Abstract
Discount auction is a market mechanism for buying heterogeneous items in a single auction. The suppliers submit discount bids, which consist of two parts: the individual cost for each of the items and discounts based on the number of items procured. The winner determination problem faced by the buyer is to determine the winning suppliers and their corresponding winning items, such that the total cost of procurement is minimized. This problem is \({\cal NP}\)-hard and in this paper we propose a novel branch and bound algorithm called as branch on price, which uses a tight integer programming formulation with valid inequalities. Computational experiments show that the proposed algorithm is many folds faster than the existing algorithm.
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Kameshwaran, S., Benyoucef, L. (2006). Branch on Price: A Fast Winner Determination Algorithm for Discount Auctions. In: Cheng, SW., Poon, C.K. (eds) Algorithmic Aspects in Information and Management. AAIM 2006. Lecture Notes in Computer Science, vol 4041. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11775096_35
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DOI: https://doi.org/10.1007/11775096_35
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