Unevenly Distributed Markup in Cash Flow Modeling with Singularity Functions
Yi Su, Gunnar Lucko · Construction Research Congress 2014 · 2014
Contractors may apply unevenly distributed markups to implement unbalanced bidding strategies, including, for example, front-end loading. However, these strategies make a cash flow model more complex than the balanced situation and make it cumbersome to search for an optimum strategy when varying the rate and distribution of said markup. This paper explores markup functions in cash flow modeling that utilize singularity functions for various unbalanced bidding scenarios. By considering the constraint that the total price of the unbalanced and balanced bids should be equal, the model complies with the rule of awarding contracts to the low bidder. This new cash flow model is constructive in two ways. First, different types of unevenly distributed markup functions are defined, and input parameters of those distributions can bemodified conveniently to facilitate the optimization process. Second, the model incorporates shifts of activity starts and finishes, which allows integrating it with scheduling toward multiple objective optimization.