The effect of increasing size of process plant upon the plant contracting industry. Part II

Abstract The first paper on this subject (EPE 1(2): 123) illustrated how the increase in size of process plant has produced special problems for the process plant contractor and this was illustrated by a case study of iron ore sintering plants. This second paper sets out to examine this problem analytically. With the aid of a simple model of competitive bidding it illustrates how, as the size of individual orders increases relative to the contractor's capacity, the mismatching of workload with capacity results in less profitable and less predictable operation. It is suggested that this effect can be reduced by the contractor increasing his capacity and by using a restricted bidding policy.