Proxy Bids

In Emptoris Sourcing, a series of bids placed by the system on behalf of suppliers until it becomes the winning bid or reaches the cut-off value entered by the supplier are known as proxy bids. Proxy bids are based on the price per unit field and are generated using the minimum bid change defined for the item. This feature is applicable to English reverse and forward auctions.

Note: If price per unit is defined as a formula, the system modifies the dependent field set by the buyer in order to generate the proxy bid.

Floor price and ceiling price

The cut-off value in reverse auction is called the floor price. In forward auctions the cut-off value is called ceiling price.

The following table represents an example of proxy bids applied to an RFx.

Table 1. Example of Proxy Bids
Minimum Bid Change: $10
Supplier	Currency Bid (PPU)	Winning?
Lee	$ 305	Yes
Marge	$ 500	No
Tim	$ 325	No
PPU=Price per unit

At this stage if Marge entered a proxy bid with the lowest price that she was willing to pay as $ 280, the system would enter bids decreasing each bid by $ 10 until it becomes the winning bid.

Table 2. Example of Proxy Bids
Minimum Bid Change: $10
Supplier	Currency Bid (PPU)	Winning?
Lee	$ 305	No
Marge	$ 300	Yes
Tim	$ 325	No
PPU=Price per unit

Since $ 300 is better than the last winning bid, the price does not fall below it. If at this stage, Lee further reduced his bid to $ 275, Marge's new bid would be $ 280, which is her floor price, but it would not be the winning bid.