DecisionBranch

Bid on a tender decision tree template

Is the bid worth the cost of bidding?

Use this template
RecommendedSubmit a full bidExpected value 59,500 · 6,500 ahead of Partner with a larger firm

The tree

Bid on the tender?−35k70%30%70%30%−10k35%65%Bid on the tender?EV 59,500→ Submit a full bidSubmit a full bidEV 94,500Pass compliance gateEV 135,000Win the award450,000Lose on price0Disqualified at gate 10Partner with a larger firmEV 63,000Consortium wins180,000Consortium loses0Don't bid0

Outline

# Analytical, profit in rand
Bid on the tender?
  Submit a full bid (cost 35000) # compliance pack, site visits, pricing
    Pass compliance gate (p 0.7)
      Win the award (p 0.3): 450000
      Lose on price (p 0.7): 0
    Disqualified at gate 1 (p 0.3): 0
  Partner with a larger firm (cost 10000)
    Consortium wins (p 0.35): 180000
    Consortium loses (p 0.65): 0
  Don't bid: 0

How to use it

  1. Press Use this template. The tree opens in the editor, no account needed.
  2. Edit the outline on the left. Indentation is the tree; (p 0.4) is a probability, (cost 5000) a cost, : 200000 a payoff.
  3. Watch the expected value and the recommended branch update as you type. Open Analysis for the risk profile and the switch points.