Time-cost trade-off problem in construction supply chain: A bi-level programming decision model

A time-cost trade-off problem to optimize net revenue is considered in this paper to discuss the impact of an incentive plan combined with a lump sum contract on the determination of a project´s optimal duration. A bi-level programming decision model is proposed in the viewpoint of the client to discuss the optimal selection of the revenue incentive intensity so as to harmonize the benefit between the client and the contractor and reach a certain equilibrium state. A heuristic algorithm is developed. Furthermore, the influence of some factors on this equilibrium state is analyzed through a numerical example. Results show that revenue-based incentive mechanism is effective in object and benefit coordinating between the two parties of construction supply chain.