The following formula scores a vendors proposal based on pricing:
Points Available (10) * [(Bid Price - Minimum Bid Price)/Minimum Bid Price]
I've added a price ceiling to the denominator, so that any submissions over this are scored 0 (the ceiling is a factor of the lowest priced submission).
I created the following model:
I'm now trying to determine the correct calculation for the premium (i.e. cost) paid for each quality point scored (Quality in this case being the Technical + Safety score). I originally did this as the Price to Quality Ratio, and the difference between the price being evaluated and the minimum. I'm unsure if this is a correct approach. Does anyone know how to model the relationship between the points in pricing, and the points in quality? (e.g. for each increase in quality points, the pricing score will by impacted by x%)
Points Available (10) * [(Bid Price - Minimum Bid Price)/Minimum Bid Price]
I've added a price ceiling to the denominator, so that any submissions over this are scored 0 (the ceiling is a factor of the lowest priced submission).
I created the following model:
I'm now trying to determine the correct calculation for the premium (i.e. cost) paid for each quality point scored (Quality in this case being the Technical + Safety score). I originally did this as the Price to Quality Ratio, and the difference between the price being evaluated and the minimum. I'm unsure if this is a correct approach. Does anyone know how to model the relationship between the points in pricing, and the points in quality? (e.g. for each increase in quality points, the pricing score will by impacted by x%)