# You have invited four companies to bid on a consulting project. All four companies answered your invitation

## Question:

You have invited four companies to bid on a consulting project. All four companies answered your invitation to tender, but the bids vary in the number of hours each company estimates will be required to complete the project and in hourly rates that will be charged for those hours, as summarized in the table below.

a. Which company had the lowest bid and what is the total cost of that bid?

b. Which company will take the fewest hours to complete the work and how many hours is that?

c. Your organization will use linear averaging to choose one of these companies. To create a score for price, all four companies will be awarded 100 points to start, but then each will be penalized 1 point for every \$25 their bid exceeds the lowest bid in this group. To create a score for quality, the proportion of total hours provided by senior consultants is calculated and then multiplied by 100, rounded to the near- est integer. Which company has the worst score for price, and what is that score? Which company has the worst score for quality, and what is that score?

d. If the tender evaluation method of your organization specifies that the company with the best score based on 70% price and 30% quality should be selected, who will be awarded the consulting contract?

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