Bid Markup Decision and Resource Allocation for Cost Estimation in Competitive Bidding
Yuichi Takano (ytakanoisc.senshu-u.ac.jp)
Abstract: To receive a project contract through competitive bidding, contractors submit a bid price determined by putting a markup on the estimated project cost. Since a bid is inevitably affected by an inaccurate cost estimate, sufficient resources should be allocated to cost estimation. This paper develops a novel optimization model for determining the bid markup and the resource allocation for cost estimation simultaneously. We derive optimality conditions based on some assumptions, and we report computational results demonstrating the effectiveness of our model.
Keywords: Bidding, Optimization, Resource management, Project management
Category 1: Applications -- OR and Management Sciences
Citation: Takano, Y., Ishii, N., & Muraki, M. (in press). Determining Bid Markup and Resources Allocated to Cost Estimation in Competitive Bidding. Automation in Construction.
Entry Submitted: 03/27/2016
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