On optimal bidding and inventory control in sequential procurement auctions: the multi period case

Kartikeya Puranam () and Michael Katehakis ()

Annals of Operations Research, 2014, vol. 217, issue 1, 447-462

Abstract: We consider the problem of a firm that in each cycle of a planning horizon builds inventory of identical items that it acquires by participating in auctions in order to satisfy its own market demand. The firm’s objective is to have a procurement strategy that maximizes the expected present value of the profit for an infinite planning horizon of identical cycles. We formulate this problem as a Markov decision process. We establish monotonicity properties of the value function and of the optimal bidding rule. Copyright Springer Science+Business Media New York 2014

Keywords: Auctions; Dynamic bidding; Procurement; Multi-period (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s10479-014-1542-5

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