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Engineering Management in Production and Services

Tytuł artykułu

Modelling contractor’s bidding decision

Autorzy Biruk, S.  Jaśkowski, P.  Czarnigowska, A. 
Treść / Zawartość
Warianty tytułu
Języki publikacji EN
EN The authors aim to provide a set of tools to facilitate the main stages of the competitive bidding process for construction contractors. These involve 1) deciding whether to bid, 2) calculating the total price, and 3) breaking down the total price into the items of the bill of quantities or the schedule of payments to optimise contractor cash flows. To define factors that affect the decision to bid, the authors rely upon literature on the subject and put forward that multi-criteria methods are applied to calculate a single measure of contract attractiveness (utility value). An attractive contract implies that the contractor is likely to offer a lower price to increase chances of winning the competition. The total bid price is thus to be interpolated between the lowest acceptable and the highest justifiable price based on the contract attractiveness. With the total bid price established, the next step is to split it between the items of the schedule of payments. A linear programming model is proposed for this purpose. The application of the models is illustrated with a numerical example. The model produces an economically justified bid price together with its breakdown, maintaining the logical proportion between unit prices of particular items of the schedule of payment. Contrary to most methods presented in the literature, the method does not focus on the trade-off between probability of winning and the price but is solely devoted to defining the most reasonable price under project-specific circumstances. The approach proposed in the paper promotes a systematic approach to real-life bidding problems. It integrates practices observed in operation of construction enterprises and uses directly available input. It may facilitate establishing the contractor’s in-house procedures and managerial decision support systems for the pricing process.
Słowa kluczowe
PL wspomaganie decyzji   polityka cenowa   przepływy pieniężne   programowanie liniowe  
EN decision support   decision to bid   pricing strategy   contractor cash flows   linear programming  
Wydawca Oficyna Wydawnicza Politechniki Białostockiej
Czasopismo Engineering Management in Production and Services
Rocznik 2017
Tom Vol. 9, no. 1
Strony 64--73
Opis fizyczny Bibliogr. 37 poz., rys., tab.
autor Biruk, S.
  • Lublin University of Technology, Faculty of Civil Engineering and Architecture, Department of Construction Methods and Management, Poland,
autor Jaśkowski, P.
  • Lublin University of Technology, Faculty of Civil Engineering and Architecture, Department of Construction Methods and Management, Poland,
autor Czarnigowska, A.
  • Lublin University of Technology, Faculty of Civil Engineering and Architecture, Dpt. of Construction Methods and Management, Poland,
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Opracowanie ze środków MNiSW w ramach umowy 812/P-DUN/2016 na działalność upowszechniającą naukę (zadania 2017).
Kolekcja BazTech
Identyfikator YADDA bwmeta1.element.baztech-a8fe8ef1-96de-4dc4-b30c-8b762419fce0
DOI 10.1515/jem-2017-0007