A large European retailer was in need of substantial volumes of orange- and apple juice for Q4 of 2015. Only two potential sources were qualified and the initial bids from suppliers were far apart. Also, the buyer needed to factor different logistics costs and payment methods into the bids.
- Buyer utilized a Cherry Picking Auction in order to have a clear line-by-line competition
- A green/yellow/red traffic light system was used to encourage bidding
- Significant bidding activity with 114 total bids placed
- 20 extensions
- Savings of 8,94% relative to target price
- Supplier with payment and logistics advantage was still unable to beat price of incumbent supplier