U.S. patent application number 11/982367 was filed with the patent office on 2008-07-03 for method of transformational bidding with rebates and discounts.
This patent application is currently assigned to Ariba, Inc.. Invention is credited to William D. Rupp, Shane M. Tulloch, Timothy Valachovic.
Application Number | 20080162285 11/982367 |
Document ID | / |
Family ID | 23080338 |
Filed Date | 2008-07-03 |
United States Patent
Application |
20080162285 |
Kind Code |
A1 |
Tulloch; Shane M. ; et
al. |
July 3, 2008 |
Method of transformational bidding with rebates and discounts
Abstract
A method of transforming bidding with rebates and discounts in
an electronic auction using a system and machine readable medium,
the method including receiving a first bid from a first bidder and
a second bid from a second bidder, wherein at least one of a rebate
and discount is offered with at least one of the first and second
bids, assigning a first value and a first unit of measurement for
the first bid and a second value and second unit of measurement for
the second bid, and transforming the first and second values to
third and fourth values, respectively, having a standard unit of
measurement. The system has a database for receiving and storing
bid information, including rebates and discounts, from at least one
bidder and software for transforming bid information into values
having a standard unit of measure. The machine readable medium has
a first machine readable code that receives bid information from a
bidder, a second machine readable code that receives at least one
of a rebate and discount from the bidder, a third machine readable
code that generates a transformed bid using the bid information and
the at least one of the rebate and discount, and a fourth readable
code that transmits the transformed bid information to an auction
server to generate a relative comparison of bids on a common
competitive basis.
Inventors: |
Tulloch; Shane M.;
(Sunnyvale, CA) ; Valachovic; Timothy;
(Bridgeville, PA) ; Rupp; William D.; (Mt.
Lebanon, PA) |
Correspondence
Address: |
VAN PELT, YI & JAMES LLP
10050 N. FOOTHILL BLVD #200
CUPERTINO
CA
95014
US
|
Assignee: |
Ariba, Inc.
|
Family ID: |
23080338 |
Appl. No.: |
11/982367 |
Filed: |
October 31, 2007 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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11974356 |
Oct 11, 2007 |
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11982367 |
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09753328 |
Dec 29, 2000 |
7283979 |
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11974356 |
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09282157 |
Mar 31, 1999 |
7249085 |
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09753328 |
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Current U.S.
Class: |
705/14.34 ;
705/37 |
Current CPC
Class: |
G06Q 30/0601 20130101;
G06Q 30/08 20130101; G06Q 30/02 20130101; G06Q 30/0234 20130101;
G06Q 40/06 20130101; G06Q 30/0235 20130101; G06Q 40/04
20130101 |
Class at
Publication: |
705/14 ;
705/37 |
International
Class: |
G06Q 30/00 20060101
G06Q030/00 |
Claims
1-25. (canceled)
26. A method of transforming a bid in an electronic auction
comprising: receiving a first bid from a first bidder, wherein at
least one of a rebate and a discount is offered with the bid;
assigning a first value and a first unit of measurement for the
first bid, using in part the at least one rebate and discount; and
transforming the first value to a second value.
27. The method of claim 26 wherein the transforming comprises using
a linear function.
28. The method of claim 26 wherein the transforming comprises using
a nonlinear function.
29. The method of claim 26 wherein the transforming comprises using
a lookup table.
30. The method of claim 26 wherein the transforming comprises using
at least two of a linear function, a nonlinear function, and a
lookup table.
31. The method of claim 30 wherein the transforming comprises
nesting the at least two of a linear function, a nonlinear
function, and a lookup table. receiving a value for each of the
first set of transformation variables and the second set of
32. The method of claim 26 further comprising: receiving a second
bid from a second bidder; assigning a third value and a second unit
of measurement for the second bid; and transforming the third value
to a fourth value having a unit of measurement the same as the
second value.
33. The method of claim 26 wherein the transforming comprises
determining a unit of measurement according to a buyer comparative
bid parameter.
34. The method of claim 26 wherein when the first bidder requests a
change to the first bid, the first bid is amended.
35. The method of claim 26 wherein when the first bidder requests a
change to the first bid; the first bid is not modified and an
additional bid is created.
36. A system for transforming a bid in an electronic auction,
comprising: a processor configured to: receive a first bid from a
first bidder, wherein at least one of a rebate and a discount is
offered with the bid; assign a first value and a first unit of
measurement for the first bid, using in part the at least one
rebate and discount; and transform the first value to a second
value; and a memory coupled to the processor and configured to
provide the processor with instructions.
37. The system of claim 36 wherein the transforming comprises using
a linear function.
38. The system of claim 36 wherein the transforming comprises using
a nonlinear function.
39. The system of claim 36 the transforming comprises using a
lookup table.
40. The system of claim 36 wherein the transforming comprises using
at least two of a linear function, a nonlinear function, and a
lookup table.
41. The system of claim 40 wherein the transforming comprises
nesting the at least two of a linear function, a nonlinear
function, and a lookup table.
42. A computer program product for transforming a bid in an
electronic auction, the computer program product being embodied in
a computer readable medium and comprising computer instructions
for: receiving a first bid from a first bidder, wherein at least
one of a rebate and a discount is offered with the bid; assigning a
first value and a first unit of measurement for the first bid,
using in part the at least one rebate and discount; and
transforming the first value to a second value.
43. The computer program product of claim 42 wherein the
transforming comprises using at least two of a linear function, a
nonlinear function, and a lookup table.
44. The computer program product of claim 42 further comprising
computer instructions for: receiving a second bid from a second
bidder; assigning a third value and a second unit of measurement
for the second bid; and transforming the third value to a fourth
value having a unit of measurement the same as the second
value.
45. The computer program product of claim 42 wherein when the first
bidder requests a change to the first bid, the first bid is not
modified and an additional bid is created.
Description
REFERENCE TO RELATED APPLICATIONS
[0001] This application is a continuation-in-part of copending U.S.
patent application Ser. No. 09/282,157, entitled "Method and System
for Conducting Electronic Auctions with Multi-Parameter Price
Equalization Bidding," filed on Mar. 31, 1999 in the name of Sam E.
Kinney, Jr., Vincent F. Rago, Glen T. Meakem, Robert G. Stevens,
David J. Becker, Anthony F. Bernard, William D. Rupp, Daniel C.
