Link to "2-15.8 Excess Capacity in Industry" Link to contents for "2 USPS Supplying Practices Process Step 2: Evaluate Sources"      Link to "2-15.10 Flexibility"

2-15.9 Price

If price is the key selection criteria for the buyer, then conducting a reverse auction may be the right strategy to implement. In a reverse auction, multiple sellers of products or services are competing for the business of a single buyer, driving the price down. The supplier with the lowest bid in a reverse auction typically wins the auction.

Conversely, if the buyer is focused on the total life cycle cost and not just on the cost of a particular good or service itself, a reverse auction would not be the appropriate sourcing method, because price is not the driving factor.




Link to "2-15.8 Excess Capacity in Industry" Link to contents for "2 USPS Supplying Practices Process Step 2: Evaluate Sources"      Link to "2-15.10 Flexibility"