4 Replies Latest reply on Nov 8, 2013 5:56 AM by mmg

    Percentage Index auction and Forward auction

    mmg Journeyman

      In terms of functionality, what are the differences, if any, between a 'forward auction' and a 'percentage index auction with upward (or discount) bidding'?

        • Re: Percentage Index auction and Forward auction
          David Morel Master

          A forward auction is like a reverse auction,  but the bid direction is going up. These are typically used for selling but not a requirement. Index auctions let bidders bid based upon a discount or premium on a published index.  For example,  you might have a component for an item that is steel, you can have them bid based on a steel index so the price you pay changes with the commodity prices over the life of the agreement.

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            • Re: Percentage Index auction and Forward auction
              mmg Journeyman

              That helps, thank you. But here's a follow-up question. Let's say I want to auction the 'rebate' component of a bid; from a buy-side, the higher the rebate the more competitive the bid. Could I then either create a forward auction with rebate being the line item or an index auction with discount percentage and have index set to 100? Would both auctions operate in the same way? Would there be any differences in set-up? Or in what the sell-side views?