1. Business Intelligence System
4.1 OPENING VIGNETTE: MODEL-BASED AUCTIONS SERVE MORE LUNCHES IN CHILE
Langgeng Listiyoko

2. Background : problem situation
JUNAEB yang merupakan lembaga pemerintah yang peduli/ bertanggung jawab dalam hal bantuan sekolah berhasil melayani 2 juta siswa untuk makan siang dan sarapan mereka.

3. Background : problem situation
1980 : 1 vendor peserta lelang
1990 : 30 vendor
Bargaining power vs ineficiencies
High price for low quality
Mekanisme lelang

4. Proposed solution Objective Constraint Integer linier program
Select combination of bids
Constraint
Number of vendor, max award per vendor, minimum price
Integer linier program

5. Proposed solution Filtering candidate : Classifying :
Managerial, technical, and financial
Classifying :
Financial & operating capacity
Technical & managerial competency
Tender calling : 1 TU 1 vendor
Online register

6. Result Optimizing result New model saving
improvements in the nutritional quality of the meals, the meals-services infrastructure, and the labor conditions of the food handlers
Cost increasing up to 24%
Saving about $40 million a year, of the costs of feeding children
New model saving
Objective and transparent - providing few opportunities for vendors to put pressure on decision makers
Impartial and reliable - forces companies to compete and to increase productivity
Cover multiple Tus - vendors can take advantage of economies of scale
Get the lowest-cost bid combination

7. Case Question What decision problem does the Chilean agency free?
Select a combination of bids that supply all of the TUs at a minimum cost.
The performance of vendors based on JUNAEB’s evaluations, or their quality index, is also a factor in awarding contracts.
The decision is either to accept the bid or reject.

8. Case Question
Would a decision process that does not use a model be able to accommodate the desired goals?
Yes,but extremely not easy regarding to the complexity of the scenario spesifically. In other word the model was very helpful in eficiencies.

9. Case Question
What other approaches could you use to make this decisions?
Management science support

10. Case Question
What other applications of this type of auction model can you envision?
Additional modelling application