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The Effect of Buyer‐Imposed Bidding Requirements and Bundle Structure on Purchase Performance
Author(s) -
Schoenherr Tobias,
Mabert Vincent A.
Publication year - 2007
Publication title -
journal of supply chain management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.75
H-Index - 92
eISSN - 1745-493X
pISSN - 1523-2409
DOI - 10.1111/j.1745-493x.2007.00025.x
Subject(s) - bundle , bidding , business , purchasing , respondent , context (archaeology) , marketing , real time bidding , stock (firearms) , industrial organization , microeconomics , economics , mechanical engineering , paleontology , materials science , political science , law , composite material , biology , engineering
SUMMARY Many requests for quotation (RFQs) consist of a group of different stock‐keeping units (SKUs), bundled together in a single order lot. How this lot is structured and whether suppliers are required to adhere strictly to its composition (i.e., quote on all items in the bundle versus a subset) may significantly impact the competitiveness of the bidding and the buyer's perceived performance of the purchase. To better understand bundling practices and experiences, a survey of purchasers that aggregate several SKUs into a single bundled RFQ was undertaken. Within this context, respondent replies are categorized by buyer‐imposed bidding requirements according to whether suppliers are required to submit bids on all items in the bundle, merely encouraged , or free to bid on any item combination in the bundle. The resulting bundle structure is examined and its impact on purchase (bundle) performance, as perceived by the buying company, is explored. Results are discussed, with managerial insights provided for purchasing professionals.