Company A is bidding on a project it estimates to cost $400,000 to perform. Using a 25% markup, it will charge $500,000 creating a profit of $100,000. It has been learned, however, that Company B is considering bidding on the project as well, and they figure it will be a bid of about $470,000. Company A really wants this project, so they are considering a bid with a 15% markup to $460,000 to create a profit of $60,000 and ensure they will win the bid even if Company B does submit one.
Prepare a payoff table from Company A's point of view.
From this table, find Company A's optimal decision using the conservative approach, the optimistic approach, and the minimax regret approach
If Company B is known to submit bids on only 1/4 of the projects it considers, what decision should company A make?
Given the information in the above question, how much would spy be worth to Company A to find out if Company B will place a bid.
Any help on all or any of these will be greatly appreciated! 10 points will go to most comprehensive answer. Thanks!!
Prepare a payoff table from Company A's point of view.
From this table, find Company A's optimal decision using the conservative approach, the optimistic approach, and the minimax regret approach
If Company B is known to submit bids on only 1/4 of the projects it considers, what decision should company A make?
Given the information in the above question, how much would spy be worth to Company A to find out if Company B will place a bid.
Any help on all or any of these will be greatly appreciated! 10 points will go to most comprehensive answer. Thanks!!