Heckmann, Julia L. Rickert, Shane M. Tulloch, Jennifer L. Riddle,
Nikki A. Sikes, and John P. Levis, III, assigned to the assignee of
the present Application, FreeMarkets, Inc. The entirety of that
earlier filed, co-pending patent application is hereby expressly
incorporated herein by reference.
FIELD OF THE INVENTION
[0002] The invention relates generally to conducting online
electronic auctions, and in particular, to business-to-business
auctions with rebates and discounts.
BACKGROUND OF THE INVENTION
Procurement Models
[0003] It is believed that procurement of goods and services has
traditionally involved high transaction costs. The cost of finding
and qualifying potential bidders has been particularly high. The
advent of electronic commerce has introduced new methods of
procurement that lower some of the transaction costs associated
with procurement. Electronic procurement, and in particular
business-to-business electronic procurement, matches buyers and
suppliers and facilitates transactions that take place on networked
processors.
[0004] At least three models of electronic procurement have been
developed: catalog, buyer-bidding auctions, and seller-bidding
auctions. The "catalog" model was an early form of online
electronic procurement. Initially, electronic catalogs were
developed primarily by sellers, typically suppliers, to help
customers obtain information about products, and order supplies
electronically. Those first electronic catalogs were typically
single-source; i.e. they only allowed customers to obtain
information and products from that supplier.
[0005] Although the first electronic catalogs reduced the
information search cost associated with procurement, it is believed
that customers were disadvantageously "locked in" to one supplier
at each electronic catalog. Customers were thus unable to compare a
number of competing products in a single catalog. Therefore,
certain suppliers with single-source catalogs began including
competitors' products in their systems. The inclusion of competing
products in electronic catalogs reduced procurement information
search costs even further. By offering competing products,
electronic catalogs became "electronic markets."
[0006] Electronic commerce using the electronic catalog model
typically involves one buyer and one seller at a time. When many
buyers compete for the right to buy from one seller, a buyer-
bidding auction model, or forward auction, may be created. Catalog
and buyer-bidding auction models, however, may have limitations and
may not work well in every situation.
[0007] Supplier-bidding auctions for products and services defined
by a buyer have been developed. In a supplier-bidding auction, bid
prices may start high and move downward in reverse-auction format
as suppliers interact to establish a closing price. The auction
marketplace is one-sided, i.e., one buyer and many potential
suppliers. Typically, the products being purchased are components
or materials. "Components" typically mean fabricated tangible
pieces or parts that become part of assemblies of durable products.
Example components include gears, bearings, appliance shelves, or
door handles. "Materials" typically mean bulk quantities of raw
materials that are further transformed into product. Example
materials include corn syrup or sheet steel.
[0008] Industrial buyers may not purchase one component at a time.
Rather, they may purchase whole families of similar components.
These items may therefore be grouped into a single lot. Suppliers
in industrial auctions may provide unit price quotes for all line
items in a lot.
Auction Process
[0009] Traditional online auctions focus on price as the sole
variable upon which the online competition is based. It is believed
that price is the sole bidding parameter that is provided by the
bidders and hence is the sole parameter upon which a selection
process is made. Relative valuations between different bid prices
may be quick and intuitive.
[0010] In many types of business transactions, price may not be the
sole parameter upon which a decision is made. For example, in the
negotiations for a supply contract, a buyer may compare various
proposals not only on the basis of price but also on the basis of
the non-price characteristics of non-standard goods, the location
of the supplier, the reputation of the supplier, etc. In a typical
business-to-business situation, a plurality of parameters may be
considered in combination with the supplier's price proposal.
[0011] In these situations, purchasers may negotiate with each
supplier independently because multi-parameter bids may not be
readily compared. Actual comparisons by the purchaser may be based
on a combination of subjective and objective weighting functions.
Bidders may not have access to information on the buyer-defined
weighting functions. At most, bidders may be selectively informed
(at their disadvantage) of aspects of other competing bids. The
limited communication of information between bidders may limit the
potential of true competition between the bidders. The absence of
competition lowers the likelihood that the bidders may approach
their true walk-away bid. Further, the manual weighting process may
be time consuming and subject to inconsistency from one application
to the next.
SUMMARY OF THE INVENTION
[0012] The present invention provides a method of conducting an
auction using transformational bidding with rebates and discounts.
The method includes receiving a first bid from a first bidder and a
second bid from a second bidder, assigning a first value and a
first unit of measurement for the first bid and a second value and
second unit of measurement for the second bid, and transforming the
first and second values to third and fourth values, respectively,
having a standard unit of measurement. At least one of a rebate and
discount is offered with at least one of the first and second
bids,
[0013] A system for conducting an auction using transformational
bidding with rebates and discounts is also disclosed. The system
includes a database for receiving and storing bid information,
including rebates and discounts, from at least one bidder and
software for transforming bid information into values having a
standard unit of measure.
[0014] The present invention also provides a machine readable
medium that transforms bids with rebates and discounts. The machine
readable medium includes a first machine readable code that
receives bid information from a bidder, a second machine readable
code that receives at least one of a rebate and discount from the
bidder, a third machine readable code that generates a transformed
bid using the bid information and the at least one of the rebate
and discount, and a fourth readable code that transmits the
transformed bid information to an auction server to generate a
relative comparison of bids on a common competitive basis.
BRIEF DESCRIPTION OF THE DRAWINGS
[0015] The accompanying drawings, wherein like reference numerals
are employed to designate like parts or steps, are included to
provide a further understanding of the invention, are incorporated
in and constitute a part of this specification, and illustrate
embodiments of the invention that together with the description
serve to explain the principles of the invention.
[0016] In the drawings:
[0017] FIG. 1A is a flow diagram of a request for quotation in an
auction;
[0018] FIG. 1B is a flow diagram of a bidding process in an
auction;
[0019] FIG. 1C is a flow diagram of a contract award following an
auction;
[0020] FIG. 2 is a schematic illustration of communications links
between the coordinator, the buyer, and the suppliers in an
auction;
[0021] FIG. 3 is a schematic illustration of auction software and
computers hosting that software in an auction;
[0022] FIG. 4 is a schematic illustration of a bid transformation
function;
[0023] FIGS. 5A-C are bid history charts based upon buyer and
supplier viewpoints; and
[0024] FIG. 6 is a block flow diagram illustrating an embodiment of
a transformation process of the present invention.
DETAILED DESCRIPTION
[0025] Reference will now be made in detail to the preferred
embodiments of the present invention, examples of which are
illustrated in the accompanying drawings. It is to be understood
that the Figures and descriptions of the present invention included
herein illustrate and describe elements that are of particular
relevance to the present invention, while eliminating, for purposes
of clarity, other elements found in typical auction systems and
computer networks.
