Utility Index EU

Ui = [ (1 – (Qbest – Qi) x N) / Pi ] x Pbest

Ui =  Utility Index

Qbest = Weighted quality score of the quotation with the highest quality score

Qi = (Weighted) Quality of the registration

N = WQ / WP (quality/price ratio)

WQ = Weighing quality (in %)

WP = Price weighting (in %)

Pi = Subscription price

Pbest = Price of the quotation with the lowest price

"Value for Money (expressed in Utility of U) 

The Utility index is a method to determine EMVI which is also called "Value for Money" in professional literature; Dividing quality by price; or Q/P. The highest resulting number (UI) is the best quotation. The higher the Q, the better, but also, the lower the P, the better. A 10% higher quality justifies a 10% higher price compared to another quotation. This makes the index intuitive and proportional. 

Adjustment in case quality and price are not equally important (N) 

For Q / P applies; price and quality are just as important, 1% more Q may 1% more P 'cost'. To be able to apply a weighting in case quality is more important than price (e.g. 1% more Q may cost 2% more P) or vice versa, N has been included in the formula. The difference between the quotation with the best quality and the quality of another quotation ("i") is multiplied by a factor N. N = weight quality / weight price. In case price and quality are equally important, then N = 1. But if price is 4 times more important, then N = 0.25 (20%/80% = 0.25). In general: if price is more important, then N < 1 applies, if quality is more important, then N > 1 applies.

Weighted quality of the bid

Because the maximum quality score is dependent on the P/Q ratio, another step needs to be taken. This step involves dividing your own quality score by the weighted quality (Qi-WQ)

 Multiply index by lowest price (×Pbest) 

Another Adjustment (irrelevant for the result) has been made to give the result UI a meaningful value. Because of this adjustment the maximum UI is 100%. This is obtained when an offer has the highest quality and the lowest price. The adjustment is to multiply the Q/P value by the price of the offer with the lowest price. Note that this does not make the formula "relative" to the lowest price (because all U's are multiplied with this same value).

Full ranking: From U to Price Deficient 

On the determination of the highest U, a second step follows: determining the ranking of the other bids. Because the UI can potentially become negative at a high weight of quality (> 50%), the ranking of all UI's does not give a correct representation; Example how (1 - (Qbest - Qi) x N ) becomes negative: 1 - ( 0.9 - 0.5 ) x 4 = 1 - 1.6 = - 0.6