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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/23202

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.
Keywords: Uncertainty
Competitive bidding
Decision making
Service contracts
Issue Date: 2018
Publisher: Elsevier
Citation: KREYE, M.E., GOH, Y.M. and NEWNES, L.B., 2018. Uncertainty perception in bidding for Product-Service Systems under competition. Journal of Purchasing and Supply Management, 24 (1), pp. 31-40.
Abstract: This research investigates what impact of uncertainty perception arising from 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 experimental study with industrial costing and bidding experts from the defence and aerospace sector. 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 20 May 2019
Version: Accepted for publication
URI: https://dspace.lboro.ac.uk/2134/23202
Publisher Link: https://doi.org/10.1016/j.pursup.2017.10.003
ISSN: 1478-4092
Appears in Collections:Closed Access (Mechanical, Electrical and Manufacturing Engineering)

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