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|Title: ||Uncertainty in bidding for product-service systems: the influence of competition on decision making|
|Authors: ||Kreye, Melanie E.|
Goh, Yee M.
Newnes, Linda B.
|Issue Date: ||2016|
|Citation: ||KREYE, M.E., GOH, Y.M. and NEWNES, L.B., 2016. Uncertainty in bidding for product-service systems: the influence of competition on decision making. Journal of Purchasing and Supply Management, In Press.|
|Abstract: ||This research investigates what impact the existence of competition has on the pricing decision for Product-Service Systems (PSS) under uncertainty. PSS provision is an increasingly important area for many businesses and competition increases cognitive pressures on providers even further. We present an empirical study with industrial experts from the defence and aerospace sector, in cost estimation and bidding. The study consisted of an experimental set-up via two questionnaires which differed in the existence of competition in the bidding scenario. The findings showed that bidding decision makers changed their evaluation of the cost estimate due to the introduction of competition but kept their evaluations of the profit margin and price bids constant. Furthermore, the participants listed the relevant sources of uncertainty that influenced their decision-making process. This research contributes to the literature in two ways. First, our findings showed that predictions from current theory regarding
decision-making of cost estimation and pricing are not confirmed when competitively bidding for PSS. Second, we show uncertainty sources that influenced the decision makers and identified p the importance of internal
processes of the PSS provider and environmental uncertainty.|
|Description: ||This paper is embargoed until eighteen months after publication.|
|Version: ||Accepted for publication|
|Publisher Link: ||http://www.sciencedirect.com/science/journal/14784092|
|Appears in Collections:||Closed Access (Mechanical, Electrical and Manufacturing Engineering)|
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