Why would the company have bid with zero mark-up on some

Reference no: EM13453911

Your company, Bright Paints, is one of a dozen companies manufacturing a special reflective paint used for traffic signs. The State Department of Transportation has called for tenders to supply 10,000 gallons of blue reflective paint to be delivered within two months. You can foresee fitting in a production run of the blue paint and have decided to bid on the job. You calculate your incremental costs for this job to be $76,200. This particular contract is standard, similar in all in respects to hundreds of contracts you have bid on over the past few years. Your pricing policy has been to apply a mark-up to incremental costs to arrive at the bid price. Your mark-up has been higher when you had plenty of orders and lower when you had few or no orders to fulfill. You have assembled data relating the mark-up rate used and the percentage of contracts won at each mark-up rate, as follows.

a. Why would your company have bid with a zero mark-up on some past tenders? Why didn't it win all of those contracts?

b. What is the bid price that maximizes the expected contribution of the contract?

c. Why, or why not, is the fixed-price mode of bidding likely to be the best one to use for this contract?

Reference no: EM13453911

Questions Cloud

Write down the outer layer of the kidney what are its : question 1.name the arteries that supply blood to the kidneys.question 2.name the veins that drain blood from the

What are the potential benefits and consequences of : 1 one of the fundamental elements of theoretical marketing is that no single product or brand can fulfill the universal

There are no price efficiency or spending variances and any : consider the following informationnbspq1q2q3beginning inventory units0j300budgeted units to be produced40004000qactual

The mid-nineteenth century was a time of great change in : the mid-nineteenth century was a time of great change in the young america and many reform movements began in reaction

Why would the company have bid with zero mark-up on some : your company bright paints is one of a dozen companies manufacturing a special reflective paint used for traffic signs.

Regarding the varieties of representative government : regarding the varieties of representative government institutions in europe there are a number of important choices to

Write down the primary functions of the kidneys in the : question 1.what are the primary functions of the kidneys?question 2.in the process of these functions they regulate

Your purchasing department does not want to buy adjustable : your purchasing department does not want to buy adjustable height work stations for the shipping department stating

How might further adjust price before raising it to regular : maxim motronics a.g. have been marketing a new product in europe that has achieved notable market success and it now

User Account

All Pages