Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia

Candra Yuliana; Retna Hapsari Kartadipura; Syahril Taufik

doi:doi:10.11648/j.jccee.20160101.12

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Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia

Candra Yuliana, Retna Hapsari Kartadipura, Syahril Taufik

Published in Journal of Civil, Construction and Environmental Engineering (Volume 1, Issue 1)

Received: 17 October 2016 Accepted: 28 October 2016 Published: 19 November 2016

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Abstract

Determining a good price in competitive bidding is a common problem for the construction company. An offer price could be too high for contractors hoping to get a big profit with no risk to get the project, or too low in the hope of getting a lot of projects but at the risk of losing opportunity to get benefits and risks of failure in carrying out the work.Friedman model was selected for bidding strategy purpose. The model was applied to a number of data offering price of contractors bidding for the construction of buildings in the city Banjarbaru starting in 2012-2015, which has Owners’s estimate with a range between IDR 248 million to IDR 4.8 billion. Then the test data results with the data that has been set aside for testing the model.Friedman bidding strategy models produced Mark-Up valued at -9% for multi normal distributions and -5% for a single normal distribution. Mark-Up is validated on the winning bidder of IDR 478,590.00. The tests produced the offering price of IDR 478,560,210.00 (with Mark Up -8.84%) and IDR 498,726,250.00 (with Mark Up -5%). So Friedman models with Multi Normal Distribution can beat the lowest bid.

Published in	Journal of Civil, Construction and Environmental Engineering (Volume 1, Issue 1)
DOI	10.11648/j.jccee.20160101.12
Page(s)	12-17
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Procurement, Bidding Strategy, Normal Distribution, Friedman, Mark Up

References

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[2]	Kim, H. and K. Reinschmidt: (2006), ‘A Dynamic Competition Model for ConstructionContractors’ Construction Management and Economics Vol. 24, No. 9, 955–965.
[3]	Friedman, L. (1956). A Competitive Bidding Strategy. Operation Research, 82(4), 104-112.
[4]	Guo P. J., Wei D. W., & Jin A. (2012). Optimal Price Decision of Bidding Based on Prospect Theory. Journal of WUT (Information Management Engineering), 34(3), 353-356.
[5]	Hong B. L., & Yi L. (2010). Fare Prediction Project Biding Risk Based on BP Neural Network. China Market, (45), 575- 585. Pei, L. D., & Jian, X. Y. (2011).
[6]	Manns A. K. & AL-Haimus K. M. (2000). Hstimating Using Cost Significant Global Models. Construction Management and Hconomics, (18), 575-585.
[7]	Patmadjaja H. (1999). Strategical Bidding Model. Civil Engineering Journal. Civil Engineering Dimension, Vol. 1 No 2.
[8]	Tan, Y., L. Shen, W. Lu, and Q. Shen: (2009), ‘Multiple-Objective Bidding Strategy Using Goal Programming Technique’. Management Decision Vol. 46, No. 4, 666–672.
[9]	Tenah, K. and C. Coulter: (1999), ‘Bid Mark-Up Metodologies’. Cost Engineering Vol. 41, No. 11, 39–44.
[10]	Yang X. and Xue H. (2013) Research on Bidding Methods of National Grid Construction Projects Based on Friedman Model, International Business & Management Vol. 6, No. 2,pp. 98-104.
[11]	Yong H. Y., Zhi H. X., Mi Y. S., Su Y. L. (2006). The AHP Based Model on Bidding Strategy Decision Making for BOT Projects. Journal of Wuhan University of Technology, 28(9), 135-137.
[12]	Wallwork, J.: (1999), ‘Is There a Right Price in Construction Bids?’. Cost Engineering Vol. 40, No. 2, 41–43.

