Two construction companies are bidding against one another for the right to construct a new community center

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Two construction companies are bidding against one another for the right to construct a new community center building in Bloomington, Indiana. The first construction company, Fine Line Homes, believes that its competitor, Buffalo Valley Construction, will place a bid for this project according to the distribution shown in the file P09_36.xlsx. Furthermore, Fine Line Homes estimates that it will cost $160,000 for its own company to construct this building. Given its fine reputation and long-standing service within the local community, Fine Line Homes believes that it will likely be awarded the project in the event that it and Buffalo Valley Construction submit exactly the same bids. Find the bid that maximizes Fine Line’s expected profit. Is a decision tree really necessary? If so, what does it add to the analysis? If not, why not?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Practical Management Science

ISBN: 978-1305250901

5th edition

Authors: Wayne L. Winston, Christian Albright

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