An auction is a strategic sourcing event that is used to negotiate the best value in a short period of time. In an auction, suppliers bid to provide products and services. An auction can occur on its own or in conjunction with an RFx. Unlike an RFx, which can go on for weeks, auctions typically last for a few hours to a few days.
Although auctions can be either reverse or forward, you typically use reverse auctions for your sourcing events. In a reverse auction, the price drops as the auction proceeds, whereas in a forward auction, the price increases as the auction proceeds.
Auction types determine the structure of the auction by defining its bidding and disclosure rules. A number of predefined auction types are included in the Auctions module. A system administrator can create additional auction types.
The Auctions module features an Auction Monitor that enables you and the bidders to observe the events of the auction in real time. You can also use the Auction Monitor to communicate with bidders through instant messaging.
A Dutch auction is a fast-moving auction event in which line items steadily increase in price until the first supplier agrees to sell some quantity of the item at the current price. Line items open and close consecutively and only one line is open for bidding at any given time. The bid clock indicates the time remaining for bidding on the current line item. The initial starting price is usually set lower than market price and the price is incremented at a predefined time interval, which is usually set in minutes.
In a Dutch auction, the purchaser provides the starting price, time increment, and price increment for each line item. Bidding begins at the starting price. If no supplier is willing to sell at the starting price after one time increment, the bidding price is increased by the price increment. This process repeats until a supplier places a bid. If no reserve price is set, the first supplier who places a bid wins the award and the line item closes. If a reserve price is set, the first supplier to place a bid below that reserve price wins the award.
If no supplier bids and the line item has an optional ceiling price, the line item closes when the price increment reaches the ceiling price. If no ceiling price is entered, and no supplier bids on the line item, the line item remains open for bidding until the purchaser closes it manually.
You can access the following functions by choosing
:Option |
Description |
---|---|
Create Auction From Template |
Choose to create a new auction from a template. See Creating, Changing, and Cancelling an Auction. |
Create Auction |
Choose to create a new auction. See Creating, Changing, and Cancelling an Auction. |
My Running Auctions |
Choose to see the Auction Event List page displaying a list of auctions for which you are an owner that are currently in progress. |
Closed Auctions |
Choose to see the Auction Event List page displaying a list of auctions that are closed. |
Search Auctions |
Choose to see the Auction Event List page displaying a list of all auctions. |
My Auctions |
Choose to see the Auction Event List page displaying a list of auctions for which you are an owner. |
Auction Summary Extract |
Choose to see a report providing access to the summary information and auction type attributes for a set of auction events in a given time period for printing or exporting. |
Create Auction Event Template |
Choose to create a new auction template. See Creating, Changing, and Cancelling an Auction. |
For details, see Creating, Changing, and Cancelling an Auction.
In the toolbar, choose Actions and then select Auction Monitor from the menu. For details, see Auction Monitor.
Use the Auction Monitor to track activity in the auction.
If automatic awards are enabled in the auction type, awards will be made and announced automatically at the end of the auction, based on the winning bids.
If manual awards are enabled in the auction type, choose the Awards tab to award the line items manually when the auction closes. For details, see the section Awarding Auction Line Items Manually in Auction Awards.