Decision‐Support System for Modeling Bid/No‐Bid Decision Problem

Abstract

A structured methodology for modeling the bid/no‐bid decision problem is presented. The method is based on the techniques of decision analysis. The advantages of explicating the decision‐making process is emphasized in the paper. Explication of the process brings numerous advantages, including improved communication and documentation of the underlying technique and assumptions. Suggestions are made about how to explicate the decision‐making process. A procedure for quantifying the subjective evaluation and the aspiration level of a bidder is outlined. The model is based on a set of attributes obtained as a result of a questionnaire survey conducted among 400 of the top general contractors of the United States. It was assumed that these attributes are independent of each other, implying an additive model. The structured decision‐making process, as suggested, is suitable for implementation in a computerized decision‐support system. The method is demonstrated with the help of a hypothetical example.