Mars Incorporated: Online Procurement

Mars Inc., one of the world's largest privately owned businesses, purchased over $4 billion of materials annually and was aware that many major firms were achieving savings of around five per cent through the use of online procurement auctions. The vice-president for Business Solutions at Mars wondered whether an online auction could be designed that would meet the special needs of the Mars company while enabling Mars to achieve the savings necessary to allow the company to prosper and grow in its highly competitive markets. Assignment Please prepare a brief write-up that addresses the questions below. The write-ups will be evaluated on their content and presentation, including logic, organization, grammar, and spelling. Please combine all files into a single document and submit it to the Blackboard Dropbox by the due date indicated below. Questions 1. What are the basic types of auctions? [1 point] 2. What features of the proposed Mars’ auction present implementation challenges? [1 point] 3. Using a linear programming framework and the data from case Exhibit 1, formulate and solve the problem of finding the cost-minimizing set of bids that meet Mars’ business requirements and determines the winning suppliers. (Ignore the requirement that first bid wins in the case of ties.) [5 points] 4. How can the requirement that first bid wins in the case of ties be met within the optimization framework? [1 point] 5. Could a Mars-type combinatorial auction be operated without the use of optimization? [1 point]