Market-based strategic procurement planning in convergent supply networks

Abstract

Convergent manufacturing supply networks facilitate the flow of complementary resources which make the application of competitive equilibrium algorithms difficult. In this work, we present a market-based decentralized approach which uses a market-oriented programming algorithm to obtain Pareto-optimal allocation of resources traded among agents which represent enterprise units in a supply network. It is assumed that every enterprise have unique preferences for suppliers in the markets in which they trade. Description of enterprise agents and the interaction protocol used to generate procurement plans for the enterprise units are presented.