ITPEC FE Morning October 2019 Question 75
Which of the following is the procurement process that enables suppliers to bid against one another on the Internet in order to sell their products or services under the conditions specified by a general customer?
Explanation
Reverse auction — the buyer states the conditions and the sellers bid against one another, so the price goes down.
In an ordinary auction one seller offers goods and buyers raise their bids. A reverse auction swaps the roles: a customer publishes what it wants to buy and the conditions, and suppliers compete on the Internet by offering lower prices, the lowest acceptable bid winning. It is used in e-procurement to cut purchasing costs.
Answer (c)
Why not others:
- •(a) — B to B names who trades with whom (business with business), not a bidding procedure
- •(b) — G to C is government providing services to citizens, such as online applications, with no bidding among suppliers
- •(d) — a virtual mall gathers many online shops on one website, where customers buy at the shops' listed prices
Key rule: In an auction buyers compete and the price rises; in a reverse auction sellers compete and the price falls.
Business Industry · AI-written, may contain errors
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