[0026] The present invention provides a method of conducting an
auction using transformational bidding with rebates and discounts.
The method includes receiving a first bid from a first bidder and a
second bid from a second bidder, wherein at least one of a rebate
and discount is offered with at least one of the first and second
bids, assigning a first value and a first unit of measurement for
the first bid and a second value and second unit of measurement for
the second bid, and transforming the first and second values to
third and fourth values, respectively, having a standard unit of
measurement. The method of the present invention can be applied to
both reverse and forward auctions. In addition, the method is
particularly applicable to online auctions where bidders submit
bids to an auction coordinator electronically during the auction
process.
[0027] The present invention is designed to create a market of
competition in business transactions that traditionally could not
take advantage of natural auction dynamics. Competition is fostered
through the transformation of multi-parameter bids into comparable
units of measure. This transformation process enables an
apples-to-apples comparison of disparate bids. The following
description of the features of the present invention is presented
in the context of downward-based online industrial auctions. As
would be appreciated by one of ordinary skill in the relevant art,
these inventive features could also be applied in the context of
upward-based online auctions as well.
[0028] The basic process for a purchaser sponsored supplier-bidding
or reverse auction, as conducted by the assignee of the present
invention, is described below with reference to FIG. 1. FIG. 1
illustrates the functional elements and entities involved in
setting up and conducting a typical supplier-bidding auction. FIG.
1A illustrates the creation of an auctioning event, FIG. 1B
illustrates the bidding during an auction, and FIG. 1C illustrates
results after completion of a successful auction.
[0029] In the supplier-bidding reverse auction model, the product
or service to be purchased is preferably defined by the sponsor 10
of the auction, as shown in FIG. 1A. Alternatively, the buyer may
set up all or some of their own bidding events and find their own
suppliers. In that case, the sponsor 10 would run the events
through the market operations center, which is a facility where
auctions are monitored and participants receive assistance. In FIG.
1A, when the sponsor 10 decides to use the auctioning system of the
present invention to procure products or services, the sponsor 10
may provide information to an auction coordinator 20. That
information may include information about incumbent suppliers and
historic prices paid for the products or services to be auctioned,
for example. Preferably, the sponsor 10 also works with the auction
coordinator 20 to define the products and services to be purchased
in the auction and, if desired, lot the products and services
appropriately so that needed products and services can be procured
using optimal auction dynamics. A specification may then be
prepared for each desired product or service, and a Request for
Quotation ("RFQ") generated for the auction.
[0030] Next, the auction coordinator 20 may identify potential
suppliers 30, preferably with input from the sponsor 10, and invite
the potential suppliers 30 to participate in the upcoming auction.
The suppliers 30 that are selected to participate in the auction
may become bidders 30 and may be given access to the RFQ, typically
through an RFQ in a tangible form, such as on paper or in an
electronic format.
[0031] As shown in FIG. 1B, during a typical auction, bids are made
for lots. Bidders 30 may submit actual unit prices for all line
items within a lot, however, the competition in an auction is
typically based on the aggregate value bid for all line items
within a lot. The aggregate value bid for a lot may, therefore,
depend on the level and mix of line item bids and the quantity of
goods or services that are offered for each line item. Thus,
bidders 30 submitting bids at the line item level may actually be
competing on the lot level. During the auction, the sponsor 10 may
typically monitor the bidding as it occurs. Bidders 30 may also be
given market feedback during the auction so that they may bid
competitively.
[0032] After the auction, the auction coordinator 20 may analyze
the auction results with the sponsor 10. The sponsor 10 may conduct
final qualification of the low bidding supplier or suppliers 30.
The sponsor 10 may furthermore retain the right not to award
business to a low bidding supplier 30 based on final qualification
or other business concerns. As shown in FIG. 1C, a supply contract
may be drawn up and executed based on the results of the
auction.
[0033] The auction may be conducted electronically between bidders
30 at their respective remote sites and the auction coordinator 20
at its site. Alternatively, instead of the auction coordinator 20
managing the auction at its site, the sponsor 10 may perform
auction coordinator tasks at its site. Information may be conveyed
between the coordinator 20 and the bidders 30 via any known
communications medium.
[0034] In one embodiment, the auction is conducted electronically
between potential suppliers at their respective remote sites and
the coordinator 20 at its site. As shown in FIGS. 2 and 3,
information may be conveyed between the coordinator 20 and the
suppliers 30 via a communications medium such as a network service
provider accessed by the participants through, for example, dial-up
telephone connections using modems, or direct network connections.
A computer software application may be used to manage the auction.
The software application has two components: a client component 16
and a server component 23. The client component 16 may operate on a
computer at the site of each of the potential suppliers 30.
Suppliers 30 make bids during the auction using the client
component. The bids may be sent via the network service provider to
the site of the coordinator, where it is received by the server
component 23 of the software application. The client component 16
may include software used to make a connection through telephone
lines or the Internet to the server component 23. Bids may be
submitted over this connection and updates may be sent to the
connected suppliers.
[0035] Bids may only be submitted using the client component 16 of
the application--this ensures that buyers do not circumvent the
bidding process, and that only invited suppliers participate in the
bidding. Bidders may see their bids and bids placed by other
suppliers for each lot on the client component 16. When a bidder
submits a bid, that bid is sent to the server component 23 and
evaluated to determine whether the bid is from an authorized
bidder, and whether the bid has exceeded a pre-determined maximum
acceptable price. Bids placed by a supplier may be broadcast to all
connected bidders, thereby enabling every participating bidder to
see quickly the change in market conditions and begin planning
their competitive responses.
[0036] As noted, multi-parameter bids cannot be readily compared.
Comparison of multi-parameter bids cannot be realized unless the
relative impact (or weighting) of each of the individual bidding
parameters is known. Intuition that is based on subjective
assessments (or valuations) of multiple bid parameters cannot
create an efficient market because subjective assessments are
inconsistently applied and applied after lengthy delays.
Multi-parameter bid transformation enables true auction competition
because it forces a greater degree of objectivity into the
valuation process and is accomplished in real-time, allowing an
auction dynamic to occur. Comparison of bids can therefore be
accomplished in accordance with one or more comparative bid
parameters.
[0037] A generic transformation mechanism is illustrated in FIG. 4.
