This study proposes a new and highly efficient, dynamic combinatorial auction mechanism-the N-bilateral optimized combinatorial auction (N-BOCA). N-BOCA is a flexible iterative combinatorial auction model that offers more optimized trading for multiple suppliers and purchasers in the supply chain than one-sided combinatorial auction. We design the N-BOCA model from the perspectives of market architecture. trading rules, and decision strategy for winner determination, the decision strategy for winner determination needs flexible optimization modeling capability. Thus rule-based reasoning was applied tor reflecting the flexible decision strategies. We also show the viability of N-BOCA through Paired Samples T-test experimentation. It shows that N-BOCA yields higher purchase efficiency and effectiveness than the one-auctioned to multi-bidders (1-to-N) combinatorial auction mechanism. (c) 2007 Published by Elsevier Ltd.