Bid Offer Processing System Using Minimum Improvement Value
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Solution Overview
Problem
Current petroleum products trading lacks efficient auctioning systems that maintain confidentiality and reduce the time taken for tendering processes, as traditional methods are transparent and manual, leading to longer processing times and potential profit losses due to bid transparency and slow processing.
Innovation Solution
A system and method for processing bid offers based on a minimum improvement value, which includes a registration module, tender creation, bid processing, and auctioning module to determine and display a 'minimum bid improvement' value per unit without disclosing the actual best price, facilitating quick and confidential bid revisions and auctions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If traditional transparent auctioning is used, then bid confidentiality is lost, but processing time is reduced
Solution Approach 1:
The system introduces an intermediary mechanism - the minimum improvement value - that mediates between bid confidentiality and processing efficiency. This intermediary allows bidders to compete without revealing their actual bids, while still enabling the system to determine winners automatically based on predefined criteria, thus resolving the contradiction between maintaining confidentiality and reducing processing time
Solution Approach 2:
The system changes the parameter of bid evaluation from displaying actual bid prices to displaying minimum improvement values. This parameter transformation maintains bid confidentiality while enabling automated comparison and winner determination, thereby reducing processing time without sacrificing information security
2Measurement precision
If manual bid offer processing is used, then calculation accuracy is maintained, but processing time increases
Solution Approach 1:
The system implements self-service automation where the computer automatically calculates net delivered prices, determines minimum improvement values, identifies winners, and processes bid revisions without human intervention. This automated self-service maintains calculation accuracy through consistent algorithmic processing while dramatically reducing processing time
Solution Approach 2:
The patent replaces manual mechanical calculation processes with automated computer-based calculations. The system uses algorithms to compute net delivered prices and minimum improvement values, substituting human manual work with automated computational processes that maintain precision while reducing time consumption
3Loss of information
If best bid prices are disclosed, then market transparency is improved, but bid confidentiality is compromised
Solution Approach 1:
The minimum improvement value serves as an intermediary that provides market transparency without revealing confidential bid prices. It allows participants to understand the level of improvement needed to win without exposing actual bid amounts, thus maintaining secrecy while improving operational clarity
Solution Approach 2:
The system transforms the transparency parameter from displaying actual bid prices to displaying minimum improvement values. This parameter change maintains bid secrecy while providing sufficient information for market participants to make informed decisions, resolving the contradiction between secrecy and transparency
4Measurement precision
If multiple bid factors are considered, then bid evaluation accuracy is improved, but calculation complexity increases
Solution Approach 1:
The system merges multiple bid evaluation factors (base price, discounts, premiums, delivery terms, payment conditions) into a single integrated net delivered price calculation. This consolidation maintains comprehensive evaluation accuracy while simplifying the overall calculation structure by combining multiple parameters into one unified metric
Solution Approach 2:
The net delivered price calculation serves as a universal multi-functional parameter that simultaneously evaluates multiple bid factors. This single parameter performs multiple evaluation functions, reducing calculation complexity while maintaining comprehensive bid assessment accuracy
Data Source
AI summary
A system and method to process bid offers based on a minimum improvement value is described. The method comprises receiving a plurality of bid offers from the plurality of users for a tender. Further, at least two bid offers are identified based on a net delivered price value corresponding to each of the plurality of bid offers, and are invited for an auction. Furthermore, for each user in the auction, the minimum improvement value may be determined based on the bid offer of the corresponding user, a best bid offer among the at least two bid offers, and a predefined improvement factor. A revised bid offer may be received from the users based on the minimum improvement value, and a revised minimum improvement value may be determined for receiving further bids.