A dynamic scheduling problem in cost estimation process of EPC projects

The cost estimation process, carried out by the contractor before the start of a project, is a critical activity for the contractor in accepting profitable EPC projects in competitive bidding situations. Thus, the contractor should devote significant time and resources to the accurate cost estimation of project orders from clients. However, it is impossible for any contractor to devote enough time and resources to all the orders because such resources are usually limited. For this reason, the contractor must dynamically decide bid or no-bid on the orders at each order arrival, and allocate the limited resources to the chosen orders. To maximize the contractor's profits, this study devises a heuristic scheduling method for dynamically selecting orders and allocating the limited resources to them, on the basis of the resource requirement of the order, the contractor's resource utilization, and the expected profit from the order. The effectiveness of our method is demonstrated through simulation experiments using a project cost estimation process model.