A factor-based probabilistic cost model to support bid-price estimation

Wei-Chih Wang*, Shih Hsu Wang, Yu Kun Tsui, Ching Hsiang Hsu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

12 Scopus citations


An appropriate bid price is essential for winning a construction project contract. However, making an accurate cost estimate is both time-consuming and expensive. Thus, a method that does not take much time and can approximate a proper bid price can help a contractor in making bid-price decisions when the available bid-estimation time is insufficient. Such a method can also generate a target cost and provide a cross-check for their bid prices that were estimated using a detailed process. This study proposes a novel model for quickly making a bid-price estimation that integrates a probabilistic cost sub-model and a multi-factor evaluation sub-model. The cost sub-model, which is simulation-based, focuses on the cost divisions to save estimation time. At the same time, the multi-factor evaluation sub-model captures the specific factors affecting the cost of each cost division. The advantages of the proposed model are demonstrated by its application to three residential housing projects located in northern Taiwan. The steps for applying this model to other contractors are also provided.

Original languageEnglish
Pages (from-to)5358-5366
Number of pages9
JournalExpert Systems with Applications
Issue number5
StatePublished - 1 Apr 2012


  • Bidding
  • Cost division
  • Factors
  • Probabilistic cost
  • Residential housing project
  • Simulation


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