A strategy of knowledge elicitation for developing an integrated bidding/production management expert system for the precast industry

Abstract

Bidding and production decisions, including the estimation of optimal mark-up on price, represent major decision problems for companies formulating a successful business strategy. The objective of this research was to develop a strategy for developing an integrated bidding/production management expert system to assess the suitability of incoming enquiries for a particular company and suggests a ‘bid/no bid’ decision. If a decision to bid is taken then the expert system should provide advice on the optimal mark-up to maximise the chance of winning potential contracts. The system developed in this paper is composed of an information system, that integrates design, estimation and production planning, and a knowledge-base to provide abstracted information and advice to managers in charge of bidding. The information system analyses the records of previous contracts and presents managers with vital information that minimises the risk of poor decisions associated with bidding. The knowledge-base is composed of intelligent rules which were elicited from previous contract records and experienced managers in charge of bidding. They are designed to advise managers on two major issues: bid/no bid and estimation of optimal tender price. A number of factors that affect bidding strategies were identified from reviewing previous bidding methodologies and surveying eight major companies in the UK by means of semi-structured interviews.