Im not certain why cost is deducted from revenue for the entirety of the contract bid.

Question

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?

Answer 1

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.

Answer 2

Hello!

It´s stated in the case, here > "Typically, the client calculates profitability by deducting COGS & Overhead from the retail price"

Cheers,

Clara

Answer 3

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Answer 4

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