Discusses the savings that can result from online reverse auctions for the specific case of buyer‐designed machined parts. Distinguishes between gross and net savings, and highlights factors that can reduce the magnitude of anticipated savings. Determines that the savings actually achieved are less than that reported by suppliers of online auction services for the type of buyer‐designed production materials under consideration. Examines the root cause of why managers use online reverse auctions to reduce the price of purchased goods and services. Concludes that the root cause of online reverse auctions is local optimization of the business system along functional, managerial, or financial dimensions, which in turn perpetuates chronic underutilization of valuable internal and external resources.
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1 March 2002
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Realizing savings from online reverse auctions Available to Purchase
M.L. Emiliani;
M.L. Emiliani
M.L. Emiliani is based at the Lally School of Management and Technology, Rensselaer Polytechnic Institute, Hartford, Connecticut, USA.
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D.J. Stec
D.J. Stec
D.J. Stec is based at the Lally School of Management and Technology, Rensselaer Polytechnic Institute, Hartford, Connecticut, USA.
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Publisher: Emerald Publishing
Online ISSN: 1758-6852
Print ISSN: 1359-8546
© MCB UP Limited
2002
Supply Chain Management: An International Journal (2002) 7 (1): 12–23.
Citation
Emiliani M, Stec D (2002), "Realizing savings from online reverse auctions". Supply Chain Management: An International Journal, Vol. 7 No. 1 pp. 12–23, doi: https://doi.org/10.1108/13598540210414355
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