As illustrated, bid transformation 500 represents a function (f)
that is operative on input variables (x) and (a.sub.1. . .
a.sub.n). Input variables (a.sub.1. . . a.sub.n) represent
non-comparative bid parameters, while input variable (x) represents
a supplier comparative bid parameter (e.g., price). The output of
bid transformation 500 is the buyer comparative bid parameter
(y).
[0038] In one embodiment, the bid transformation function (f) is a
linear or non-linear analytic function that is calculated in
real-time. In another embodiment, the bid transformation function
(f) is a linear or non-linear function that is implemented via
lookup tables. In yet another embodiment, the transformation
function is a combination of an analytic linear function, analytic
on-linear function, and table lookup function. The combination can
be nested more than one layer deep.
[0039] In the generic description of the transformation process in
FIG. 4, two types of comparative bid parameters exist. A buyer
comparative bid parameter (y) refers to a parameter, resulting from
the transformation process, upon which the buyer will compare
competing bids. A supplier comparative bid parameter (x), on the
other hand, refers to an input to the transformation function (f).
As will be described in greater detail below, the supplier
comparative bid parameter can be used by a supplier to compare
competing bids in the supplier's context. In some applications, the
supplier comparative bid parameter is not used because all parties
may be allowed to view the auction in the buyer's context.
[0040] As noted, non-comparative bid parameters are also used as
inputs to the transformation process. Unlike supplier comparative
bid parameters, non-comparative bid parameters (e.g., non-price
parameters) are not directly used to compare competing bids.
[0041] In this transformation framework, a supplier comparative bid
parameter value can be modified by the transformation process based
upon non-comparative bid parameter values to yield a buyer
comparative bid parameter value. This scenario is discussed below
in the context of the coal market.
[0042] Alternatively, the transformation process can use multiple
non-comparative bid parameters to create a buyer comparative bid
parameter. In this case, no supplier comparative bid parameters are
used to create supplier specific views. All parties view the
competition in the same context. An example of this scenario is net
present value (NPV) bidding, where parameters specifying multi-year
contracts are converted into a total NPV bid. The total NPV bid
represents a sum of a series of payments over multiple contract
years, which are discounted to a present value using a predefined
discount rate structure. NPV bidding is described in co-pending
U.S. application Ser. No. 09/282,156, entitled "Method and System
for Conducting Electronic Auctions with Net Present Value Bidding",
the disclosure of which is hereby expressly incorporated in the
present application ("the '156 Application").
[0043] Where a single buyer comparative bid parameter (e.g., price)
is output by the transformation process, competition between bids
is based on the relative magnitude of the values of the buyer
comparative bid parameter associated with each of the bidders. This
relative magnitude of the comparative bid parameters can be
illustrated on a one-dimensional plot. Where multiple buyer
comparative bid parameters are output by the transformation
process, competition between bids can be compared using a multiple
dimensional plot. In most cases, the use of a single buyer
comparative bid parameter is advantageous because it provides the
simplest means for all parties to unambiguously determine a
relative ranking of bids.
[0044] The concepts and features of the present invention are now
illustrated in the context of a particular application within the
coal market. Coal purchase decisions are based on a variety of
factors relating to the characteristics of the coal as well as the
characteristics of the buyer's needs and physical facilities.
Characteristics of the coal include factors such as thermal content
(BTU/lb), percentage sulfur, percentage ash, percentage
water/moisture, hardness, etc. Relevant characteristics of the
buyer include the time frame of required delivery, types of power
generation units, etc.
[0045] During negotiations with multiple coal suppliers, each of
the relevant factors are evaluated in combination to determine the
relative attractiveness of each of the received bids. The
evaluation process is often a combination of subjective judgment,
based on instinct and experience, and hard quantitative analysis.
As one can readily appreciate, this evaluation process, although
typical, is time consuming and adds great uncertainty for the
suppliers.
[0046] Time delays are inherent since each supplier is negotiated
with independently. Suppliers face great uncertainty in this
process because the internal subjective/quantitative metrics used
by the buyer in the evaluation process are inconsistently applied.
Negotiation tactics dictate that the subjective/quantitative
metrics used by the buyer are not provided to the suppliers. This
confidential information gives the buyer leverage in altering the
supplier's perception of the relative attractiveness of the
submitted bid. During the negotiation process, suppliers may be
selectively informed (at their disadvantage) of aspects of the
decision making process.
[0047] Limited communication of information to the suppliers limits
the potential of true competition between the suppliers. The
absence of competition lowers the likelihood that the suppliers
will approach their best offer.
[0048] The present invention creates true competition between
suppliers in an auction system that enables comparison of truly
disparate bids. While traditional auctions focus on price as the
sole variable of online competition, the present invention also
factors in non-price variables into the bid evaluation and award
process.
[0049] In the coal market example, the buyer may be ultimately
interested in the price per unit energy produced when the coal is
processed through their power generation unit. As noted, all coal
is not created equal. The characteristics of the particular coal
being offered by a supplier are unique to the supplier. Moreover,
different power generation units will produce different quantities
of energy from identical coal, due to engineering differences built
into the power generation units.
[0050] Bids for coal are typically submitted on a price per
physical measure of weight or volume (e.g., $/ton) basis. The raw
$/ton bids of the participating suppliers cannot be readily
compared to each other due to the underlying characteristics of the
coal. A mechanism is therefore required to transform each of the
bids into a context that enables an apples-to-apples comparison
such that the buyer can choose the most competitive bid. In the
coal market example, the transformation process is designed to
transform the $/ton bids for unique lots of coal into standardized
units of value to the buyer (e.g., price-per-unit-of-energy bids
such as /Million BTU). After all of the $/ton bids are transformed
into /Million BTU bids, the buyer can readily identify the market
leading bids.
[0051] It should be noted that the standardized units of value to
the buyer can include various forms, such as a cost per unit of
thermal content from the coal, a cost per unit of electrical energy
output from a generation facility burning the coal, the revenue
from selling electrical energy output of a generation facility
burning the coal, a measure of profit contribution from selling
electrical energy output of a generation facility burning the coal,
a measure of the net present value of a decision to accept the
coal, wherein the decision is modeled to take into account the
overall improvement in the buyer's economic condition, including
revenue generated, costs avoided, risks mitigated, or asset
valuation improved.
