Bidding strategy to support decision-making by integrating fuzzy AHP and regression-based simulation

This study proposes a new bidding strategy to support decision-making that is based on a combined framework of the Fuzzy Analytical Hierarchy Process (FAHP) and regression-based simulation. First, the FAHP method integrates the AHP with fuzzy set theory to determine the weights of factors that influence the cost of a project. Second, the integration of the cumulative distribution functions that are generated by the Monte Carlo simulation with a regression model yields bid amounts that correspond to various confidence levels. The proposed approach is used to analyze data on bridge construction projects that are taken from a database of the Taiwan Public Construction Commission. The systematic bid assessment model and the cost-probability curve can be used as strategic tools for quantifying project risks and calculating bids for construction projects. (C) 2013 Elsevier B.V. All rights reserved.