Uncertainty in competitive bidding: A framework for product-service systems

Melanie E. Kreye, Linda B. Newnes, Yee-Mey Goh

Research output: Contribution to journalArticlepeer-review

25 Citations (Scopus)
189 Downloads (Pure)

Abstract

Owing to servitisation, manufacturing companies are increasingly required to compete through the provision of services around their products. The contracts for these services are often allocated through competitive bidding where the potential suppliers submit a price bid to the customer. The pricing decision is influenced by various uncertainties. This article proposes a conceptual framework depicting these influencing uncertainties on the bidding strategy. This framework is based on three empirical studies with industry investigating different viewpoints on the decision-making process. The intention is to support the pricing decision when competitively bidding for a service contract. The framework can be applied to specific competitive bidding situations to identify the influencing uncertainties, model them and depict their influences on the pricing decision.
Original languageEnglish
Pages (from-to)462-477
Number of pages16
JournalProduction Planning and Control
Volume25
Issue number6
Early online date1 Aug 2012
DOIs
Publication statusPublished - 1 Apr 2014

Keywords

  • Uncertainty
  • bidding strategy
  • competitive bidding
  • pricing
  • Decision making

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