[0052] The latter example is a function that implements the notion
that accepting a certain coal bid might have a portfolio effect on
the buyer's overall situation, or might change the economics of a
certain project. For example, a buyer might be considering whether
to build a new power plant, and since coal is a high percentage of
the life cycle cost of the power plant, changes in the price of
coal offered to the buyer might change the overall value of the
plant.
[0053] The transformation function used in the coal market has been
modeled as a linear transformation. In this linear transformation,
a suppliers raw $/ton bid is modified using multiplicative and
additive adjustments (or factors) to yield a /Million BTU bid. Each
of the multiplicative and additive factors are based upon
characteristics (e.g., coal characteristics, delivery
specifications, etc.) of a submitted bid.
[0054] It should be noted that the characteristics of a supplier's
coal might have been identified prior to the start of the auction.
In this case, multiplicative and additive factors are determined
prior to the start of the auction and stored in memory by the
server component. During the auction process, the multiplicative
and additive factors are retrieved from memory and used to
transform the raw $/ton bid into a /Million BTU bid. In one
embodiment, a multiplicative and/or additive factor is stored by
the server component for each of the characteristics of the
supplier's coal. In an alternative embodiment, a single
multiplicative factor and a single additive factor, representative
of the cumulative effect of the characteristics of the coal in the
linear transformation, is stored.
[0055] In another scenario, the characteristics of a supplier's
coal are provided as part of a supplier's first submitted bid along
with the raw $/ton bid to the server component. In this case, the
characteristics of the supplier's coal (i.e., BTU/lb, % sulfur, %
ash, % water, etc.) would be fed by the server component into the
transformation function to determine, in real-time, the buyer
comparative bid parameter that is the result of the transformation
function. The server component may store the net result of the
transformation function factors in memory for retrieval in the
transformation of future bids by that supplier.
[0056] The transformation process in the coal market example can be
generically characterized by the transformation process illustrated
in FIG. 4. In the coal market example, the output of the
transformation process is the /Million BTU parameter. The /Million
BTU parameter represents the basis upon which a buyer will compare
the bids submitted by the participating suppliers. Accordingly, the
/Million BTU parameter represents a buyer comparative bid
parameter.
[0057] In the coal example, the transformation process takes as
inputs both comparative and non-comparative bid parameters. The
non-comparative bid parameters represent the characteristics of the
coal (i.e., BTU/lb, % sulfur, % ash, % water, delivery time, etc.)
and the characteristics of the buyer. The $/ton price parameter
represents a supplier comparative bid parameter. In combination,
the comparative and non-comparative bid parameters are operated
upon by the transformation function (f) to yield the buyer
comparative bid parameter value in /Million BTU.
[0058] At this point, it should be noted that the supplier
comparative bid parameter ($/ton) is significant because it enables
the supplier to view a relative comparison of bids in the
supplier's individual context. This feature of the present
invention will be described in greater detail below in the
discussion of the detransformation and feedback parts of the
auction process.
[0059] After each of the submitted bids have been transformed into
the buyer comparative bid parameter /Million BTU, an
"apples-to-apples" comparison can be performed. The
"apples-to-apples" comparison can be effected in any of a variety
of ways including the bid history chart of FIG. 5A. The bid history
chart of FIG. 5A illustrates a relative ranking of transformed
received bids in /Million BTU.
[0060] Having received a bid from a participating supplier, the
auction server must then broadcast market feedback to the other
participating suppliers. This broadcast function creates a
real-time online competition between suppliers who are able to view
the activities of their competitors and plan their corresponding
response strategy.
[0061] In the coal market, the specific factors used in the
transformation function are often confidential to the buyer.
Accordingly, the buyer desires to prevent the suppliers from
gaining insight into aspects of the transformation function that
quantifies the buyer's weighting of various parameters associated
with a supplier's bid. For this reason, the auction server does not
feedback the transformed bids to the participating suppliers.
Rather, the auction server broadcasts bids that have been
detransformed from the buyer comparative bid parameter (i.e.,
/Million BTU) into the context (i.e., $/ton) of the individual
suppliers.
[0062] The $/ton bid for a supplier is referred to as the supplier
comparative bid parameter. As illustrated in FIG. 4, the supplier
comparative bid parameter is one of the inputs into the
transformation function (f). The supplier comparative bid parameter
is significant because it enables the supplier to view the auction
competition in his own context. In other words, a supplier can view
all competing bids as if all suppliers were offering the same type
of coal for sale. In this manner, a supplier can view the
competitive auction landscape without receiving any information
concerning the transformation function that has been defined by the
buyer.
[0063] In the coal example, the transformation process is modeled
as a linear function, having at least one multiplicative factor
and/or at least one additive factor. This transformation can be
represented by the well known algebraic function y=mx+b, where m is
the multiplicative factor, b is the additive factor, x is the
supplier comparative bid parameter, and y is the buyer comparative
bid parameter.
[0064] Bids viewed in the buyer's context have been converted into
the buyer comparative bid parameter (i.e., /Million BTU). On the
supplier side, each of the bids submitted from other participating
suppliers are detransformed from the buyer comparative bid
parameter into the supplier comparative bid parameter. This
detransformation is accomplished by solving the formula for x to
yield the formula x=(y-b)/m. In this detransformation process,
/Million BTU bid values that are to be broadcast to Supplier A are
converted to $/ton bid values using the multiplicative and/or
additive factors for Supplier A.
[0065] After the client component at Supplier A receives the
detransformed bid values, Supplier A is then able to view a
relative comparison of the bids in his own context. This relative
comparison corresponds to the relative comparison of the bids in
the buyer context. FIG. 6B illustrates a bid history chart in the
context of Supplier A. In this example, it is assumed that Supplier
A's multiplicative and additive factors are, m=0.87 and b=80,
respectively.
[0066] As FIG. 5B demonstrates, Supplier A can view the competitive
climate of the auction without having access to any of the details
of the transformation function (f) implemented by the buyer. From
Supplier A's perspective, all other suppliers are bidding the same
type of coal. Competition is therefore perceived as being based on
the $/ton price, not the /Million BTU price. If Supplier A decides
to beat the market leading bid, Supplier A would simply reduce his
$/ton bid and submit the new bid (e.g., bid of $17.01/ton bid at
01:25:28) to the auction server. The new $17.01/ton bid would then
be transformed into a 94.8 /Million BTU bid, i.e.,
0.87*17.01+80=94.8 /Million BTU, using the multiplicative and
additive adjustments for Supplier A.
