The Effect of Buyer-Imposed Bidding Requirements and Bundle Structure on Purchase Performance
AUTHORS

Tobias Schoenherr is an assistant professor of operations and supply chain management in the College of Business at Eastern Michigan University in Ypsilanti, Michigan.

INTRODUCTION
One of the most important components of the request for quote (RFQ) process is the buyer’s determination of the appropriate order lot (bundle) that a supplier will evaluate and quote upon. The RFQ order lot may consist of a single stock-keeping unit (SKU), but will more often be comprised of a set or bundle of different items that is attractive to one or more potential bidders. This bundling function in business-to-business (B2B) procurement is defined as the aggregation of two or more products and/or services by an industrial buyer into a bundle that is put up for bid to potential suppliers in a single RFQ. The importance of bundle composition and its potential impact on purchase performance was first mentioned by Mabert and Schoenherr (2001), who discovered in their case study that bundle structure significantly influences the buyer’s perceived performance of the RFQ. Beall, Carter, Carter, Germer, Hendrick, Jap, Kaufmann, Maciejewski, Monczka and Petersen (2003) confirmed this importance and suggested two commonly used bundling strategies, market basket bundling and individual bundling, which will be further described in the next section. These observations were followed up by Schoenherr and Mabert (2006), who provide an overview of the current state of bundling practice based on 30 case studies and a small exploratory survey. None of these studies mentioned above, however, consider the influence of operational bidding requirements specified by the buyer or practiced because of certain industry customs. As such, suppliers can be constrained by whether they are required to submit bids on all items in the particular bundle, whether suppliers are merely encouraged to do so or whether