# Bid/No-Bid Scorecard and Expected Value Calculator

> Source: https://netray.co/tools/job-shop-bid-no-bid-expected-value-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Rate an RFQ on five weighted criteria and see expected value, break-even win probability and the cost of quoting it.

## Category

cost-finance

## Industry

Job Shops & Contract Manufacturing

## Audience

- Estimator
- Owner
- Sales manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Capability fit

**Key:** fit

**Type:** slider

**Default:** 4

**Min:** 1

**Max:** 5

**Step:** 1

**Help:** 5 = core process and material, 1 = outside our capability.

#### Schedule and capacity fit

**Key:** capacity

**Type:** slider

**Default:** 3

**Min:** 1

**Max:** 5

**Step:** 1

**Help:** 5 = open capacity at the needed ship dates.

#### Margin attractiveness

**Key:** margin_fit

**Type:** slider

**Default:** 3

**Min:** 1

**Max:** 5

**Step:** 1

#### Customer quality

**Key:** customer

**Type:** slider

**Default:** 4

**Min:** 1

**Max:** 5

**Step:** 1

#### Risk profile (5 = low risk)

**Key:** risk

**Type:** slider

**Default:** 3

**Min:** 1

**Max:** 5

**Step:** 1

**Help:** Consider penalty clauses, tooling exposure, tolerance difficulty and payment terms.

#### Order value if won

**Key:** order_value

**Type:** number

**Default:** 85000

**Min:** 0

**Step:** 1000

**Unit:** $

#### Expected gross margin

**Key:** gm_pct

**Type:** number

**Default:** 28

**Min:** 0

**Max:** 80

**Step:** 0.5

**Unit:** %

#### Estimated win probability

**Key:** p_win

**Type:** slider

**Default:** 25

**Min:** 1

**Max:** 90

**Step:** 1

**Unit:** %

#### Quoting effort

**Key:** quote_hours

**Type:** number

**Default:** 10

**Min:** 0

**Step:** 0.5

**Unit:** h

#### Loaded estimator cost

**Key:** quote_rate

**Type:** number

**Default:** 65

**Min:** 0

**Step:** 1

**Unit:** $/h

**Outputs:**

#### Weighted bid score

**Key:** score

**Expr:** (fit * 30 + capacity * 20 + margin_fit * 20 + customer * 15 + risk * 15) / 5

**Format:** percent

**Primary:** true

**Description:** Weights: fit 30, capacity 20, margin 20, customer 15, risk 15. Above about 70 usually means bid.

#### Cost to prepare the quote

**Key:** quote_cost

**Expr:** quote_hours * quote_rate

**Format:** currency

**Description:** Estimator hours multiplied by loaded hourly cost.

#### Gross margin if won

**Key:** gm_dollars

**Expr:** order_value * gm_pct / 100

**Format:** currency

#### Expected value of bidding

**Key:** ev

**Expr:** p_win / 100 * gm_dollars - quote_cost

**Format:** currency

**Primary:** true

**Description:** Win probability times gross margin, less the sunk cost of quoting. Negative means the bid loses money on average.

#### Break-even win probability

**Key:** breakeven

**Expr:** min(100, quote_cost / max(gm_dollars, 1) * 100)

**Format:** percent

**Description:** Win probability at which expected value is zero.

#### Expected value per quoting hour

**Key:** ev_per_hour

**Expr:** ev / max(quote_hours, 0.1)

**Format:** currency

**Chart:**

#### Expected value vs win probability

**Type:** line

**X:** p_win

**From:** 5

**To:** 80

**Steps:** 16

**Series:**

- ev

**Disclaimer:** Expected value uses gross margin, not net profit, and ignores capacity opportunity cost and relationship value. Treat it as one input to the bid decision.

## Content

**Intro:** Every quote costs estimating time, and most quotes are lost. A bid/no-bid decision weighs whether the job fits the shop and whether the expected payoff covers the effort. This calculator combines a weighted scorecard with a simple expected value model.

**Sections:**

#### How to use it

**Body:** Rate the five criteria from 1 to 5, enter the order value and your realistic gross margin, then estimate win probability honestly. Use your own trailing hit rate for similar work as the starting point rather than optimism. Enter the hours the quote will take and your loaded estimator cost. The weighted score tells you whether the job fits, while the expected value shows whether the economics justify the effort. Slide the win probability and watch the chart to see how sensitive the decision is.

#### The formulas

**Body:** Weighted score = (fit x 30 + capacity x 20 + margin x 20 + customer x 15 + risk x 15) / 5, expressed as percent. Expected value = P(win) x (order value x gross margin %) minus quote cost, where quote cost = hours x loaded rate. Break-even probability = quote cost / gross margin dollars. This is the standard expected monetary value approach used in decision analysis, with the quoting cost treated as a sunk cost incurred whether or not you win.

**Bullets:**

- Score measures fit, expected value measures economics.
- Low score plus positive EV: bid only if capacity is idle.
- High score plus negative EV: reduce quoting effort or decline.

#### Reading the results

**Body:** With the defaults, gross margin is 23,800 dollars, quote cost is 650 dollars and a 25 percent win chance gives a positive expected value of about 5,300 dollars. The break-even probability is under 3 percent, so the economics are comfortable. The same RFQ on a 4,000 dollar order would flip the picture: margin of 1,120 dollars against 650 dollars of quoting cost needs a 58 percent chance just to break even.

#### Common mistakes

**Body:** People overestimate win probability for RFQs sent to many shops. Use your hit rate by customer type, not your best case. Another error is ignoring capacity: a profitable quote that lands during a full backlog displaces better work. Finally, do not use this for blanket orders without annualizing value and adjusting for ramp.

**Cta:** If you want hit rate by customer and part family pulled straight from your ERP quote history, we can help build that. The calculator itself needs no data from us.

**Faq:**

#### What win probability should I use?

**Answer:** Start with your trailing hit rate on similar quotes, measured by count and by value. Typical job shops see single digit to 30 percent depending on market and RFQ source. Adjust up for repeat customers and down for open competitive bids.

#### Why use gross margin instead of price?

**Answer:** Price is revenue, not payoff. The shop only keeps the margin after materials, labor and outside processing. Using margin in the expected value formula makes the comparison against quoting cost honest.

#### What is a good bid score threshold?

**Answer:** Many shops use about 70 percent as a bid line, 50 to 70 as bid with conditions, and under 50 as decline. Calibrate by checking which past scores turned into profitable jobs.

#### Does this replace formal bid reviews for large programs?

**Answer:** No. Large defense or aerospace programs need capture planning, flow-down review and financial approval. Use this as a quick screen for routine RFQs and as supporting input for bigger reviews.

## Search terms

bid no bid calculator, bid no bid scorecard manufacturing, should we quote this rfq, bid decision matrix, expected value of a bid, break even win probability, job shop bid decision, cost of quoting

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