A Lowest-expected-cost Project bidding Decision Method using FMEA Analysis

Ammad Tanveer, Chee-Cheng Chen


This paper studies risk elimination of risk in the current bid evaluation process, addressing the problem of frequent accidents and disadvantages of the popular “lowest-price” bid policy. Failure mode and effect analysis (FMEA), a systematic analysis technique successfully applied in electronic industries, is introduced. A FMEA-aided model for project bidding evaluation is developed through analyzing and applying FMEA factors and methods to project bidding. An actual case is used to prove the applicability and suitability of the proposed approach. The FMEA-aided model was applied to effectively support the lowest-expected-cost (LEC) bidding decision method beneficial for meeting project goals to reduce the risk of decision making.


Carbone, T.A. and Tippett, D.D., 2004. Project risk management using the project risk FMEA, Engineering Management Journal,vol. 16(4), 28-35.

Cassanelli, G., Mura, G., Fantini, F., Vanzi, M. and Plano, B., 2006. Failure analysis-assisted FMEA, Microelectronics Reliability, 46, 1795-1799.

Chapman, C., 2006. Key points of contention in framing assumptions for risk and uncertainty management, International Journal of Project Management, 26, 303-316.

Dias, A. and Ioannou, P., 1996. Company and project evaluation model for privately promoted infrastructure projects, Journal of Construction Engineering and Management, ASCE, 122(1), 71-82.

Hillson, D., 2001.2001. Extending the Risk Process to Manage Opportunities, PMI Europe, Berlin.

Ho, C. C. and Liao, C. J., 2011. The use of failure mode and effects analysis to construct an effective disposal and prevention mechanism for infectious hospital waste, Waste Management, in press.

Kaplan, S., Haimes, Y.Y. and Lambert, J. H., 2001. Fitting hierarchical holographic modelling into the theory of scenario structuring and a resulting refinement to the quantitative definition of risk, Risk Analysis, 21(5), 807-19.

Kumar, R. L., 2002. Managing risks in IT projects: anoptions perspective, Information and Management, 40(1), 63-74.

Murphy, M., Heaney, G., and Perera, S., 2011. A methodology for evaluating construction innovation constraints through project stakeholder competencies and

FMEA, Construction Innovation:Information, Process, Management, 11(4), 416-440.

Papadopoulos, Y., Walker, M., Parker, D., Rude, E., Hamann, R., Uhlig, A., Gratz, U. and Lien, R., 2011. Engineering failure analysis and design optimization with HIP-HOPS, Engineering Failure Analysis, 18, 590-608.

Segismundo, A. and Miguel, P. A. C., 2008. Failure mode and effects analysis (FMEA) in the context of rimanagement in new product development: a case study in an automotive company, International Journal of Quality and Reliability Management, 25(9), 899-912.

Shenhar, A. J., 2001. One size does not fit all projects: exploring classical contingency domins, Management Science, 47(3), 394-414.

Wang, M. and Chou, H., 2003. Risk allocation and risk handling of highway projects in Taiwan, Journal of Management in Engineering, ASCE, 19(2), 60-68.

Wang, W. C., Wang, H. H., Lai, Y. T. and Li, J. C. C., 2006. Unit-price-based model for evaluating competitive bids, International Journal of Project Management, 24, 156-166.

Zayed, T., Amer, M. and Pan, J., 2008. Assessing risk and uncertainty inherent in Chinese highway, International Journal of Project Management, 26, 408-419.

پاراگلایدر Full Text: PDF


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

ISSN : 2251-1555