[0067] In a similar manner, Supplier B can also view the
competitive climate of the auction without having access to any of
the details of the transformation function implemented by the
buyer. Supplier B's view is illustrated in FIG. 5C. In this
example, it is assumed that Supplier B's multiplicative and
additive factors are, m=0.81 and b=82, respectively. In Supplier
B's view, Supplier A's new bid of $17.01/ton (or 94.8 /Million BTU)
at 01:25:28 is fed back to Supplier B as a $15.80/ton bid, i.e.,
(94.8-82)/0.81=$15.80/ton, using Supplier B's multiplicative and
additive parameters.
[0068] In combination, FIGS. 5A-5C illustrate a feature of the
present invention that enables each supplier to view the auction in
his own context. These buyer-specific and supplier-specific
contexts enable the system to create a coal auction market without
revealing confidential information to the suppliers. The creation
of an online electronic auction greatly benefits the buyer by
allowing the buyer to get true market prices. The online electronic
auction can easily produce hundreds of bids in a span of a few
hours. This is in sharp contrast to traditional coal market
mechanisms that relied upon the simultaneous occurrence of
independent negotiations over a course of weeks.
[0069] It should be noted that a supplier may simultaneously offer
a plurality of products of differing technical specifications. In
this case, the transformation function must treat these offerings
separately. Each offering has its own context, and an array of
detransformed bid values unique to that offering.
[0070] It should be noted that a supplier could also modify a bid
by changing a non-price parameter. For example, instead of changing
the $/ton bid, a supplier could choose to change a particular
characteristic (e.g., % ash, % sulfur, etc.) of the coal that is
being bid. This new type of coal can be based upon a mixture or
blend of different types of coal within the supplier's control. By
adjusting the characteristics of the coal, the supplier is
effectively adjusting the multiplicative factor and/or additive
factor that defines his transformation function. For this reason,
the new blend of coal would define a new context for that supplier.
The supplier would then have the option of amending an existing
offering or creating a second offering. If the supplier creates a
new offering, viewing that new blended bid within the context of
the auction market would require a second bid history chart. In
effect, the supplier has entered two horses into the race. This has
the additional benefit to suppliers of allowing them to balance
their own supply with market demand in the most beneficial
manner.
[0071] Another example of transformation bidding is multi-currency
bidding. Multi-currency bidding is an auction format wherein the
buyer views all submitted bids in a base currency (e.g., U.S.
dollars), while each of the suppliers view all submitted bids in a
local currency (e.g., Japanese Yen, Swiss Francs, etc.).
Multi-currency bidding is described in co-pending U.S. application
Ser. No. 09/282,158, entitled "Method and System for Conducting
Electronic Auctions with Multi-Currency Bidding,", the disclosure
of which is hereby expressly incorporated in the present
application.
[0072] In the multi-currency bidding example, the local currency
represents a supplier comparative bid parameter. The exchange rate
between the local currency and the base currency represents a
non-comparative bid parameter. It should be noted that in the
multi-currency example, the non-comparative bid parameter is
provided by the buyer or independent party instead of the supplier.
In effect, the supplier's bid is a single parameter (i.e., local
currency price) to be transformed into a buyer comparative bid
parameter (i.e., base currency price).
[0073] In a similar fashion as the coal market example, each of the
suppliers can view the auction in their own context (or local
currency). Here, confidentiality of the transformation process is
not the driver for separate supplier views. Rather, separate
supplier views are desired because of user unfamiliarity of viewing
prices in a foreign currency. Detransformation is represented by
the conversion of base currency bids into the relevant local
currency.
[0074] In the multi-currency bidding application, the exchange
rates are not confidential. Accordingly, the
transformation/detransformation process can be performed at the
client component and/or the auction server component. For example,
assume that Supplier A is bidding in Japanese Yen, Supplier B is
bidding in Swiss Francs, and the buyer is viewing the auction in
U.S. dollars. The client component of Supplier A can submit the bid
in Yen or in U.S. dollars. If the bid is to be submitted in U.S.
dollars, the client component is configured to convert the bid to
dollars prior to submission to the auction server.
[0075] On the receiving end, the client component of Supplier B can
receive a bid price submitted by Supplier A in Yen, U.S. dollars or
Swiss Francs. If the auction server sends a bid submitted by
Supplier A in yen to Supplier B, the auction server is performing
the detransformation process (i.e., currency exchange to Yen). In
this case, no currency conversion is required by the client
component of Supplier B. Alternatively, the client component of
Supplier B can be configured to perform the currency exchange of
Supplier A's bid. This currency exchange can be based upon the
receipt of a bid in the base currency (U.S. dollars) or Supplier
A's local currency (Yen). In this case, the currency conversion is
performed by the client component of Supplier B prior to the
display of Supplier A's bid to Supplier B.
[0076] In other embodiments, multi-parameter price equalization
bidding can be used to solve other problems when price alone cannot
adequately discriminate between a plurality of offerings. One
example concerns transportation costs. Because buyers often control
inbound transportation and have favorable contract rates, the
transformation function might be configured to translate bids of
FOB supplier pricing into bids of FOB buyer. Another example
concerns penalty factors buyers might apply. Some suppliers may be
assessed penalties due to additional cost factors the buyer might
have to assume. For example, an overseas supplier might be
automatically penalized a given percent or fixed amount to cover
the extra costs of travel, input/export duties, and international
banking fees.
[0077] In other embodiments, the transformation function that
converts the supplier comparative bid parameter into buyer
comparative bid parameters might be non-linear. This non-linear
transformation may be implemented in a variety of ways. In one
embodiment, the algebraic transformation function (f) is defined as
a non-linear function rather than a linear function. The form of
this function might be a polynomial such as y=nx.sup.2+mx+b. It
might also use logarithms or power functions.
[0078] In another embodiment, the transformation function (f) uses
lookup tables. A lookup table is a form of transformation function
whereby a given input value or range of input values is translated
into a given output value. The lookup table is constructed in
advance in such a way that all possible values of input are
translated into an acceptable value of output.
[0079] Non-linear transformation functions can serve to provide
additional emphasis to certain parameters. For example, a product's
value may rise at a faster rate as a certain quality factor
approaches perfection. The value of a perfect diamond, for example,
can be many times higher than the value of a slightly imperfect
diamond. However, as the level of imperfection rises, the drop off
in value slows. This is a non-linear transformation from an
engineering attribute into value.
