A simplified unbalanced bidding model

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

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

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

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