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APA Style

Candra Yuliana, Retna Hapsari Kartadipura, Syahril Taufik. (2016). Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. Journal of Civil, Construction and Environmental Engineering, 1(1), 12-17. https://doi.org/10.11648/j.jccee.20160101.12

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ACS Style

Candra Yuliana; Retna Hapsari Kartadipura; Syahril Taufik. Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. J. Civ. Constr. Environ. Eng. 2016, 1(1), 12-17. doi: 10.11648/j.jccee.20160101.12

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AMA Style

Candra Yuliana, Retna Hapsari Kartadipura, Syahril Taufik. Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. J Civ Constr Environ Eng. 2016;1(1):12-17. doi: 10.11648/j.jccee.20160101.12

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@article{10.11648/j.jccee.20160101.12,
  author = {Candra Yuliana and Retna Hapsari Kartadipura and Syahril Taufik},
  title = {Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia},
  journal = {Journal of Civil, Construction and Environmental Engineering},
  volume = {1},
  number = {1},
  pages = {12-17},
  doi = {10.11648/j.jccee.20160101.12},
  url = {https://doi.org/10.11648/j.jccee.20160101.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jccee.20160101.12},
  abstract = {Determining a good price in competitive bidding is a common problem for the construction company. An offer price could be too high for contractors hoping to get a big profit with no risk to get the project, or too low in the hope of getting a lot of projects but at the risk of losing opportunity to get benefits and risks of failure in carrying out the work.Friedman model was selected for bidding strategy purpose. The model was applied to a number of data offering price of contractors bidding for the construction of buildings in the city Banjarbaru starting in 2012-2015, which has Owners’s estimate with a range between IDR 248 million to IDR 4.8 billion. Then the test data results with the data that has been set aside for testing the model.Friedman bidding strategy models produced Mark-Up valued at -9% for multi normal distributions and -5% for a single normal distribution. Mark-Up is validated on the winning bidder of IDR 478,590.00. The tests produced the offering price of IDR 478,560,210.00 (with Mark Up -8.84%) and IDR 498,726,250.00 (with Mark Up -5%). So Friedman models with Multi Normal Distribution can beat the lowest bid.},
 year = {2016}
}

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TY  - JOUR
T1  - Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia
AU  - Candra Yuliana
AU  - Retna Hapsari Kartadipura
AU  - Syahril Taufik
Y1  - 2016/11/19
PY  - 2016
N1  - https://doi.org/10.11648/j.jccee.20160101.12
DO  - 10.11648/j.jccee.20160101.12
T2  - Journal of Civil, Construction and Environmental Engineering
JF  - Journal of Civil, Construction and Environmental Engineering
JO  - Journal of Civil, Construction and Environmental Engineering
SP  - 12
EP  - 17
PB  - Science Publishing Group
SN  - 2637-3890
UR  - https://doi.org/10.11648/j.jccee.20160101.12
AB  - Determining a good price in competitive bidding is a common problem for the construction company. An offer price could be too high for contractors hoping to get a big profit with no risk to get the project, or too low in the hope of getting a lot of projects but at the risk of losing opportunity to get benefits and risks of failure in carrying out the work.Friedman model was selected for bidding strategy purpose. The model was applied to a number of data offering price of contractors bidding for the construction of buildings in the city Banjarbaru starting in 2012-2015, which has Owners’s estimate with a range between IDR 248 million to IDR 4.8 billion. Then the test data results with the data that has been set aside for testing the model.Friedman bidding strategy models produced Mark-Up valued at -9% for multi normal distributions and -5% for a single normal distribution. Mark-Up is validated on the winning bidder of IDR 478,590.00. The tests produced the offering price of IDR 478,560,210.00 (with Mark Up -8.84%) and IDR 498,726,250.00 (with Mark Up -5%). So Friedman models with Multi Normal Distribution can beat the lowest bid.
VL  - 1
IS  - 1
ER  -

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Author Information

Candra Yuliana

Civil Engineering Department, Lambung Mangkurat University, Banjarbaru, Indonesia
Retna Hapsari Kartadipura

Civil Engineering Department, Lambung Mangkurat University, Banjarbaru, Indonesia
Syahril Taufik

Civil Engineering Department, Lambung Mangkurat University, Banjarbaru, Indonesia