[0080] Lookup tables can be used to simplify preparation. For
example, consider the problem of translating FOB supplier prices
into FOB buyer prices, including transportation costs between a
supplier and a buyer. In theory, a linear transportation function
might be used to apply an additive factor such as "cents per unit
per mile shipped." In practice, it can be far simpler to prepare an
auction using a rule such as "within 100 miles shipping is $0.01
per unit, between 101-250 miles shipping is $0.03 per unit, and
above 250 miles shipping is $0.05 per unit." In this case, a lookup
table provides an easier implementation. In this framework,
supplier A located 60 miles from the buyer would be assessed $0.01
per unit for shipping, while supplier B located 105 miles from the
buyer and supplier C located 230 miles away would both be assessed
$0.03 per unit.
[0081] It should be noted that a combination of linear, non-linear,
and lookup table transformations might apply to any given auction.
For example, a linear transformation function might be used, where
various additive transformation factors are themselves the output
values from a lookup table, another linear function, or a
non-linear function. In other words, the transformation functions
may be nested to include more than one type of calculation in any
given embodiment.
[0082] Generally, where the transformation function is
non-confidential, the transformation process can be implemented
individually or jointly by the auction server component and the
individual client components. The joint implementation can be
designed in various ways to achieve the same goal, the support of
individual buyer and supplier views.
[0083] As noted above, the transformation process can also be used
in a context where only a single view of the auction is available.
Here, the buyer and each of the participating suppliers each view
the auction based on the buyer comparative bid parameter (e.g., NPV
bidding).
[0084] Yet another embodiment of transformational bidding includes
rebates and discounts. In addition to the bid parameters described
above, rebates and/or discounts may be included and operated upon
by the transformation function (f) to yield the buyer comparative
bid parameter value.
[0085] FIG. 6 illustrates a block flow diagram of a transformation
including rebates and discounts in accordance with one embodiment
of the invention. This preferred embodiment of the invention
applies the transformation function described with respect to FIGS.
1-5 above with rebates and discounts. Although FIG. 6 and other
figures presented herein may include a particular sequence of
steps, it can be appreciated that the sequence of steps merely
provides an example of how the general functionality described
herein can be implemented. Further, each sequence of steps does not
have to be executed in the order presented unless otherwise
indicated.
[0086] As shown in FIG. 6, a first bid having a first value and a
first unit of measurement is received at step 702. A second bid
having a second value and a second unit of measurement is received
at step 702 as well. At step 704, the first and second values are
transformed to third and fourth values, respectively, having a
standard unit of measurement. For example, a standard unit of
measurement might be a NPV for each of the total leasing costs and
total buy costs, as described in more detail in the '156
Application.
[0087] Before receiving the first bid and second bid, the auction
coordinator 20 may solicit potential bidders 30, as shown in FIG.
1A. In one embodiment, the auction coordinator 20 prepares a
request for quotation, provides the request for quotation to
potential bidders 30, and requests the potential bidders 30 to
respond to the request for quotation. The request preferably
identifies of the goods or services to be purchased.
[0088] In another embodiment of the invention, the first and second
values are transformed by determining a first transformation factor
for the first value, and a second transformation factor for the
second value. The first value is transformed using the first
transformation factor, and the second value is transformed using
the second transformation factor. In particular, the first value
and the second value are transformed via a linear transformation
for each value, with the linear transform having a multiplicative
adjustment or an additive adjustment. For example, the first value
and second value may be transformed by multiplying the first value
by the first transformation factor and the second value by the
second transformation factor.
[0089] The first and second transformation factors may be
determined using any number of methods. For example, one method for
determining the first and second transformation factors comprises
storing the first and second transformation factors in a look-up
table using computer memory, searching the look-up table for the
first and second transformation factors, and retrieving the first
and second transformation factors in accordance with the
search.
[0090] In this method, the transformation factors for each type of
bid are calculated before the start time for a particular lot in an
electronic auction. The transformation factors are stored in
computer-readable memory in the form of a look-up table. Whenever a
bid is received, the system searches the look-up table for the
appropriate transformation factor and retrieves the transformation
factor from memory. This method avoids the necessity of calculating
a transformation factor for each bid during the relatively short
time interval that an electronic auction is open. This also reduces
the processing requirements and therefore complexity of the overall
system.
[0091] Another method for determining the first transformation
factor includes identifying a first set of transformation variables
for the first value, specifying a first transformation function to
derive the standard unit of measurement using the first value and
the first set of transformation variables, receiving a value for
each of the first set of transformation variables, and calculating
the first transformation factor using the received values and the
first transformation function. This method permits a transformation
factor to be calculated as each bid is received. This may be
desirable if the values for the transformation variables, or the
transformation variable themselves, are dynamic in nature. In this
case a static transformation factor may not be appropriate
depending on the level of accuracy required for a particular
bidding event. In one embodiment, the first and second bidders are
electronically coupled to an auction coordinator during the auction
and the first and second bids are submitted to the auction
coordinator online during the auction.
[0092] Similarly, a method for determining the second
transformation factor includes identifying a second set of
transformation variables for the second value, specifying a second
transformation function to derive the standard unit of measurement
using the second value and the second set of transformation
variables, receiving a value for each of the second set of
transformation variables, and calculating the second transformation
factor using the received values and the second transformation
function.
[0093] It is worthy to note that any number or type of
transformation variables can be used for a desired transformation
function and still fall within the scope of the invention.
Additional bids with additional values may also be converted to the
standard unit of measurement. Furthermore, the transformation
functions described with respect to FIG. 6 may be implemented using
the generic transformation 500 described with respect to FIG.
4.
[0094] In one embodiment of the invention, the standard unit of
measurement is a buyer comparative bid parameter. In particular,
the buyer comparative bid parameter represents a net present
value.
[0095] Once the different bids are normalized using a standard unit
of measurement, the third and fourth values are compared. The third
value is then ranked with respect to the fourth value in accordance
with the comparison. This relative ranking is then displayed to the
buyer.
[0096] In one example of transformational bidding with rebates and
discounts, business discounts are factored into bids in an auction
for accessories. Often, a single most competitive, high quality
supplier is desired, so the discounts may have a significant impact
on the award decision. The discount may include a fixed percentage
price reduction, such as 20%, for the accessories after a
250.sup.th production unit for a total of 7000 units. In the
initial RFQ, the maximum bid value may be increased by
approximately 29% to account for this price reduction so that the
20% discount is properly factored into the bids. If a ten-year
contract period is used as a normalizing period of time, the
resulting transformational bidding equation is:
A=B-C/D
Where:
[0097] A=Transformed Bid [0098] B=Entered Bid [0099] C=Total
Cumulative Savings for ten-year contract period, such as between
2001 and 2010 inclusive. [0100] D=5798=[250*1.0+(7185-250)* 0.8],
where 7185 is equal to the Total Forecast Volume between 2001 and
2010 and the 20% price discount is accounted for after the
.sub.250th unit.
