Compound Mechanism Design onMulti-attributeand Multi-source Procurement of Electricity Coal


1 Institute of Systems Engineering, Huazhong University of Science and Technology, Wuhan 430074, P.R. China

2 School of Economic and Management, Wuhan University, Wuhan 430072, P.R. China

3 The Logistics Institute-Asia Pacific, National University of Singapore, Singapore.


In this paper, the decision making problem ofelectricity coal procurement in power industry is investigated, and a two-stage compound mechanism based on auction and negotiation is designed for multi-attribute and multi-source procurement of electricity coal. In the first stage of this compound mechanism, a multi-attribute auction mechanism of electricity coal is designed. Concretely, the buyer’s utility function and the supplier’s utility function are defined, and the scoring rules and bidding rules are given. Moreover, aiming at maximizing the buyer’s expected utility, an optimization model of selecting winners in multi-attribute auction of electricity coal is established, and then the suppliers’ optimal bidding strategies are discussed, and the feasibility of auction mechanism is proved. Based on the winners’ scheme and corresponding pre-allocation results of electricity coal supply in the auction stage,a negotiation mechanism which can further improve the allocation efficiency and optimize the attribute combination is designed in the second stage of this compound mechanism, and the bidding efficiency is calculated by using the method of Data Envelopment Analysis (DEA) for each winner. Finally, the specific implementation steps are given to show how to apply this two-stage compound mechanism in the actual procurement of electricity coal.