A neural networks approach for forecasting the supplier’s bid prices in supplier selection negotiation process

Abstract

Supplier selection negotiation is a sophisticated and challenged job due to the diversity of intellectual backgrounds of the negotiating parties, the many variables involved in supply–demand relationship, the complex interactions and the inadequate negotiation knowledge of project participants. To do the job well, it is necessary to develop an intelligent system for negotiation support in supplier selection process. Therefore, an artificial neural network-based predictive model with application for forecasting the supplier’s bid prices in supplier selection negotiation process (SSNP) is developed in this paper. By means of the model, demander can foresee the relationship between its alternative bids and corresponding supplier’s next bid prices in advance. The purpose of this paper is applying the model’s forecast ability to provide negotiation supports or recommendations for demander in deciding the better current bid price to decrease meaningless negotiation times, reduce procurement cost, improve negotiation efficiency or shorten supplier selection lead-time in SSNP.