A project cost threshold must be determined in a relatively short time by a project owner as a reference for evaluating competitive bids. In practice, such a decision is mainly based on subjective experience. This work presents a novel systematic procedure for assessing a reasonable project cost threshold. The proposed procedure involves a utility-based multi-criteria evaluation model and a cost model. The multi-criteria evaluation model is applied to accurately reflect an owner's preferences in relation to the decision criteria, as the cost model is derived to generate a cumulative cost distribution to set boundaries on the cost threshold. The proposed cost model potentially saves the computer time and coding effort that required by a simulation-based model.
- Cost threshold
- Utility theory