The auctions have been held for several years to provide transactions. There are several types of auctions. In general, spare can be classified based on the competition between vendors and between the buyers and on the basis of increase or decrease costs. For example, the Dutch flower auctions - this is an example of an auction with a decrease in prices resulting from competition between buyers, while the traditional English-style auctions, which are often carried out on sales of equipment or furniture are the ones in where multiple buyers increase the price. This is a different model of auctions are now integrated with Internet technology, so buyers have new methods for the determination of price, quality and rebates.
The report on the management of supply held ISM / Forrester, reported that 25 % of respondents buy goods or services in online auctions. The researchers who prepared this review, found that in the choice of organizations that resort to online auctions, the ratio of large organizations with small amounts of 4 to 1.
In practice, an online auction can be conducted in many different ways, including as an auction with an open offer, with a private offering, reference prices and as a reverse auction.
At the auctions, with an open offer to the vendor can choose products for which can make an offer, to see competitive bids from other vendors and make any number of proposals to set the termination of the auction. At auctions with private property purchasing organization has a target price and quantity. Suppliers choose products for which ready to make proposals by the deadline. Then the buyer evaluates each vendor proposal and gives it the status of each product. The status can be: acceptable, when the supplier receives a contract subject to compliance with its general qualifications; closed, when the supplier can no longer make their proposals for discussion of production; final offer (best-and-final offer, BAFO), when a provider that receives electronic media status desired, may submit another proposal for the product; open - the supplier can send the following sentence. Enrollment may continue for several rounds as it takes to make decisions on all products. At the auction on the basis of reference prices the customer specifies an acceptable price, and the first supplier who is willing to offer this price, get the contract.
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