To derive the entirity of the contract bid - shouldnt we add COGS and 15% discount to the bid value itself so that those costs are covered?
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Im not certain why cost is deducted from revenue for the entirety of the contract bid.
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Hi Ukasha,
If I understand your question correctly, the answer is embedded in the case here:
- Typically, the client calculates profitability by deducting COGS & Overhead from the retail price.
- In such a scenario of bidding, the supplier needs to find out how much profit he can forfeit in order for the deal to remain attractive.
Hello!
It´s stated in the case, here > "Typically, the client calculates profitability by deducting COGS & Overhead from the retail price"
Cheers,
Clara
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