The buying firm must develop an estimate of the winning bid amount. The buying firm's estimate should be based on market data, including the following:
The dollar value of previous bids.The expected profit from previous bids.The data set is used to estimate the probability of different bid scenarios. The scenario should include mock bids with low, moderate, and high profit margins.The expected profit equation is given as:(πA) = P(A) × y(A)

Question

Quizplus · Accepted Answer

The statement is true. The buying firm's estimate of the winning bid amount should be based on market data, including the dollar value and expected profit from previous bids. The expected profit equation provided can be used to estimate the profit from potential bid scenarios.

The Buying Firm Must Develop an Estimate of the Winning