Week #2 - Costing & RFP Flashcards Preview

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Flashcards in Week #2 - Costing & RFP Deck (35):
1

what is cost estimating

an educate "guess" made by estimating department, as to what the costs will be prior to the job

2

what method will we use to determine the final price?

-standardized price lists (simple if repeats, hard if complex)
- % based = sliding scale per customer

3

some pricing policies are based on

operations strategy & business objectives

4

operations strategy includes

-competitive priorities
-level of difficulty

5

business objectives include

-new customers and sales effort
--trends in industry
-material supplies

6

T or F an estimator needs to know/understand all the production methods within company

TRUE

7

who adds the markup

sales or CSR

8

T or F...know the cost est. before negotiating final price

TRUE

9

without a cost estimate

you don't know if the job is profitable until it's done

10

How many steps are involved in cost estimating

2 steps

11

what are the 2 steps involved in cost estimating

1. planning production
2. assigning production times and costs

12

each department in planning production is called

a cost center (other cost centers might be marketing or sales)

13

the planning production steps involves

-estimators breaking down into steps to make product
-creates an accurate job of plan

14

what is the formula for assigning production times and costs?

cost center estimates= (production time x BHR) + consumables (materials) + buyouts (outside services)

15

Production time is the

rate/time it takes to consistently produce a product in repeatable conditions (eg. Folder: 20,000 sheets per hour (1 hour)

16

how do you determine the rate?

- industry average
- collected info from production

17

what is BHR?

rate at which it costs you to use that cost center

18

what are the issues with BHR

- incl small portion of indirect costs (e.g. admin costs)
- might over inflate costs (if job too small)

19

production time includes

1. consumables (materials used, quantity and cost)
2. buyouts (outside services or outsourcing)

20

define job order costing

tracking and applying actual costs to the job after production

21

whats the purpose of job costing

1. compare actual cost to estimated cost
2. ensure all changes that customer make are accounted for on final invoice to customer

22

How to calculate job order costing?

job order costing = dL + dM + OH

23

how do you calculate dL?

direct labour
dL = dLH x dLC

hours tracked by: timesheet, computer

24

how to you calculate dM?

direct materials
-directly allocated to "1" product
-tracked by: consumables used, purchase orders

25

define overhead

cost associated with running your business but is not main source of income (usually calculated annually)

26

how is overhead calculated

1. OH = total OH cost/ DL cost
2. OH rate/hr = total OH cost / Total dLH ..then calculate
OH- OHrate x dLH

27

What are some issues with costing

1. project is custom
2. each job has its unique requirements

28

What and why do company's tender

to tender a docment is a great way to earn/seek new potential vendors (economic, political, social)

29

List the typs of documents

a. tender vs quoateation
b. RFI
c. RPI
d. RFQ
e. master contract
f. RFP
g. EOI
h. Unsolicited proposal

30

tender vs quaotation

quatation: doesnt mean to say they will buy anything
tender: intention to buy goods/services

31

Whats an RFI & RPI

- request for info: focus on capabilities of potential suppliers
- request for pre-qualifying info: prescreening doc

32

whats an RFQ & Master contract

request for quotation: suitable for products that are standardized. Comes after RFI or RFP
master contract: terms and conditions

33

whats an EOI & Unsolicited proposal

expression of interest: fishing
unsolicited proposal: sent to a company by a potential supplier

34

whats thw GO/NO GO decision

pass/fail test, should we submit RFP?

35

where do you find an RPF?

biddingo.com