A method for the calculation of bid markup to be used by contractors is developed which relates to the capacity of a firm during a given time period and to its particular financial goals. Capacity is measured for these purposes by normally available crew-time in a calendar period rather than in dollars, thus acknowledging the variation in dollar production achievable by one crew doing various types of work. It is demonstrated that setting markup by straight percent methods can fail to produce desired financial goals.
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Richard C. Ringwald (1982) studied this question.
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