BID KNOWLEDGE CENTRE
Worked calculations and decision models Q&A
Worked calculations and decision models: Clear answers about worked calculations and decision models, with the relevant context and practical next steps.
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Under a simple model, what is the expected contribution if a bid costs £3,000, has a 25% win probability and earns £40,000 contribution if won?
The expected contribution is £7,000: (0.25 × £40,000) − £3,000.
This model assumes the £40,000 is contribution after the relevant delivery costs and that bid cost is incurred regardless of outcome.
It excludes taxes, financing, risk beyond the stated probability and alternative uses of capacity.
The arithmetic is checked; the assumed win probability is not an empirically verified prediction.
Scope: Illustrative calculation; no procurement regime implied
What win probability breaks even on a £4,000 bid cost and £20,000 contribution if won?
The simple break-even probability is 20%: £4,000 ÷ £20,000.
Above that assumed probability the model has positive expected contribution, before other omitted costs and risks.
This is a decision aid, not a recommendation to bid at 21%.
The contribution must be correctly defined and mandatory eligibility, delivery capacity and contractual risks still need their own assessment.
Scope: Illustrative calculation; no procurement regime implied
How many bid-working hours do four people provide over ten days at six available hours per day?
They provide 240 available hours: 4 × 10 × 6.
If the plan requires 280 hours, the shortfall is 40 hours.
This assumes all four people are available for those days and that the six hours already exclude other commitments.
It does not show whether the right skills are available at the right time or whether dependent tasks can be parallelised.
Scope: Illustrative calculation; no procurement regime implied
If an answer scores 4 out of 5 and carries 60 points, what is its linearly weighted score?
It contributes 48 points: (4 ÷ 5) × 60. This assumes the published scoring method uses a linear conversion from the raw score to the stated weighting.
Other tenders may use different normalisation, thresholds or rounding rules.
Apply this calculation only when it matches the actual evaluation method; it is not a universal procurement formula.
Scope: Illustrative calculation; no procurement regime implied
If the final quality score is 52 and the final price score is 26, what is the total?
The total is 78 points when those two scores are intended to be added directly: 52 + 26.
Confirm that both figures are already weighted and share the same scoring scale.
Adding an unweighted raw quality mark to a weighted price score would produce an invalid comparison.
Minimum-score gates and any separate award conditions remain outside this arithmetic example.
Scope: Illustrative calculation; no procurement regime implied
What price score results from lowest price £80,000, bidder price £100,000 and a 30-point inverse-price weighting?
Under the explicitly assumed formula, the score is 24 points: (£80,000 ÷ £100,000) × 30.
This example does not say the buyer must use inverse-price scoring.
Check the tender for the actual formula, treatment of outliers, rounding, capped scores and any minimum-price or abnormal-price process before using a model to guide a commercial decision.
Scope: Illustrative calculation; no procurement regime implied
Under that inverse-price formula, how many points are gained by reducing £100,000 to £90,000 while the lowest price stays £80,000?
The score rises from 24 to approximately 26.67, a gain of approximately 2.67 points.
The unrounded calculation is (80,000 ÷ 90,000 × 30) − (80,000 ÷ 100,000 × 30).
This holds the competing price constant and ignores other evaluation effects.
The discount's lost contribution must be assessed separately; extra points are not automatically worth the financial cost.
Scope: Illustrative calculation; no procurement regime implied
What price produces a 20% margin when the defined delivery cost is £80,000?
The required price is £100,000: £80,000 ÷ (1 − 0.20).
Profit is then £20,000, which is 20% of the selling price.
This assumes the cost definition includes all costs relevant to the margin you intend to measure.
Adding 20% to cost would produce £96,000 and a different margin; margin and markup use different denominators.
Scope: Illustrative calculation; no procurement regime implied
How does a 5% price discount affect profit when the original price is £100 and cost stays £80?
Price falls to £95 and profit falls from £20 to £15, a 25% reduction in profit: (£20 − £15) ÷ £20.
The example assumes cost and volume do not change.
A small percentage reduction in selling price can have a much larger percentage effect on profit, which is why discounts should be tested in the commercial model.
Scope: Illustrative calculation; no procurement regime implied
What is the VAT-inclusive value of £120,000 if VAT is assumed to apply at 20%?
On that explicit assumption the value is £144,000: £120,000 × 1.20.
This arithmetic does not determine the correct tax treatment or the procurement valuation method for a real contract.
