Procurement Auction Using Actor-Critic Type Learning Algorithm

Raju, CVL and Narahari, Y and Shah, Saurabh (2003) Procurement Auction Using Actor-Critic Type Learning Algorithm. In: 2003 IEEE International Conference on Systems, Man and Cybernetics, 5-8 October, USA, Vol.5, 4588 -4594.

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Abstract

Procurement, the process of obtaining materials or services, is a critical process for any organization. While procuring a set of items from different suppliers who may sell only a subset (bundle) of a desired set of items, it will be required to select an optimal set of suppliers who can supply the desired set of items. This is the optimal vendor selection problem. Bundling in procurement has benefits such as demand aggregation, supplier aggregation, and lead-time reduction. The NP-hardness of the vendor selection problem motivates us to formulate a compatible linear programming problem by relaxing the integer constraints and imposing additional constraints. The newly formulated problem can be solved by a novel iterative algorithm proposed recently in the literature. In this paper, we show that the application of this iterative algorithm leads to an iterative procurement auction that improves the efficiency of the procurement process. By using reinforcement learning to orchestrate the iterations of the algorithm, we show impressive gains in computational efficiency of the algorithm.

Item Type:	Conference Paper
Publisher:	IEEE
Additional Information:	Copyright 1990 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE.
Keywords:	Eprocurement;iBundle;Primal-Dual algorithm;Stochastic Dynamic Programming;Q-learning;Actor-Critic algorithm
Department/Centre:	Division of Electrical Sciences > Computer Science & Automation
Date Deposited:	09 Jan 2006
Last Modified:	19 Sep 2010 04:22
URI:	http://eprints.iisc.ac.in/id/eprint/4968

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