Value delivery in convergent supply network with mediating auctioneers

Abstract

Value delivery is the ultimate objective of every supply network. In this study, we propose a method of mitigating the effects of excessive competition in a convergent manufacturing supply network. Using an auction based protocol; market equilibrium is reached for a resource allocation problem within the network. In order to improve the quality of the solution obtained, a mediation method facilitated by network auctioneers is proposed. This method will allow an auctioneer to redistribute cost in its market in such a way as to improve throughput in that market which ultimately improves the throughput of the supply network.