Modeling The Supply-Demand Interaction In Electronic Commerce: A Bi-Level Programming Approach


Daniel Y. Shee
Tzung-I Tang
Gwo-Hshiung Tzeng


The purpose of this paper consists in establishing the model for the supply-demand interaction in the age of electronic commerce. First of all, the study uses the individual objectives of both parties as the foundation of the supply-demand interaction. Subsequently, it divides the interaction, in the age of electronic commerce, into the following two classifications: (i) Market transactions, with the primary focus on the supply-demand relationship in the marketplace; and (ii) Information service, with the primary focus on the provider and the user of information service. This study focusing on the proceeding two classifications, and in accordance with the relationship types and dominance, will proceed to divide the supply-demand relationship into four parts for discussion. By applying the bi-level programming technique and a flow chart of interaction process, the study will develop an analytical process to explain how supply-demand interaction achieves a compromise or why the process fails. Finally, it will provide an example of information service for explaining bi-level programming technique’s practical applied process.

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Published Date: 

May, 2000

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