After analyzing the engineering changes, Mr.Travis used his business skills to prepare the estimate shown below. The engineers estimate generated by Mr.Travis will serve as a baseline for negotiations process. As shown below, the estimated price is $28.26
Meanwhile, requests for proposals were sent out to 12 suppliers. Mr.Travis received eight responsive quotes,of which three were in the range from $35.60 to $42.00 The last two bids were $22.14 and $24.68 Mr.Travis evaluated each supplier's costs breakdown with the others and compared each cost with his estimated costs. Mr.Travis was impressed wiht the quality of the two proposals that came in below his estimate,and was surprised that both firms had each supplied similar housigs during the past year. Both companies were well-established component engineering companies with good reputations for satisfactory performance on previous contracts, The cost breakdowns for the two low proposals are reproduced in Table C9.2.