Bid Price Strategy By Taking Into Account The Risk Factors In The Housing Development Project Of PT.PP. Lonsum At Muara Rupit, South Sumatra Province

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Bid Price Strategy by Taking into Account the Risk Factors in the Housing Development Project of PT.PP. Lonsum at Muara Rupit, South Sumatra Province

Introduction

The tender process is a crucial stage in the construction industry, where contractor companies compete to win projects by offering the most competitive bid price. In this era of globalization, contractors are required to have an effective offer strategy to determine the right price and obtain optimal profits. One approach used is the offer strategy model based on expected profit maximum, where the higher the proposed bid price, the less likely the contractor to become the lowest bidder. However, it is essential for contractors to optimize potential profit in order to offer competitive prices without sacrificing profits.

The Importance of Offer Strategy in the Tender Process

In the tender process, the offer strategy is a critical component that can make or break a contractor's chances of winning a project. The proposed bid price is not the only factor that determines the success of a tender; the ability of the contractor to calculate various existing risk factors also plays a significant role. By understanding the dynamics of the market and the right supply strategy, contractors can adapt to the existing situation, creating more competitive offers and increasing their chances of being accepted.

Theoretical Framework

This study aims to explore various offering strategy models based on expected profit maximum, with a focus on the tender of development projects carried out by PT.PP. Lonsum in Muara Rupit. The analyzed models include strategies from Friedman, Gates, and Ackoff & Sasieni. These models are designed to help contractors determine the optimal bid price and maximize their profits while minimizing risks.

Methodology

The study collected offering price data from various contractors who participated in the tender between 2005 and 2008. The data was then tested to determine which model produced the best mark-up and the lowest offer. The results showed that the Gates and Ackoff & Sasieni models produced larger mark-ups, while the Friedman model offered the lowest offer.

Results and Discussion

The results of this study indicate that the Gates and Ackoff & Sasieni models are more effective in producing larger mark-ups, while the Friedman model is more effective in offering the lowest offer. This suggests that contractors tend to try to optimize expected profit that can be obtained, rather than focusing on the lowest offer. The success of a tender not only depends on the proposed bid price but also on the ability of the contractor to calculate various existing risk factors.

Implications for Contractors

This study has several implications for contractors in Indonesia, particularly those involved in development projects. By implementing proven effective offering strategy models, contractors can increase their chances of winning tenders and ensuring the success of projects. In-depth analysis of the supply strategy will also provide valuable insights for better decision-making in the future.

Conclusion

In conclusion, this study highlights the importance of offer strategy in the tender process and the need for contractors to optimize potential profit in order to offer competitive prices without sacrificing profits. The results of this study suggest that contractors tend to try to optimize expected profit that can be obtained, rather than focusing on the lowest offer. By understanding the dynamics of the market and the right supply strategy, contractors can adapt to the existing situation, creating more competitive offers and increasing their chances of being accepted.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. Contractors should implement proven effective offering strategy models to increase their chances of winning tenders.
  2. Contractors should focus on optimizing potential profit in order to offer competitive prices without sacrificing profits.
  3. Contractors should conduct in-depth analysis of the supply strategy to provide valuable insights for better decision-making in the future.

Limitations of the Study

This study has several limitations, including:

  1. The study only analyzed data from contractors who participated in the tender between 2005 and 2008.
  2. The study only focused on the tender of development projects carried out by PT.PP. Lonsum in Muara Rupit.
  3. The study did not consider other factors that may affect the success of a tender, such as the contractor's reputation and experience.

Future Research Directions

Future research should focus on:

  1. Conducting a more comprehensive analysis of the supply strategy to provide valuable insights for better decision-making in the future.
  2. Considering other factors that may affect the success of a tender, such as the contractor's reputation and experience.
  3. Analyzing data from contractors who participated in tenders in different regions and industries.
    Q&A: Bid Price Strategy by Taking into Account the Risk Factors in the Housing Development Project of PT.PP. Lonsum at Muara Rupit, South Sumatra Province

Q: What is the importance of offer strategy in the tender process?

A: The offer strategy is a critical component in the tender process that can make or break a contractor's chances of winning a project. The proposed bid price is not the only factor that determines the success of a tender; the ability of the contractor to calculate various existing risk factors also plays a significant role.

Q: What are the different offering strategy models used in the study?

A: The study analyzed three offering strategy models: Friedman, Gates, and Ackoff & Sasieni. These models are designed to help contractors determine the optimal bid price and maximize their profits while minimizing risks.

Q: What were the results of the study?

A: The results of the study showed that the Gates and Ackoff & Sasieni models produced larger mark-ups, while the Friedman model offered the lowest offer. This suggests that contractors tend to try to optimize expected profit that can be obtained, rather than focusing on the lowest offer.

Q: What are the implications of the study for contractors?

A: The study has several implications for contractors in Indonesia, particularly those involved in development projects. By implementing proven effective offering strategy models, contractors can increase their chances of winning tenders and ensuring the success of projects. In-depth analysis of the supply strategy will also provide valuable insights for better decision-making in the future.

Q: What are the limitations of the study?

A: The study has several limitations, including:

  1. The study only analyzed data from contractors who participated in the tender between 2005 and 2008.
  2. The study only focused on the tender of development projects carried out by PT.PP. Lonsum in Muara Rupit.
  3. The study did not consider other factors that may affect the success of a tender, such as the contractor's reputation and experience.

Q: What are the future research directions?

A: Future research should focus on:

  1. Conducting a more comprehensive analysis of the supply strategy to provide valuable insights for better decision-making in the future.
  2. Considering other factors that may affect the success of a tender, such as the contractor's reputation and experience.
  3. Analyzing data from contractors who participated in tenders in different regions and industries.

Q: How can contractors apply the findings of the study to their own business?

A: Contractors can apply the findings of the study by:

  1. Implementing proven effective offering strategy models to increase their chances of winning tenders.
  2. Focusing on optimizing potential profit in order to offer competitive prices without sacrificing profits.
  3. Conducting in-depth analysis of the supply strategy to provide valuable insights for better decision-making in the future.

Q: What are the benefits of using a bid price strategy that takes into account risk factors?

A: The benefits of using a bid price strategy that takes into account risk factors include:

  1. Increased chances of winning tenders.
  2. Improved profitability.
  3. Better decision-making.

Q: How can contractors mitigate the risks associated with tendering?

A: Contractors can mitigate the risks associated with tendering by:

  1. Conducting thorough risk assessments.
  2. Developing contingency plans.
  3. Building strong relationships with clients and stakeholders.

Q: What are the key takeaways from the study?

A: The key takeaways from the study are:

  1. The importance of offer strategy in the tender process.
  2. The need for contractors to optimize potential profit in order to offer competitive prices without sacrificing profits.
  3. The benefits of using a bid price strategy that takes into account risk factors.