away, and 0 points if the supplier
is located more than 40 KM away.
But most purchasers struggle to figure out a way to score prices for
comparison. So, I took it upon myself to create a supplier scorecard price
comparison formula.
The Formula is built on this principle: The penalty to a
supplier's pricing score should be proportionate to the degree that its price
varies from the Lowest Qualified Bid (LQB). So, if a supplier's price is
25% higher than the LQB, its pricing score should be 25% lower than the
pricing score of the supplier who submitted the LQB. If the supplier's
price is 40% higher, it's pricing score should be 40% lower. Here is the
Formula:
PS = MP x (1 - ((SP-LQB)/LQB))
Where,
PS = Pricing Score
MP = Maximum Points
SP = Supplier's Price
LQB = Lowest Qualified Bid |
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