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Uncertainty perception in bidding for Product-Service Systems under competition

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journal contribution
posted on 18.11.2016, 11:27 by Melanie E. Kreye, Yee GohYee Goh, Linda B. Newnes
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.

History

School

  • Mechanical, Electrical and Manufacturing Engineering

Published in

Journal of Purchasing and Supply Management

Volume

24

Issue

1

Pages

31-40

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.

Publisher

© Elsevier

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Acceptance date

19/10/2017

Publication date

2017-11-20

Notes

This paper was accepted for publication in the journal Journal of Purchasing and Supply Management and the definitive published version is available at https://doi.org/10.1016/j.pursup.2017.10.003.

ISSN

1478-4092

Language

en