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A Bidding Strategy Model Using Simulation Developed for the “Appropriate Tender Price System”

A Bidding Strategy Model Using Simulation Developed for the "Appropriate Tender Price System"


S ince 40 years, several bidding models are proposed for possible use by construction contractors to marinize the profit that could be expected as a result of submitting the low tonder price. These models are referred to as competitive bidding strategy models. All of these models have been adapted for winning the contract with the "lowest tender." In this paper, a bidding model is presented for the Turkish bidding system where the "appropriate tender" wins the job. This model is developed as a computer program using simulation technique in which the parameters that are likely to influence the results under different bidding conditions are investigated for 256 different situations.


Synopsis

It is assumed that when a contractor bids for a tender, his objective is to win the contract with a reasonable profit. Based on this assumption,, various researchers in America and Europe have developed probabilistic models that aim to predict the chance of winning with a certain mark-up...