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Simulation and Modeling Methodologies, Technologies and Applications pp 101–118Cite as

A Heuristic Bidding Price Decision Algorithm Based on Cost Estimation Accuracy Under Limited Engineering Man-Hours in EPC Projects

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Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 319))

Abstract

In this paper, we develop a heuristic bidding price decision algorithm in consideration of cost estimation accuracy under limited engineering Man-Hours (MH) in Engineering, Procurement, Construction (EPC) projects. It allocates engineering MH for cost estimation, which determines the cost estimation accuracy, to each order under the limited volume of MH, and then determines the bidding price for maximizing the expected profit based on cost estimation accuracy under the deficit order probability constraint. Numerical examples show that the bidding price decision in consideration of cost estimation accuracy and deficit order probability is essential for the contractor in making a stable profit in EPC projects, and that the developed algorithm is effective for making such bidding price decision.

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Author information

Authors and Affiliations

  1. Faculty of Information and Communications, Bunkyo University, Kanagawa, Japan

    Nobuaki Ishii

  2. School of Network and Information, Senshu University, Kanagawa, Japan

    Yuichi Takano

  3. Graduate School of Decision Science and Technology, Tokyo Institute of Technology, Tokyo, Japan

    Masaaki Muraki

Authors
  1. Nobuaki Ishii
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  2. Yuichi Takano
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  3. Masaaki Muraki
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Corresponding author

Correspondence to Nobuaki Ishii .

Editor information

Editors and Affiliations

  1. Department of Computer Science, Monmouth University, West Long Branch, New Jersey, USA

    Mohammad S. Obaidat

  2. School of Science and Engineering, Reykjavik University, Reykjavik, Iceland

    Slawomir Koziel

  3. Systems Research Institute, Polish Academy of Sciences, Warsaw, Poland

    Janusz Kacprzyk

  4. School of Science and Engineering, Reykjavik University, Reykjavik, Iceland

    Leifur Leifsson

  5. Faculty of Engineering, University of Ottawa, Ottawa, Ontario, Canada

    Tuncer Ören

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© 2015 Springer International Publishing Switzerland

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Ishii, N., Takano, Y., Muraki, M. (2015). A Heuristic Bidding Price Decision Algorithm Based on Cost Estimation Accuracy Under Limited Engineering Man-Hours in EPC Projects. In: Obaidat, M., Koziel, S., Kacprzyk, J., Leifsson, L., Ören, T. (eds) Simulation and Modeling Methodologies, Technologies and Applications. Advances in Intelligent Systems and Computing, vol 319. Springer, Cham. https://doi.org/10.1007/978-3-319-11457-6_7

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  • DOI: https://doi.org/10.1007/978-3-319-11457-6_7

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-11456-9

  • Online ISBN: 978-3-319-11457-6

  • eBook Packages: EngineeringEngineering (R0)

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