A lower quote has a higher supplied total cost
A fictional buyer compares two otherwise equivalent offers under a supplied educational model. Offer A has a unit cost of 120 currency units including every relevant cost in this model. Offer B quotes 80 and adds 12 for logistics,8 for transit holding,14 for quality-related work and 11 for the stated buffer financing, with no overlaps or other relevant differences. A colleague proposes selecting B because its visible quotation is lower. Another checks the declared boundary and arithmetic before making a recommendation. This written case purchases nothing and supplies no current tax, exchange or freight rate. It asks which cost comparison is supported and what real-world limitations remain beyond the stated simplified assumptions.
1. What is Offer B’s modeled total?
Read the worked answer
80+12+8+14+11=125 currency units per unit, which is5 more than Offer A under the supplied comparable boundary.
2. What does this not prove?
Read the worked answer
It does not prove that one geography or supplier type is always cheaper. Actual quality, risk, capacity, terms, currency, omitted costs and uncertainty require a real authorized comparison.