Integration of simulation-based cost model and multi-criteria evaluation model for bid price decisions

Wei-Chih Wang*, Ren-Jye Dzeng, Yu Huang Lu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

32 Scopus citations

Abstract

Several criteria affect bidding decisions. Current bidding models determine a markup based on a fixed project construction cost. This work presents a novel bid price determination procedure that is built by integrating a simulation-based cost model and a multi-criteria evaluation model. The cost model is used to consider cost uncertainties and generate a bid price cumulative distribution, whereas the multi-criteria evaluation model applies pairwise comparisons and fuzzy integrals to reflect bidder preferences regarding decision criteria. The relationship between the two models is based on a practical phenomenon in that a bidder has a high probability of winning when criteria evaluations favor his bid, and, consequently, the bidder would bid a low price, and vice versa. The merits of the proposed procedure are demonstrated by its application to two construction projects in Taiwan.

Original languageEnglish
Pages (from-to)223-235
Number of pages13
JournalComputer-Aided Civil and Infrastructure Engineering
Volume22
Issue number3
DOIs
StatePublished - 1 Apr 2007

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