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Full-Text Articles in Architecture
An Overview Of Component Unit Pricing Theory, David Cattell
An Overview Of Component Unit Pricing Theory, David Cattell
David Cattell
Component unit pricing (CUP) theory presents a fresh approach to item pricing, described as the process of distributing the overall price among its constituent component items. This theory provides explanation and proof that different distributions of mark-up among the items of a project produce different levels of reward for contractors, while exposing them to different degrees of risk. The theory describes the three identified sources of these rewards, namely those of improved cash flow, escalation in compensation and valuations of likely variations. In addition, it also provides the first explanation of the three risks involved, namely the risk of ‘rejection’, …
A Simplified Unbalanced Bidding Model, David William Cattell, Paul Anthony Bowen, Ammar P. Kaka
A Simplified Unbalanced Bidding Model, David William Cattell, Paul Anthony Bowen, Ammar P. Kaka
David Cattell
Much research effort to date has focused on the development and use of bidding models in optimizing contractors' bid prices in competitive tendering environments. Unbalanced bidding models, in particular, have the objective of maximizing a project's prospective profits by using techniques of applying differentiated mark-ups to all of a project's items of work. It is shown here that these unbalanced bidding models have been unnecessarily complicated by incorporating consideration of a project's item costs. Bidding models can be significantly simplified by having the objective of maximizing a project's top-line revenue rather than maximizing bottom-line profit. A new model, incorporating all …
Review Of Unbalanced Bidding Models In Construction, David W. Cattell, Paul A. Bowen, Ammar P. Kaka
Review Of Unbalanced Bidding Models In Construction, David W. Cattell, Paul A. Bowen, Ammar P. Kaka
David Cattell
Unbalanced bidding describes an activity otherwise known as item price loading. It is a practice used to some extent by building contractors to determine the prices that they will allocate to the individual component items within a project. This practice takes advantage of the contractor’s opportunity to manipulate these prices without this affecting their overall bid price for a project. Three types of loading are described, namely those of “front-end loading”, “back-end loading”, and “quantity error exploitation” (otherwise known as “individual rate loading”). Several scientists have expressed an interest in this field, starting with Marvin Gates in 1959. All of …
A Model To Distribute Mark-Up Amongst Quotation Component Items: An Outline, David Cattell, Paul A. Bowen, Ammar P. Kaka
A Model To Distribute Mark-Up Amongst Quotation Component Items: An Outline, David Cattell, Paul A. Bowen, Ammar P. Kaka
David Cattell
The outline of a proposed new unbalanced bidding model is discussed. Background is provided as regards the role of item price loading, otherwise known as unbalanced bidding. Three types of loading are described, namely those of ‘front-end loading’, ‘back-end loading’ and ‘quantity error exploitation’ (otherwise known as ‘individual rate loading’). It is proposed that one single mathematical model could embrace all three of the above types and that the aspect of risk may be addressed partially by means of using the quadratic programming techniques employed within the field of Modern Portfolio Theory. MPT is a field pioneered by Markowitz in …
Item Price Loading, David W. Cattell
Item Price Loading, David W. Cattell
David Cattell
Item Pricing is described as the process of allocating prices to the component items of a construction project. The effects of these item prices on the financial performance of a contract are discussed and a new model presented that attempts to maximise a project’s return for a given risk. This model is an application of Modern Portfolio Theory, an approach used in theoretical investment finance. It is suggested that Item Pricing could become a major strategy for building contractors, and that by implementing this model it is possible to considerably improve profits.