International Journal of Applied Engineering Research ISSN 0973-4562 Volume 12, Number 19 (2017) pp. 9067-9073 © Research India Publications. http://www.ripublication.com 9067 Decision Making Modelling with Logistic Regression Approach Kataresada Ketaren 1 and Novdin M. Sianturi 2 1,2 Civil Engineering, University of Simalungun, P. Siantar, Indonesia Kopertis Area 1 Medan, Indonesia. Abstract Decision making is a process of making choices by identifying decision, gathering information, identifying alternatives, and also assesing alternative resolutions. The decision making which is discussed in this study is related to bid/ no bid. In an effort to uncover the main factors that characterize the one distinct of bidding decisions, namely bid/ no bid, this study identifies the key determining factors and their importance weights. Significant factors in the decision to bid process are identified and a pro-forma to elicit a numerical assessment of these factors is developed and validated using the bid/ no bid decision-makers from a construction company. Using the pro-forma, data were collected from the collaborating company for historical bid opportunities. The aim of this research paper is to analyse and present factors which has a positive and significant relationship the decision to bid/ no bid. Statistical techniques are used to get a better understanding of data characteristics and to have the model process. Factor analysis was used in this research to find a way to summarize the information contained in a number of a original variables into a smaller set of new, composite dimensions or factor with a minimum loss of information. Logistic regression models were developed with the factors as independent variable from previous factor analysis process to get the final model with predictive accuracy rate of 87 percent. The positive and significant factors contributing to the prediction were competition in the market, market share, and experience, demonstrate that the model functions effectively in predicting the bid/ no bid decision process. Keywords: Bid/no bid decision, contractor, strategic decision, decision making, factor analysis, logistic regression INTRODUCTION The bidding process involves two crucial decisions: first, whether bid or not to bid for a project and second, the determination of the bid price. The bid/no bid decision is complex and dynamic, involving many factors also while the selection process of the most appropriate projects for which to bid or not to bid is fundamental decision to a successful commercial strategy (Shash, 1993)[16]. Bid/ no bid decision- making is a critical activity for a contractor. Limited by both the nature of and the competition for bid opportunities, bid/ no bid decision is associated with uncertainty and complexity (Lin and Chen, 2004)[11]. One of the most important decisions that have to be made by contractor firms is whether to bid or not to bid for a project, when an invitation has been received. Because of the importance of his decision making issue, the decision is not considering only about a probability to win the tender but also taking into account of the latter part, which is being able to finish the job as planned with the expected profit (Lin and Chen, 2004)[11]. Since contractors’ bidding behaviors are affected by numerous factors related both to the specific features of the project and dynamically changed situations, bidding decision problems are highly unstructured. The usual practice is to make bid decisions on the basis of intuition derived from a mixture of gut feelings, experience and guesses (Drew, 2001)[6]. However, the development of successful bidding strategies is a key factor to the survival of a contracting company. The basis of a successful strategy is to filter out losing bid opportunities and concentrate proposal efforts on bid opportunities that, when successful, assist in satisfying the objectives of the organization. With regard to preventing an organization from dissipating its energies in preparing a losing proposal, Rosenau, (1998)[15] even asserted that the bid/no-bid decisionmust be made within the context of the organization’s strategic framework. Numerous researchers have developed models for bid/no bid and mark-up size decisions. Previous Decision to Bid/No Bid Decision Models Ahmad (1990)[1] presents a deterministic worth evaluation model of the bid/no-bid decision problem. A suggested decision is made by comparing this score with a desired minimum (threshold) score. Although the model is illustrated using ahypothetical bidding decision-making scenario, the model is theoretical, based on a set of attributes obtained from a questionnaire survey of 400 US general contractors. Thirteen attributes (factors) lower-level criteria, representing major objectives of a construction firm, are divided into four hierarchical groups: job-related, market-related, firm-related and resource-related. A great volume of literature concerned with bidding strategies has resulted in many bidding models. However, Friedman’s study was the first research aimed to develop a quantitative bidding optimization model. Sadly, the evidence suggests that practitioners have made relatively little use of those models (Rothkopf and Harstad, 1994)[18] and most of these models continued in academic circles and did