Work

Unit Price Contracts: A Practical Framework For Determining Competitive Bid Prices

Year: 2011

Type: article

Abstract: A general analytical framework within which to solve the competitive bidding problem is developed by considering a unit price contract. By viewing the problem in the standard capital budgeting framework and exploiting the linearity of the firms objective function and constraints, the problem can be formulated as a standard linear programming (LP) application whose solution is the optimal bid. We also investigate a so-called unbalanced bidding strategy as an effective way for bidding firms to hedge the risk, or uncertainty, inherent in may unit price contracts.

Source: Journal of Applied Business Research (JABR)

DOI: 10.19030/jabr.v14i3.5704

Authors: John E. Burnett, Bruce M. Wampler

Institutions: University of Alabama in Huntsville, University of Louisiana at Monroe

Language: English

Topic: Capital Investment and Risk Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: bronze

OpenAlex ID: W2183582811

FWCI: 0.593

Cites:

Cited by: 24

Related to: 10