, they can occur in real time with a worldwide supply base
bidding interactively and with visibility of other supplier bids, until a winner emerges.
As consumers, we are all familiar with auctions, in which the buyers continue to bid up the
price for a given item or service until only one buyer remains. Technically, e-procurement
uses “reverse auctions” or “downward auctions,” where the bidders are the suppliers and
prices continue to fall until only one bidder remains, who then has the right and obligation
to supply the requested goods or services at the low bid price.
The initial entrant in this field,...
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- Spring '08