Project Bidding under Chance Time Estimates.
Abstract
The bidding for the contract of a project is a very important phase in the life of the project. In today's competitive market for a project contract, it is essential to have accurate information in order to make a bid that will yield a profit and still win the contract. This thesis examines projects that can be modeled by directed acyclic networks under probabilistic activity durations and costs (the PERT model). For a successful bid, the contractor must recognize that there are two streams of cash flow: an outflow caused by the undertaking of the activities of the project, and an inflow due to income received at the time of realization of pre-designated key events. Under the PERT model of activity networks, both streams of cash flow are subject to uncertainty. The contractor's problem then becomes that of the estimation of these two streams at sufficient confidence to realize a reasonable profit for him. A Monte Carlo simulation is developed for solution of the problem, and a computer package has been constructed to assist project managers in the determination of the bid package. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1986
- Accession Number
- ADA176909
Entities
People
- Russell S. Vogtmann
Organizations
- Air Force Institute of Technology