Abstract: Raw material procurement problem is analyzed. An import feature of this problem is the price is uncertain and distribution-free, but its lower bound is increasing over time. In the actual raw materials procurement practice，the varying price is often unpredictable. Previous scholars have studied the online procurement problem with uncertain prices, however, they usually assumed that the price will be within a uniform constant upper and lower bound, which did not take into account the vary of both two bounds will change over time. This paper proposes and studies an online procurement problem with the assumption that the lower bound for price will increase with time. We construct the mathematical model, which can be seen as a generalization of classical one-way trading problem. We present the corresponding competitive procurement strategy and prove its competition ratio performance. We also prove that the strategy is optimal by presenting a matched lower bound for competitive ratio. Finally, a numerical analysis is conducted to further illustrate the competition strategy presents a soupier competitive performance.

Key words: online; procurement; competitive strategy; competitive ratio