Automated negotiations of supply contracts for flexible production networks

Non-hierarchical regional production networks are the object of a collaborative research project carried out at Chemnitz University of Technology. Non-hierarchical production networks are created by forming a co-operation of small autonomous manufacturing units, so called competence cells. The cell's autonomy in the network model allows each cell to pursue its own agenda of production tasks. Thus a cell's agenda might be in conflict with supply requests within the network. The resolution of such conflicts requires a negotiation between client and supplier to harmonise their individual interests. Our paper proposes a software agent, capable to conduct an automated negotiation in this situation, in order to assist the human decision-maker and accelerate the harmonisation. The agent can perform an integrative negotiation about multiple interdependent properties of the supply contract, such as price, volume and delivery date. The negotiation protocol follows the offer-counteroffer principle and an adaptive offer generation strategy. However, based on the utility theory, the agent is able to create a bundle of equally good offers, each of them consisting of a particular combination of property values. By proposing more than one offer, the number of negotiation acts is reduced to a necessary minimum and the overall quality of a deal can improve. In the paper, we show the conflict resolution in the context of non-hierarchical production networks. Furthermore, we demonstrate that our agent model is flexible enough to be applied in supply scenarios requiring the negotiation of contracts. (C) 2003 Elsevier B.V. All rights reserved.