Development and evaluation of the many-to-many supplier negotiation strategy

Supply chain is a complex logistics network, consists of suppliers, manufacturers, warehouses, distribution centers, retailers and customers. In general, the number of firms in each supply chain tier is more than one. Thus, the supply-demand relationship of two adjacent tiers in supply chain is the many-to-many type. Most of supplier selection processes are based on bidding and negotiation mechanism. Due to the diversity of intellectual backgrounds of the negotiating parties, competitive nature, many variables involved in supply-demand relationship, complex interactions and inadequate negotiation knowledge of project participants, the supplier negotiation process is sophisticated. This paper intends to develop the many-to-many supplier negotiation process, design the interactive and competitive bidding strategies of both-side parties, and conduct experimental simulations to investigate how the negotiation efficiency influenced by the varying bidding strategies of a considered demander. The purpose of this paper is to explore the relationships between a demander's bidding strategies and negotiation efficiency under different order and competitive conditions. The explorative results will be the decision support for assisting a demander to determine the proper bidding strategy in many-to-many supplier negotiation process.

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