# Question

Road Pavers, Inc. (RPI) is considering bidding on a county road construction project. RPI has estimated that the cost of this particular project would be $5 million. In addition, the cost of putting together a bid is estimated to be $50,000. The county also will receive four other bids on the project from competitors of RPI. Past experience with these competitors suggests that each competitor’s bid is most likely to be 20 percent over the project cost of $5 million, but could be as low as 5 percent over or as much as 40 percent over this cost. Assume a triangular distribution for each of these bids.

(a) Suppose that RPI bids $5.7 million on the project. Use ASPE to perform 1,000 trials of a simulation on a spreadsheet. What is the probability that RPI will win the bid? What is RPI’s mean profit?

(b) Generate a parameter analysis report to consider eight possible bids between $5.3 million and $6 million in order to forecast RPI’s mean profit for each bid. Which of these bids maximizes RPI’s mean profit?

(c) Generate a trend chart for the eight bids considered in part b.

(d) Use ASPE’s Solver to search for the bid that maximizes RPI’s mean profit.

(a) Suppose that RPI bids $5.7 million on the project. Use ASPE to perform 1,000 trials of a simulation on a spreadsheet. What is the probability that RPI will win the bid? What is RPI’s mean profit?

(b) Generate a parameter analysis report to consider eight possible bids between $5.3 million and $6 million in order to forecast RPI’s mean profit for each bid. Which of these bids maximizes RPI’s mean profit?

(c) Generate a trend chart for the eight bids considered in part b.

(d) Use ASPE’s Solver to search for the bid that maximizes RPI’s mean profit.

## Answer to relevant Questions

The William Graham Entertainment Company will be opening a new box office where customers can come to make ticket purchases in advance for the many entertainment events being held in the area. Simulation is being used to ...A client of a large investment bank is interested in purchasing a European call option for a certain stock that provides him with the right to purchase the stock at a fixed price 12 weeks from today. The client then would ...You are given the multiplicative congruential generator x0 = 1 and xn+1 ≡ 7xn (modulo 13) for n = 0, 1, 2, . . . . (a) Calculate xn for n = 1, 2, . . . , 12. (b) How often does each integer between 1 and 12 appear in the ...The Pine Furniture Company makes fine country furniture. The company’s current product lines consist of end tables, coffee tables, and dining room tables. The production of each of these tables requires 8, 15, and 80 ...Consider Christine Phillip’s project involving planning and coordinating next spring’s sales management training program for her company as described in Prob. 22.2-1. After constructing the project network, she now is ...Post your question

0