Dozzi, S P; Abourizk, S M and Schroeder, S L (1996) Utility-theory model for bid markup decisions. Journal of Construction Engineering and Management, 122(2), pp. 119-124. ISSN 0733-9364
Abstract
A utility theory model, which is one of three generic methods for bid markup determination, is developed using 21 criteria in the bidding decision. The majority of the criteria are evaluated subjectively by a decision maker, and numerical quantification and evaluation is typically difficult for such criteria. Previous works of Saaty, Lifson and Shaifer, and Ahmad and Minkarah are used to develop a simplified approach using straight-line utility functions to resolve such difficulty. This bidding model accommodates the variation of different decision makers' attitude in the weighting of criteria, and thus the model can be customized to different preferences and bias of risk. Considering the subjectivity of the process, the writers consider the accuracy of this approach to be acceptable for the use of utility theory as one of the decision making tools that are available to assist the construction contractor in determination of bid(s) markup during bid preparation.
| Item Type: | Article |
|---|---|
| Index terms: | quantification, subjectivity, utility theory, accuracy, bias, variation, decision-making, preference, construction contractor, bid preparation, bidding |
| Subjects: | decision-making and reasoning, contractual condition, probability and distributions, professional development, decision analysis, measurement and scaling, economic theory, human factors and perception, practitioner, bidding |
| Topics: | Roles and Professions, Risk Management, Procurement, Information Management, Research Practice, Contract Administration |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here