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Plain Text BibTeX RIS

APA Style

Candra Yuliana, Retna Hapsari Kartadipura, Syahril Taufik. (2016). Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. Journal of Civil, Construction and Environmental Engineering, 1(1), 12-17. https://doi.org/10.11648/j.jccee.20160101.12

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ACS Style

Candra Yuliana; Retna Hapsari Kartadipura; Syahril Taufik. Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. J. Civ. Constr. Environ. Eng. 2016, 1(1), 12-17. doi: 10.11648/j.jccee.20160101.12

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AMA Style

Candra Yuliana, Retna Hapsari Kartadipura, Syahril Taufik. Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia. J Civ Constr Environ Eng. 2016;1(1):12-17. doi: 10.11648/j.jccee.20160101.12

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@article{10.11648/j.jccee.20160101.12,
  author = {Candra Yuliana and Retna Hapsari Kartadipura and Syahril Taufik},
  title = {Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia},
  journal = {Journal of Civil, Construction and Environmental Engineering},
  volume = {1},
  number = {1},
  pages = {12-17},
  doi = {10.11648/j.jccee.20160101.12},
  url = {https://doi.org/10.11648/j.jccee.20160101.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jccee.20160101.12},
  abstract = {Determining a good price in competitive bidding is a common problem for the construction company. An offer price could be too high for contractors hoping to get a big profit with no risk to get the project, or too low in the hope of getting a lot of projects but at the risk of losing opportunity to get benefits and risks of failure in carrying out the work.Friedman model was selected for bidding strategy purpose. The model was applied to a number of data offering price of contractors bidding for the construction of buildings in the city Banjarbaru starting in 2012-2015, which has Owners’s estimate with a range between IDR 248 million to IDR 4.8 billion. Then the test data results with the data that has been set aside for testing the model.Friedman bidding strategy models produced Mark-Up valued at -9% for multi normal distributions and -5% for a single normal distribution. Mark-Up is validated on the winning bidder of IDR 478,590.00. The tests produced the offering price of IDR 478,560,210.00 (with Mark Up -8.84%) and IDR 498,726,250.00 (with Mark Up -5%). So Friedman models with Multi Normal Distribution can beat the lowest bid.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Bidding Strategy Using Friedman Model for Building Construction Project in Banjarbaru Indonesia
AU  - Candra Yuliana
AU  - Retna Hapsari Kartadipura
AU  - Syahril Taufik
Y1  - 2016/11/19
PY  - 2016
N1  - https://doi.org/10.11648/j.jccee.20160101.12
DO  - 10.11648/j.jccee.20160101.12
T2  - Journal of Civil, Construction and Environmental Engineering
JF  - Journal of Civil, Construction and Environmental Engineering
JO  - Journal of Civil, Construction and Environmental Engineering
SP  - 12
EP  - 17
PB  - Science Publishing Group
SN  - 2637-3890
UR  - https://doi.org/10.11648/j.jccee.20160101.12
AB  - Determining a good price in competitive bidding is a common problem for the construction company. An offer price could be too high for contractors hoping to get a big profit with no risk to get the project, or too low in the hope of getting a lot of projects but at the risk of losing opportunity to get benefits and risks of failure in carrying out the work.Friedman model was selected for bidding strategy purpose. The model was applied to a number of data offering price of contractors bidding for the construction of buildings in the city Banjarbaru starting in 2012-2015, which has Owners’s estimate with a range between IDR 248 million to IDR 4.8 billion. Then the test data results with the data that has been set aside for testing the model.Friedman bidding strategy models produced Mark-Up valued at -9% for multi normal distributions and -5% for a single normal distribution. Mark-Up is validated on the winning bidder of IDR 478,590.00. The tests produced the offering price of IDR 478,560,210.00 (with Mark Up -8.84%) and IDR 498,726,250.00 (with Mark Up -5%). So Friedman models with Multi Normal Distribution can beat the lowest bid.
VL  - 1
IS  - 1
ER  -

Copy | Download