Mars Incorporated: Online Procurement Harvard Case Solution & Analysis

In this way, the company initiated a first round auction design. The buyers of the company Mars Inc. makes a list of products required, and then enlist the request for quote that a company needs to buy from the suppliers through an online auction website. All the suppliers are requested to visit the site and make a portfolio of products that they can best offer to the buyers. After making a portfolio, suppliers submit their desired bids and wait for the buyer to respond. One supplier is allowed to submit more than one bids as they might need to make a bid with a combination of different products. After the ceasing of bidding, the first round of the auction closes and the buyer analyze the bids made by suppliers.

Companies choose bids with a best offer in terms of price and product portfolio. Analyzing and identifying the best bid can be done with the help of the solver. The objective function for this problemhas been developed based on the required quantities for each of the items required by the company. This objective function has been used to minimize the total cost of purchasing. The cost for each bid for round 2 will then be finalized. The linear programming method has been used, and the calculation has been performed in the excel sheet through solver to calculate all the desired decision variables and the optimum cost value. In the excel spreadsheet, it has been seen that bid number 7 is bidding for $1199 and after the implementation of programming, the cost becomes $1616. It shows that the company would go to bid 6 that is based on 3 Musketeers medium and small display boxes.

3. Should Mars make the bids public? Why or why not? If they do make the bids public, when should they publish the bids?

In the public auctions, those products, properties or anything has placed that a bidder needs to sell quickly with the highest possible price. The value of the most recent bid is shown on the main page and the buyers ask for the lowest bid. The case of these types of bids happens in the reverse transactions only where a single buyer and a set of pre-qualified suppliers negotiated at a private Web-based exchange. A "reverse" auction was one where the low bidder won as opposed to the more common auction, for example, for works of art, where the high bidder won. At public auction, buyers often purchase products on the spot as well.

On the other hand, private bids are the ones that are not in a hurry and wait until they got a best competitive price. The offer given by the bidder to the buyer is often kept as a secret and is not disclosed in the public. However, this type of auction raises questions regarding the transparency of the auction system. The price kept secret even after the sale is completed. In a private auction, only two parties know the actual price of a product or a property that is the buyer and the seller.

Making a bid public or private depends upon the products required by the company. For instance, if Mars requires a product that is needed on an urgent basis or otherwise it may impact the production and manufacturing, then it should choose public bids in order to receive quick bids. On the contrary, if the desired product is not urgent, the company can opt for public bidding to get the best possible price without disclosing the price and quantity of the product.

4. Suppose you were a supplier, and you lost in the first round of the auction. How could you change your bid to ensure success in a later round of the auction?

If a supplier lost a bid in the first round of the auction, then it clearly indicates that the bid given by the suppliers was not attractive enough for the buyer to opt. Mars would close the first round of the auction and determine the set of bids that met their requirements. This provisional set of winning bids and the bundles they represented would then be communicated back to the suppliers who could then reformulate their bids in the second round of bidding. This process would continue until there were no more bids. In the case of Mars Inc., if a supplier lost its bid in the first round of auctions, it shows that the requirement of the company has not been met. In order to make sure that the supplier win the bid, it needs to make a combination of products that gives the least price with the best quality......................................

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