EPGP stands for Effort Points/Gear Points. Effort Points (EP) quantify the effort each member put towards the, hopefully common, guild goals. Gear Points (GP) quantify what loot each member got back in return. Loot priority (PR) is computed as the quotient of the two:
PR = EP/GP
The person with the higher PR gets the first say on loot. As a result, the more effort you put the more gear you receive. As a matter of fact, the gear you receive is proportional to the effort you put. EPGP is based on this simple principle, but there are some complexities that need to be dealt with which will be covered below.
In order to award recent effort more than past effort, which in effect avoids PR hoarding for veterans and enables new coming and dedicated members of a guild to be awarded properly, EPGP supports a decay mechanism. Decay simply removes a chunk of EP and GP from the totals, effectively leaving PR unchanged. For example with a decay of 10% applied each week, for each 7 days that pass your effort's rewards get diminished by 10%. The effort you put 10 weeks ago will only be worth 34.8% of what it did when you received it ( (1-0.1)10).
A loot system should behave reasonably not only in its steady state but also when new members join a guild and the guild's efforts. For this reason some extra parameters need to be setup.
Base GP adds a certain GP to each member of a guild. This means the final GP of each member is: GP = BaseGP + RealGP. All PR computations happen on GP not BaseGP or RealGP. Decay also applies to GP as a whole but it only diminishes RealGP. As such GP can never be lower than BaseGP. For example, say we have BaseGP = 100 and RealGP = 10. Applying a 10% decay will result in RealGP = 0 for a total of 100 GP.
Base GP prevents new recruits or long time inactive members from trumping your dedicated members just because their GP is 0 and thus their PR infinite.
Min EP puts a limit, which members should exceed in order to have any loot priority. This is more or less an attendance check and a road block for new members to reach a point after which they can need on loot. Anyone below MinEP has in effect lower PR then everyone above MinEP even if their effective PR is higher. For example MinEP = 10000 and member A has 20000 EP and 4000 GP for 5 PR and member B has 1000 EP and 100 GP for 10 PR. In this case member A has higher priority for loot since he/she is above the MinEP threshold even though his/her PR is lower than member B.
You can copy this spreadsheet to your account and change the parameters to fit your loot policies.