A simplified unbalanced bidding model

David William Cattell, Paul Anthony Bowen, Ammar R. Kaka

    Research output: Contribution to journalArticle

    30 Citations (Scopus)

    Abstract

    Much research effort to date has focused on the development and use of bidding models in optimizing contractors' bid prices in competitive tendering environments. Unbalanced bidding models, in particular, have the objective of maximizing a project's prospective profits by using techniques of applying differentiated mark-ups to all of a project's items of work. It is shown here that these unbalanced bidding models have been unnecessarily complicated by incorporating consideration of a project's item costs. Bidding models can be significantly simplified by having the objective of maximizing a project's top-line revenue rather than maximizing bottom-line profit. A new model, incorporating all three standard effects of item price loading: namely, front-end loading, individual-rate loading, and back-end loading, is proposed that gives effect to determining the optimum pricing for a project's component items.

    Original languageEnglish
    Pages (from-to)1283-1290
    Number of pages8
    JournalConstruction Management and Economics
    Volume26
    Issue number12
    DOIs
    Publication statusPublished - 2008

    Keywords

    • Bidding
    • Competitive advantage
    • Cost modelling
    • Mark-up
    • Revenue

    Fingerprint Dive into the research topics of 'A simplified unbalanced bidding model'. Together they form a unique fingerprint.

  • Cite this