a.
Interpretation:
The company that has the lowest bid and the total cost of that bid.
Concept Introduction:
Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.
a.
Explanation of Solution
Given information:
A tender invitation for a consulting project was sent and four companies have done the bidding as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | |
Company A | 150 | 10 | ||
Company B | 250 | 6 | ||
Company C | 300 | 2 | ||
Company D | 200 | 4 |
Based on the bid provided four companies, total cost for all consulting hours is calculated as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | Total bid cost($) | |
Company A | 150 | 10 | |||
Company B | 250 | 6 | |||
Company C | 300 | 2 | |||
Company D | 200 | 4 |
Thus it is clear that the lowest bid is from company C and the bid amount is
b.
Interpretation:
The company that will take the fewest hours to complete the work and the hours is may take.
Concept Introduction:
Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.
b.
Explanation of Solution
Given information:
A tender invitation for a consulting project was sent and four companies have done the bidding as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | |
Company A | 150 | 10 | ||
Company B | 250 | 6 | ||
Company C | 300 | 2 | ||
Company D | 200 | 4 |
Based on the bid provided four companies, total consulting hours is calculated as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | Total consulting hours | |
Company A | 150 | 10 | |||
Company B | 250 | 6 | |||
Company C | 300 | 2 | |||
Company D | 200 | 4 |
Thus it is clear that the company A will take least time of
c.
Interpretation:
Price score and quality score of the bid based on stated specification.
Concept Introduction:
Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.
c.
Explanation of Solution
Given information:
A tender invitation for a consulting project was sent and four companies have done the bidding as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | |
Company A | 150 | 10 | ||
Company B | 250 | 6 | ||
Company C | 300 | 2 | ||
Company D | 200 | 4 |
For calculation of price score, each company is awarded
For calculation of quality score, the proportion of hours provided by senior consultant is multiplied by
Based on the bid provided four companies, total cost for all consulting hours is calculated as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | Total bid cost($) | |
Company A | 150 | 10 | |||
Company B | 250 | 6 | |||
Company C | 300 | 2 | |||
Company D | 200 | 4 |
Thus it is clear that the lowest bid is from company C and the bid amount is
For calculation of price score, each company is awarded
Total bid cost($) | Difference with lowest bid($) | Penalty for price score | Price score | |
Company A | ||||
Company B | ||||
Company C | ||||
Company D |
For calculation of quality score, the proportion of hours provided by senior consultant is multiplied by
Hours provided by junior consultants (hr) | Hours provided by senior consultants (hr) | Proportion of hours provided by senior consultant | Quality score | |
Company A | 10 | |||
Company B | 6 | |||
Company C | 2 | |||
Company D | 4 |
Hence company B has worst price score of
d.
Interpretation:
The company that would win the bid based
Concept Introduction:
Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.
d.
Explanation of Solution
Given information:
A tender invitation for a consulting project was sent and four companies have done the bidding as below-
Junior consultant hourly rate ($) | Hours provided by junior consultants (hr) | Senior consultant hourly rate ($) | Hours provided by senior consultants (hr) | |
Company A | 150 | 10 | ||
Company B | 250 | 6 | ||
Company C | 300 | 2 | ||
Company D | 200 | 4 |
For calculation of price score, each company is awarded
For calculation of quality score, the proportion of hours provided by senior consultant is multiplied by
For finalizing the contract
Price score | Quality score | Weighted average score | |
Company A | |||
Company B | |||
Company C | |||
Company D |
Hence, company A has highest weighted average score and should be awarded with the contract.
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Chapter 9 Solutions
Practical Operations Management
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