The process of decision-making in public procurement of construction projects during the preparation and implementation phases ought to be supported by risk identification, assessment, and management. In risk assessment one has to take into account factors that lead to risk events (background info), as well as the information about the risk symptoms (monitoring info). Typically once the risks have been assessed a decision-maker...

The authors are concerned with a bidding problem. There are two companies (P1 and P2) bidding for a highway construction project. In order to be more competitive, P1 considers buying a new gravel pit near the construction site. The basic cost of the pit is known to both companies. However, there is also an additional, hidden, cost (C) known only to P1. P2 is uncertain whether the hidden cost is C = 0 or C = x. P1 plans to bid for...

The decision making process, in general, is understood as a process of selecting one of the available solutions to the problem. One of possible approaches supporting the process is Bayesian statistical decision theory providing a mathematical model to make decisions of a technical nature in conditions of uncertainty. Regarding above, a detailed subject of the research is to analyze the value of the observation, which is a part...