Supporting project cost threshold decisions via a mathematical cost model

Wei-Chih Wang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

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.

Original languageEnglish
Pages (from-to)99-108
Number of pages10
JournalInternational Journal of Project Management
Volume22
Issue number2
DOIs
StatePublished - 1 Jan 2004

Keywords

  • Bidding
  • Cost threshold
  • Procurement
  • Utility theory

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