Safety interval analysis: A risk-based approach to specify low-risk quantities of uncertainties for contractor's bid proposals

  • Authors:
  • K. Rezaie;A. Gereie;B. Ostadi;M. Shakhseniaee

  • Affiliations:
  • Department of Industrial Engineering, Faculty of Engineering, University of Tehran, P.O. Box 11365/4563, Tehran, Iran;Department of Industrial Engineering, Faculty of Engineering, University of Tehran, P.O. Box 11365/4563, Tehran, Iran;Department of Industrial Engineering, Faculty of Engineering, Tarbiat Modares University, Tehran, Iran;Department of Industrial Engineering, Faculty of Engineering, University of Tehran, P.O. Box 11365/4563, Tehran, Iran

  • Venue:
  • Computers and Industrial Engineering
  • Year:
  • 2009

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Abstract

By appearing more complex projects, Design-Bid-Build (DBB) contracts could not satisfy new projects requirements and a need to new types of contracts was felt. New contracts requirements differ from previous ones. Challenging the method of proposal offering in design-construct contracts, this paper seeks solutions for more rational proposing of project uncertainties. The problem commences with the question ''which duration and price a contractor must propose in a project with design-construct contract?'' A part of the answer to this question is the matter of the lowest-risk limit of uncertainties which result from output of Monte Carlo Simulation and its analysis. The output of this analysis is a series of intervals named ''safety Intervals'' which will be contractors' guide in offering the bid proposal.