[0101] Not only is it important for the buyer to have bids with
different units of measure transformed to a standard or uniform
unit of measure, it is important for the sellers (i.e., bidders) to
understand where their bid stands in relation to the other sellers.
This need, however, must be balanced against the need of the buyer
to keep certain information from the sellers to ensure a particular
seller does not have a bidding advantage. Therefore, one embodiment
of the invention allows for bids having a different unit of measure
than used by one particular bidder to be converted to a unit of
measure used by that particular bidder. Using the above methods,
assume the first bid is from a first bidder and the second bid is
from a second bidder. The third value (e.g., representing the
transformed first value submitted by the first bidder) is
detransformed to a fifth value having the second unit of
measurement. Similarly, the fourth value (e.g., representing the
transformed second value submitted by the second bidder) is
detransformed to a sixth value having the first unit of
measurement. The fifth value is then sent, or transmitted, to the
second bidder so that the second bidder can know where their bid
ranks with respect to other bids, even if the other bids use a
different unit of measurement. The sixth value is sent to the first
bidder for the same reasons. In other words, the bids from other
bidders using a different unit of measurement are converted to the
unit of measurement used-by a particular bidder so that the
particular bidder is made aware of where its bid ranks in
comparison to the other bids. The detransformation process may be
implemented using transformation 800 and its appropriate
mathematical and functional variations, as well as the process
described with respect to FIGS. 5A-5C.
[0102] The embodiments of the invention may be implemented by a
processor-based computer system. The system includes a database for
receiving and storing bid information, including rebates and
discounts, from at least one bidder, and software for transforming
bid information into values having the standard unit of
measurement. The system also preferably includes a database for
storing the lookup table of transformation factors that convert the
bid information into the values having the standard unit of
measurement.
[0103] With reference to FIG. 3, a computer system 20 operates to
execute the functionality for server component 23. Computer system
20 includes a processor 21, a memory 22A and a disk storage 22B.
Memory 22A stores computer program instructions and data. Processor
21 executes the program instructions or software, and processes the
data, stored in memory 22A. Disk storage 22B stores data to be
transferred to and from memory 22A. All these elements are
interconnected by one or more buses, which allows data to be
intercommunicated between the elements.
[0104] Processor 21 can be any type of processor capable of
providing the speed and functionality required by the embodiments
of the invention. For example, processor 21 could be a processor
from a family of processors made by Intel Corporation or
Motorola.
[0105] For purposes of this application, memory 22A and disk 22B
are machine readable mediums and could include any medium capable
of storing instructions adapted to be executed by a processor. Some
examples of such media include, but are not limited to, read-only
memory (ROM), random-access memory (RAM), programmable ROM,
erasable programmable ROM, electronically erasable programmable
ROM, dynamic RAM, magnetic disk (e.g., floppy disk and hard drive),
optical disk (e.g., CD-ROM), optical fiber, electrical signals,
lightwave signals, radio-frequency (RF) signals and any other
device or signal that can store digital information. In one
embodiment, the instructions are stored on the medium in a
compressed and/or encrypted format. As used herein, the phrase
"adapted to be executed by a processor" is meant to encompass
instructions stored in a compressed and/or encrypted format, as
well as instructions that have to be compiled or installed by an
installer before being executed by the processor. Further, system
20 may contain various combinations of machine readable storage
devices, which are accessible by processor 21 and which are capable
of storing a combination of computer program instructions and
data.
[0106] Memory 22A is accessible by processor 21 over a bus and
includes an operating system, a program partition and a data
partition. The program partition stores and allows execution by
processor 21 of program instructions that implement the functions
of each respective system described herein. The data partition is
accessible by processor 21 and stores data used during the
execution of program instructions. For some embodiments of the
invention, the program partition contains program instructions that
performs the buy versus leasing transformation functionality
described above.
[0107] Computer system 20 also includes a network interface 28.
Network interface 28 may be any suitable means for controlling
communication signals between network devices using a desired set
of communications protocols, services and operating procedures.
Communication protocols are layered, which is also referred to as a
protocol stack, as represented by operating system 24, a
CBE-communication layer 26, and a Transport Control
Protocol/Internet Protocol (TCP/IP) layer 27. Network interface 28
also includes connectors for connecting interface 28 with a
suitable communications medium. Those skilled in the art will
understand that network interface 28 may receive communication
signals over any suitable medium such as twisted-pair wire,
co-axial cable, fiber optics, radio-frequencies, and so forth.
[0108] FIG. 3 also shows a computer system 15 that operates to
execute the functionality for client component 16. Computer system
15 includes a processor 31, a memory 32A, disk storage 32B, a
communications interface 38, and a protocol stack having a
CBE-communication layer 37 and a TCP/IP layer 35. These elements
operate in a manner similar to the corresponding elements for
computer system 20.
[0109] Another embodiment of the present invention includes a first
machine readable code that receives bid information from a bidder,
a second machine readable code that receives at least one of a
rebate and discount from the bidder, a third machine readable code
that generates a transformed bid using the bid information and the
at least one of the rebate and discount, and a fourth readable code
that transmits the transformed bid information to an auction server
to generate a relative comparison of bids on a common competitive
basis.
[0110] It should be noted that the mechanism for transformational
bidding with rebates and discounts described above may also be
applied to transformational bidding with agent's commissions and/or
finder's fees. In this case, agent's commissions or finder's fees
for finding a supplier would be applied to the transformed bids
from suppliers provided by the agent or finder. The mechanism
described for rebates and discounts would apply, but instead of
reducing costs in the transformed bid to account for the rebates
and discounts, costs would be added to the transformed bid.
[0111] While the invention has been described in detail and with
reference to specific embodiments thereof, it will be apparent to
one skilled in the art that various changes and modifications can
be made therein without departing from the spirit and scope thereof
For example, while the auction functions described above have been
described in the context of downward pricing (reverse) auctions,
the auction functions can be equally applied to upward pricing
(forward) auctions. Thus, it is intended that the present invention
covers the modifications and variations of this invention provided
they come within the scope of the appended claims and their
equivalents.
* * * * *