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A
SciTools Bidding Example

Inputs
Cost to prepare a bid
Cost to supply instruments

$5,000
$95,000

Probability of no competing bid

Comp bid distribution (if they bid)
<$115K
$115K to $120K
$120K to $125K
>$125K

0.3

No bid
$115,000
$120,000
$125,000

Maximum EMV
Best decision

Monetary outcomes
SciTools wins
NA
$15,000
$20,000
$25,000

$12,200
$115,000

Data table for sensitivity analysis

Probability of no competing bid
0.2
0.3
0.4
0.5
0.6
0.7

=Data!$B$4
=Data!$B$7
=Data!$B$5

0.2
0.4
0.3
0.1

EMV analysis

SciTools' Bid

Range names used:

BidCost
PrNoBid
ProdCost

Maximum EMV
$12,200
$11,800
$12,200
$12,600
$13,000
$14,200
$16,900

Best decision
$115,000
$115,000
$115,000
$115,000
$115,000
$125,000
$125,000

Probabilities
SciTools loses
0
-$5,000
-$5,000
-$5,000

SciTools wins
0
0.86
0.58
0.37

SciTools loses
1
0.14
0.42
0.63

EMV
$0
$12,200
$9,500
$6,100

0
Don't bid

12.2K

15K

.86
Win
Lose .14

Bid 115K

-5K

12.2K
Bid 120K 9.5K

.58
Win
Lose .42

20K

-5K

Bid 125K
6.1K

Win

.37

Lose

25K

.63
-5K

15
15K
.3

0
Dont bid

12.2K

.8

Competitors

15K

Win

20K

No competitors

11K

.7

20K
Lose

.2
-5K

12.2K
Bid 115K

Bid

12.2K

.3

20K

No competiors
-5K

Bid 120K

25K

9.5K

Competitors

.4

.7

25K
Lose

Bid 125K

20K

Win

5K

.6
-5K

6.1K

No competitors

.3
25K
30K

Competitors
.1
.7

-2K

25K

Win
30K

Lose
.9
-5K