Dynamic Pricing Possibilities in the Purchase of Bulk Fuel for the Department of Defense
Abstract
The conclusion of the twentieth century and the beginning of the twenty-first century has seen a tremendous explosion in the use of Information Technology (IT) in the business world. One of the latest IT ventures has combined the centuries old auction marketplace Dynamic Pricing mechanism with today's nearly instant communications in the IT environment. The result has been the development of price auctions for products and services via the Internet. United Airlines held a Jet-A fuel reverse auction on February 8, 2001. The auction was for 140,350,000 gallons of Jet-A fuel for delivery to 10 airports and four pipeline terminals. Defense Energy Support Center (DESC) purchases all fuel for the Department of Defense (DoD). DESC's fuel purchase program is similar to United Airlines. To determine the lowest overall laid-in cost for large purchase programs the following must be considered: * Multiple offers/sources for each product (1) Multiple requiring locations/destinations *Both FOB (2) Multiple distribution cost components and opt ions This research explores the possibility of using Dynamic Pricing via online auctions to purchase bulk fuel for DoD in the same manner as United Airlines.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 2001
- Accession Number
- ADA401083
Entities
People
- Kenneth Finley
Organizations
- Naval Postgraduate School