This paper provides further insight into the structure of the procurement strategy for a firm that in order to fill the demand of its market builds inventory by participating in sequential auctions. The analysis herein extends previous work by endogenizing the probability of winning an auction using the rise function in order to obtain a concrete characterization of the optimal strategy. Further, an efficient computational algorithm is given and evaluated for specific valuation models for the market.
All Science Journal Classification (ASJC) codes
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics
- Bidding strategies
- Rise function