Contracting Test 5 Flashcards
Numbers that measure the percentage of price changes over time
Price index numbers
Calculates price changes for a single item over time
Simple Price Index (eggs)
Calculates price changes for a group of related items over time
Aggregate Price Index (poultry) - most are classified by region
Calculated by adding all the numbers together and dividing by the number of values
Mean
Middle value of number listed in numerical order
Median
Value that occurs the most frequently
Mode
Which data shape has the same median and mode?
Normal
Which data shape has a “tail” pointing to the right (positive) or left (negative)?
Skewed - a small number of extremely positive or negative values pulling the mean to the right or left of the median
Data shape that has two or more peaks
Bi- or Multi-modal
Maximum value - min value
Range
A Variable that drives price
Independent Variable
The variable you are evaluating
Dependent Variable
The quantity at which total revenue equals total cost
Break Even point
costs remain constant, even as activity level changes
Fixed Cost
Cost go up or down based on activity
Variable Cost
includes a fixed and variable element
Semi-Variable Cost
Pricing when unit price is under variable cost
Irrational Pricing Strategy
NI/OI*OP=NP
Calculate a new price using an indices
payments based on percentage or stage of completion are authorized
Performance Based Payment
contract financing arrangement that deviates from FAR Part 32 is considered unusual contract financing
Unusual Contract financing (Advance Payment)
payments made on any of the following bases:
– Performance measured by objective
– Accomplishing defined events
– Other quantifiable measures of results
– defined payment amounts
Performance Based Payments
Types of Financing
Progress Payments
Performance Based Payments
Unusual Contract Financing
Max advance payment?
15%
C=F+Vu(Q)
Cost Volume
Preferred Method of Government Financing
Performance payment
Vu-(C2-C1)/(Q2-Q1)
Variable Cost
F+Vu(Q)+Profit
Revenue (Ru(Q))
Ru(Q)-F-Vu(Q)=
Profit
When VU(Q) is greater the Ru(Q) is this a rational pricing strategy?
No, this is irrational
F/(Ru(Q)-Vu(Q)
Break Even point
(Ru-Vu)(Q)
Contribution income per unit