Check whether the supply is taxable, the applicable rate, the relevant threshold regime and which options or extensions must be included before using a value in a compliance decision.
Scope: Illustrative calculation; no procurement regime implied
What is the count-based win rate for six wins out of 24 decided bids?
It is 25%: 6 ÷ 24 × 100. The example assumes the 24 records are comparable decided bids in the stated cohort.
Report pending, withdrawn and cancelled opportunities separately according to a consistent definition.
This result measures observed outcomes in that sample; it is not a 25% guaranteed probability for the next tender.
Scope: Illustrative calculation; no procurement regime implied
What is retrieval precision if 18 of 24 returned evidence items are relevant?
Precision is 75%: 18 ÷ 24 × 100. It measures the proportion of returned items judged relevant under the test definition.
It does not measure how much relevant evidence was missed.
Define relevance consistently and use an appropriate labelled test set before comparing systems; a perfectly precise result containing one item can still be incomplete.
Scope: Illustrative calculation; no procurement regime implied
What is retrieval recall if a system finds 18 of 30 known relevant evidence items?
Recall is 60%: 18 ÷ 30 × 100. The denominator assumes the test set identifies the relevant items sufficiently well.
Recall alone does not measure the amount of irrelevant material returned.
Use it with precision and inspect which evidence was missed, because a missing critical requirement can matter more than several missed background passages.
Scope: Illustrative calculation; no procurement regime implied
What is the percentage time reduction from 12 hours to 9 hours per bid task?
It is 25%: (12 − 9) ÷ 12 × 100, saving three hours per comparable task.
Confirm that both measurements include the same preparation, checking and rework.
A reduction in drafting time alone is not the same as a reduction in end-to-end bid effort.
Do not translate released time into cash savings unless the relevant cost actually changes.
Scope: Illustrative calculation; no procurement regime implied
What is the illustrative monthly net benefit of saving 60 hours valued at £50 per hour with a £1,200 tool cost?
The gross value of released time is £3,000 and the net modelled benefit is £1,800: (60 × £50) − £1,200.
This excludes implementation, maintenance and other costs.
The £50 rate and 60 hours are assumptions, and released staff capacity is not automatically cash saved.
Verify real workflow quality and how the released time will be used.
Scope: Illustrative calculation; no procurement regime implied
How many hours must a £1,200 monthly tool save to break even at an assumed £50 per hour?
It must release 24 hours per month under the simplified model: £1,200 ÷ £50.
Additional operating or implementation costs would raise the requirement.
If staff expenditure remains unchanged, this is a capacity-value break-even point rather than a cash-saving guarantee.
Test whether the hours are genuinely released after evidence checking, corrections and administration.
Scope: Illustrative calculation; no procurement regime implied
In an illustrative 1,000-word plan, how many words does a 60% delivery-method allocation provide?
It provides 600 words: 1,000 × 0.60. If the remaining 40% is split equally between context and evidence, each receives 200 words.
These allocations are a planning example, not a scoring rule.
The actual question may require a different balance, and evidence is often more effective beside the relevant claim than in a separate block.
Scope: Illustrative calculation; no procurement regime implied
How many FTE are needed for 3,000 hours of work if each FTE provides 1,500 usable hours?
The simple requirement is 2 FTE: 3,000 ÷ 1,500.
This assumes the usable-hour figure already accounts for non-delivery time and that the skills and timing are compatible.
Peak coverage, absence resilience and location constraints can require a different staffing arrangement.
Annual capacity alone does not establish that a particular service-level commitment is feasible.
Scope: Illustrative calculation; no procurement regime implied
What funding gap arises from £25,000 mobilisation plus two £15,000 operating months before any receipts?
The cumulative outflow is £55,000: £25,000 + £15,000 + £15,000.
The example assumes no other receipts or outflows and no existing cash assigned to the contract.
The actual funding need depends on payment milestones, tax, financing, delays and the wider business.
Use a dated cash-flow schedule for a real bid rather than relying on this simplified total.
Scope: Illustrative calculation; no procurement regime implied
How many review hours would one million answers require at an assumed three minutes each?
The arithmetic is 50,000 hours: 1,000,000 × 3 ÷ 60.
Three minutes is an illustrative assumption, not an observed standard or evidence that this is enough to verify a legal or technical answer.
Research, corrections, expert review and later updates would add effort.
This shows why a million individually checked answers must be treated as a maintained publishing programme.
Scope: Illustrative calculation; no procurement regime implied